Invalid binding nomination: trustees should pay spouse regardless

To be confident your superannuation benefits are paid on your demise as you intend them to be, care is required to avoid an invalid binding nomination.

An invalid binding nomination will result if its language, form or means of transmission does not accord with the terms of the particular superannuation fund deed.

The Supreme Court of Queensland recently had to determine the validity of a binding nomination that was challenged on one of those grounds.

Anthony Williams died on 28 December 2021. He was survived by his second wife Gayle who he had married in 2019, as well as his two adult sons Paul and Mark who was appointed as the executor of his estate.

Anthony had a self-managed super fund which he called the Boosey Doherty Superannuation Fund, of which he was a trustee.

The initial members of the fund had been Anthony and his first wife Margaret, but after Margaret died in 2014 their son Paul became a trustee in Margaret’s place and he remained as trustee of the fund at the time Anthony died.

Paul and Mark entered into a Deed – after Anthony’s demise – to attempt to add Mark as an additional trustee of the fund.

In dispute was this appointment, as well as the effectiveness of the binding death benefit nomination Anthony had prepared and duly signed in March 2018 in accordance with the requirements of the deed as to its form, directing his death benefit to be paid 50% to Gayle, and 50% to his estate.

Paul determined the nomination to be invalid however because the paperwork had not been given by Anthony to him as co-trustee of the super fund as required by the terms of the deed.

Paul also declined to provide super fund information to Gayle until ordered by the court and resolved that by reason of Anthony’s conduct in not copying his nomination to Paul, neither Anthony’s estate nor Gayle should be paid any benefit from the fund.

Not surprisingly Gayle sought relief from the court by way of an order declaring that the nomination to be valid and removing Paul and Mark as trustees.

The contest came before Justice Glenn Martin who concluded that the binding nomination was invalid because it had not been given to Paul as trustee after it had been made because the terms of the deed required nominations to be given to all trustees.

He did not accept Gayle’s argument that the nomination could be valid so long as Anthony as one of the trustees had acknowledged its receipt because the Deed specified that “notice to one of the trustees is not notice to all of them”.

Paul and Mark were less successful though on the issue of whether they should be removed as trustees.

Justice Martin first held that Mark had not been validly added as a trustee of the fund, finding that such appointment had – also contrary to the terms of the deed – purportedly occurred before he had been granted probate of the will.

He also concluded the “behaviour of Paul … is, at least, concerning” and his decision that Gayle, should be deprived of Anthony’s entire death benefit because of his non-compliance “was “not a decision that one might expect to be made by a trustee acting rationally”.

He ordered that Paul and Mark should be removed as trustees.

What remains to be determined is whether the independent trustees proposed by Gayle – who he agreed were suitably qualified and independent – could be appointed to a SMSF of which they were not members.

Williams v Williams & Anor [2023] QSC 90 Martin SJA, 5 May 2023

source https://qldestatelawyers.com.au/invalid-binding-nomination-trustees-should-pay-spouse-regardless/

Court approves dementia will asset distribution for wealthy octogenarian

Courts have the power in many cases to make wills on behalf of people who lack the legal capacity to do so for example by reason of dementia.

The Supreme Court of South Australia was recently asked by the Public Trustee of that State for orders approving and authorising the making of a will for Ross Snoswell, aged 88.

Ross was born in 1935 and lived his entire life at his parents’ home in Largs Bay, a suburb in the north-west of Adelaide on St Vincents Gulf, until he suffered a fall in 2018.

Ross had never married and had no children, but after the fall he could not return home alone and began living with his long-term partner Margaret Gallary, having known her since his 20’s when they met at the Wonderland Dance Hall in Adelaide.

Margaret also had no children but her nephew Wayne, niece Selena and Selena’s husband Scott provided support to she and Ross over the years.

After Ross’s father died in 1971, his mother Heloise transferred their Largs Bay home  into her and Ross’s name as joint tenants, in consideration of “love and affection” without any payment from Ross.

When Heloise died in 1988 Ross became sole owner of Largs Bay property, denying his only sibling Rhonda any beneficial interest in it.

Rhonda considered legal action to gain a share the property but decided against it, not wanting to force Ross from the family home.

Rhonda herself died in 2020 and was survived by her husband, Kingsley, and their children, Pamela Crouch and David Cammiss.

Unbeknown to all, Ross had significant assets in excess of $1M including at least one other residential investment property, in addition to Largs Bay.

Following his 2018 fall, Ross was diagnosed with vascular dementia and the Public Trustee of South Australia was appointed as his administrator. In 2021, Margaret and Selena were appointed limited guardians for healthcare and in home support services.

As Ross had no will, his beneficiaries under intestacy rules would either be Margaret – if she qualified as Ross’s spouse – or his niece Pamela and nephew David in equal shares if Margaret did not so qualify.

The Public Trustee considered that given the significant size of his estate and his multi-faceted family history, it should apply to the Court for authorisation to make Ross’s will.

They filed proceedings in which Ross was named as respondent and was represented by a solicitor Mark Jordan as his litigation guardian. Margaret, Pamela and David were also parties to the proceedings.

The Court cannot make a will for someone if they have the capacity to do so themselves. Her honour, Justice Anne Bampton, agreed with the position taken by all parties that Ross lacked capacity to make a Will and was unlikely to regain it.

The court thus had the requisite power to make Ross’s will, but her honour had to consider whether any proposed will accurately reflected his likely intentions if he were in the position of having the legal capacity that he lacked.

Ross had never made any wills, but his litigation guardian Jordan swore of several discussions when Ross had expressed his desires regarding his estate.

It was clear Ross wanted to gift the Largs Bay property to Margaret, and $30,000 to his neighbour Rod Hunter.

Ross had also indicated to Jordan that he did not want Pamela and David to get anything from his estate but that Selena, Scott and Wayne should receive a benefit in recognition of the support and assistance they had provided to he and Margaret.

Because of some inconsistences in the evidence and differing accounts as to his relationship with Pamela and David, her honour concluded his feelings towards them “may have softened or mellowed over time if he had not lost testamentary capacity and was not open to influence from others”.

The Public Trustee proposed a will in which Margaret was the executor, $30K was left to Rod, $50,000 to each of Pamela and Rod, the Largs Bay property for Margaret, and then 50% of the residue to Margaret, 25% to Wayne, and 25% to Selena and Scott.

The guardian Jordan proposed a Will in which the estate went 50% to Margaret, and the remaining 50% to Selena, Wayne, and charity. A third version – put up by Pamela and David – had Pamela and David receiving the Largs Bay property, and the residue distributed as per the will proposed by the Public Trustee.

Justice Bampton determined that Ross clearly wanted to benefit Margaret and Rod as well as Selena, Scott and Wayne who had provided support, he would likely have considered  gifts to Pamela and David “equal to approximately half the value of the Largs Bay property” if he had capacity, was aware he had “ample assets” and was uninfluenced by others.

Accordingly her honour authorised a will be made  appointing the Public Trustee as executor and giving Largs Bay to Margaret. Then after the $30,000 gift to neighbour Rod, the residue was to be divided by way of 50% to Margaret, $250,000 to each of Pamela and David, and then 50% of the balance to Selena and Scott and the other 50% to Wayne.

Other states including Queensland have similar legislative provisions for wills to be made by the court when a person is unable to do for so themselves.

In the Estate of Snoswell [2023] SASC 35 Bampton J, 10 March 2023

source https://qldestatelawyers.com.au/court-approves-dementia-will-asset-distribution-for-wealthy-octogenarian/

Court approves start of further provision claim delayed 21 years

In what circumstances can an estate can defeat the rules of survivorship that ordinarily transfer full ownership of joint property to the surviving joint owner in the event of the death of the other?

The Supreme Court of NSW was recently petitioned by a beneficiary of an estate to achieve exactly that result.

Sijia Guo brought a claim for provision out of the estate of her late mother Wei Hong who disappeared in April 2001 never to be seen again. Under intestacy rules her entire estate passed to her spouse, leaving nothing for her adult daughter.

She had been born in China in 1995 to Wei Hong and her former husband Jin Hua Guo. Her parents divorced in 1999, with Wei Hong moving to Australia to rekindle a former relationship with Yong Wei whom she eventually married in March 2000.

In October 2000, Yong signed up the $470,000 buy of a home at Carlingford in Sydney’s north-west in joint names with Wei Hong and paid a 10% deposit. Wei Hong did not sign the contract – she was overseas – but advanced the whole of the balance purchase price from funds she had transferred from China.

She disappeared just after settlement of the purchase, after being dropped by Yong at a Carlingford bus stop to get to Sydney airport to take a flight to see Sijia who had stayed in China with her grandparents since her mother’s departure to Australia.

It wasn’t until 2012 that the NSW State Coroner declared that Wei Hong Guo couldn’t be found dead or alive, and 2021 that the court declared that she was no longer alive thereby allowing Sijia’s provision claim to proceed.

Notwithstanding registration of the transmission of the property into Yong’s name had occurred long ago, Sijia sought an order that the deceased’s interest in the home be brought back into the estate for the purposes of that claim.

If Sijia was successful, the entire property and rent accrued would be brought back into Wei Hong’s estate. Otherwise, only half the Carlingford property and accrued rents would be regarded as part of the deceased’s notional estate. As the value of the Carlingford property was $1.7M and accrued rents were $330,000, the difference in outcomes was significant.

A resulting trust – Sijia contended – existed over her mother’s interest in the home despite the joint tenancy by reason of the couple’s intentions.

The trust arose – so her argument ran – because her mother had no intention to hold the property as joint tenants and had contributed all of the purchase price.

The evidence submitted by both parties took two forms: financial evidence predominantly from bank statements and property documents in support of the contributions made towards the purchase and by whom, and secondly correspondence, documents and recollections in relation to the intentions of the purchasers.

Justice Francois Kunc noted that such evidence was sparse due to the time that had elapsed, and that Wei Hong was no longer available to give evidence.

Despite the passage of time, gaps in memories and documentary evidence, his honour was able to conclude that $335,000 had been contributed by Wei Hong to the Carlingford property purchase but he was unable to ascertain who had provided the balance.

Yong Wei was not a reliable witness, in his honour’s view. He rejected Yong’s claims that the deceased had contributed nothing.

Sijia submitted letters from her mother to family members at the time that spoke of the purchase where she spoke of “my new home” that “I bought”, arguing that this showed that her mother’s intention was that the property was to be “hers”.

The same correspondence however also showed that Wei Hong spoke glowingly of her relationship with Yong, perhaps indicating the property was being purchased as a benefit to of their marriage, regardless of the contributions made by either of them.

Ultimately, his honour concluded Sijia had not proved, on the balance of probabilities, the purchase was other than as joint tenants. Thus no resulting trust had arisen, he ruled.

The court rejected Yong’s additional contention that Sijia’s further provision claim against what remained in the estate should be barred by reason of delay.

Sijia’s youth when her mother disappeared, her location in China as she grew up, the duration of the police investigation and coronial enquiry, all combined to provide a reasonable explanation for delay such that it would be unjust – in his view – not to allow the proceedings to be brought, regardless of the difficulties with evidence and memories that occurred.

This case highlights the importance of intention when considering whether a property recorded as held as joint tenants should in fact be regarded otherwise, and also the barriers to claiming otherwise especially when one of the joint owners has died.

Guo v Gao (No 2) [2023] NSWSC 231 Kunc J, 17 March 2023 Read case

source https://qldestatelawyers.com.au/court-approves-start-of-further-provision-claim-delayed-21-years/

Court refuses undue influence estate caveat removal

A caveat can be lodged in the court registry against the issue of a grant of probate or letters of administration. The applicant for the grant then needs to decide whether to apply for an estate caveat removal order or to go to a trial to have the deficiencies alleged by the caveator decided. Similar measures apply in all Australian states.

A Victorian court was recently asked to remove two caveats lodged in the context of allegations of testamentary incapacity and undue influence over the period during which a testator made two wills.

Clarice Robustelle died aged 91 in March 2021, having never been married and with no children.

Clarice had been actively involved in farming on her property near Wangaratta for many years. From 2004 she was assisted in those endeavours by Stephen Atkins and his son Bryden who were allowed to occupy another residence on Clarice’s property.

Other than some small pecuniary gifts, Clarice’s will in March 2018 left the bulk of her estate to Stephen, or his son Bryden if the former did not survive her.

Steven died in February 2020.

Bryden applied for a grant of letters of administration for Clarice’s 2018 will.  At the time of the application, the estate was valued at approximately $7.25m and at the time of hearing, at $8.6m.

Before a grant was issued, Clarice’s niece Jeanette Clarke filed a caveat against the grant on the basis that Clarice lacked the requisite testamentary capacity to make the 2018 will and that – alternatively – she made the will as a result of Stephen’s undue influence.

Jeanette sought to impugn that will and an earlier will made in August 2012, also on the ground of Stephen’s alleged undue influence.

In response, Bryden promptly applied to the Supreme Court for removal of the caveat on the basis that Jeanette – not being a beneficiary under either will – had no standing to make it.

Justice Kate McMillan observed though – when the matter came before her – that Jeanette would have standing if she sought to propound a will made in July 2008 under which she was the major beneficiary. She directed Bryden to also seek a grant of the 2012 will, in the alternative.

As expected, Jeanette caveated that will thereby allowing consideration of Bryden’s application for the removal to the caveats in the context of the validity of all wills.

That argument came before Justice Steven Moore who had to decide whether Jeanette had established a prima facie case sufficient enough to warrant full consideration and determination at a trial or whether the caveats should be summarily removed.

He noted Jeanette’s contention that Clarice’s cognitive abilities had been in long-term decline since 2012 when she reported difficulties remembering names, culminating in a VCAT declaration in 2017 (later revoked in 2018) that she was unable to make judgements about herself or her assets.

He also pondered allegations of Stephen’s coercive conduct – starting in 2006 and continuing until his death in 2020 – and whether they might establish Clarice was subject to his control when the 2018 and 2012 wills were made.

Bryden contested the allegations and asserted that they failed to prove actual coercion as opposed to a mere opportunity for coercion.

The court observed though that Jeanette – to successfully resist the removal of the caveats – did not have to prove the alleged coercive behaviour but rather, only had to establish a prima facie case.

His honour also concluded that evidence of mental disorder 9 months before the 2018 will was sufficient to warrant a trial in relation to that will’s validity.

He refused to order removal of the caveats and the dispute will go to trial where a judge will decide whether or not to accept each of Jeanette’s allegations.

Re Robustelle (No 2) [2023] VSC 72 Mooe J, 24 February 2023

 

source https://qldestatelawyers.com.au/court-refuses-undue-influence-estate-caveat-removal/

One month apart ends de facto spouse intestacy status

Does a temporary separation by a unmarried couple end their de facto spouse intestacy status in relation to either one of their deceased estates?

Liam Dillon died in September 2020 aged 29 years with no will, survived by his mother Virginia Maiden and by Jane Grimley, his de facto partner.

Virginia made an application for letters of administration in intestacy shortly after his death, claiming Liam’s long term de facto relationship with Jane had ended in August 2020, only one month before his death.

Jane responded with a caveat against that grant in the Supreme Court in Rockhampton and sought her own grant on the basis that she was Liam’s surviving spouse.

The matter for determination by Justice Graeme Crow was whether Jane was Liam’s de facto spouse at the time of his death which in turn depended on a finding as to whether they were living together on a genuine domestic basis for a period of at least 2 years ending on Liam’s death.

The couple had been living together in rented premises in Rockhampton since 2011. Jane’s evidence was that one of Liam’s several emotional issues was that he was “possessive” and that “later in the relationship” their frequent fighting made things “not good” .

She decided she needed to leave the relationship temporarily.

There was no dispute that their relationship was that of genuine de facto spouses. In contention was whether that relationship had ended before Liam’s death.

Jane swore she told Liam in late August that she needed some time apart but it was not her intention to separate indefinitely.

All of this was accepted by the Court but it was Jane’s further assertions that they continued to reside together and shared the same bed that were not.

Liam had lost his employment as a bulldozer operator at BMA Blackwater just a week earlier but concealed this from Jane who only learnt of it from her father who also worked there.

Numerous text messages that followed the fallout from those events between Jane, Virginia and Liam’s sister, Shannon recorded that Liam wasn’t dealing well with their relationship having ended. Among other things, Jane has messaged that she had put a lock on her bedroom door.

Various text messages between the pair themselves made it clear that although they still resided together, they occupied separate bedrooms and were living separate and apart. Against Liam’s protests, Jane reiterated the relationship had ended and told him he must accept it and move on.

What’s more, in her police statement after Liam’s death, Jane is recorded as saying “Approximately six weeks ago, Liam and I separated.”

It transpired that Jane had emailed a notice of tenancy termination to their landlord in early September and neighbours observed she appeared to have vacated the property many weeks before her partner’s death.

Justice Crow conceded that physical separation or a short term break up does not of itself end a de facto relationship but had no hesitation in concluding  a permanent breakup had occurred in that the pair no longer had a commitment to a shared life.

Both parties had, the judge reasoned, “publicly acknowledged to their friends that the relationship had ceased”.

He observed that de facto relationships are by nature “fragile” and “much more easily ended” than marriage which requires formal dissolution by divorce, regardless of a relationship having long-ago ended.

Although the continuation or termination of a de facto relationship is something “that is harder to pin down”, courts will need to adjudicate such issues well into the future.

Estate Liam Rowan Dillon [2023] QSC 27 Crow J, 22 February 2023

source https://qldestatelawyers.com.au/one-month-apart-ends-de-facto-spouse-intestacy-status/

Denial of court authority warrants administrator’s removal

Even minor beneficiaries are entitled to apply to the court for an administrator’s removal to ensure the prompt and impartial administration of a deceased estate when this does not occur.

Stan Tream died in November 2018, having made his last will in February 2015 dividing his estate into shares.

He left 30% to meet the estate expenses including a funeral in Poland, 40% for his de facto spouse Blossom, 15% to Blossom’s daughter Helen and the remaining 15% to be shared among 5 others.

Stan’s home at Edmonson Park in Sydney’s south-west was eventually sold in May 2021 for $1.25m but his other residence in leafy Killara on the North Shore that Blossom had occupied since August 2019 – valued at $3.25m – remained unsold.

The two executors appointed in the will – Diana Kuitkowski and Mick Wywrota – who were also gifted a 3% share of the estate between them, renounced their roles and allowing Blossom to obtain a Grant of Letters of Administration in August 2020.

Tomasz Kuitkowski – entitled to a 2% share – applied to the NSW Supreme Court in February 2022 with the support of two other beneficiaries to have an independent administrator appointed in Blossom’s place.

Tomasz’ was concerned about the delay in finalising the relatively simple estate and that Blossom appeared to have decided to stay put in the Killara home where she was living rent-free.

He also demanded Blossom reimburse the estate for rent of that home totalling more than $189,000.

Despite the estate receiving the sale proceeds from the Edmonson Park property, Blossom had by the date of the application only made interim distributions to three of the beneficiaries (including Tomasz) of just under $50,000 each.

Justice Steven Robb accepted the contention that Blossom had no intention of leaving Killara and was endeavouring to appropriate it to herself as her share of the estate.

He also found in favour of Tomasz’ assertions that she had – without in any co-beneficiary consent – used estate funds to pay her own Telstra bills and for unrelated services provided by her daughter and her friends.

Blossom – who was self-represented at the final hearing – failed to argue any grounds on which she ought to be permitted to remain in her role. Rather her contention was that the court had no jurisdiction to order her removal.

Justice Robb thought otherwise.

The 2.5 year delay in the stated ministration was untenable in his view; as was her failure to make appropriate distributions promptly following the sale of the first property.

His Honour went on to say that Blossom’s continued occupation of the Killara property created a conflict with the other beneficiaries and was not consistent with her fiduciary obligations to the estate.

“The Court can not safely allow her administration to continue,” he observed.

He also noted that Blossom’s denial of the Court’s undoubted jurisdiction to consider her removal was of its own, enough to warrant her removal.

Notwithstanding her manifest confusion and that she was “acting upon the basis of fantasy and irrationality”, her denial of the authority of the court from whom she had received the grant meant she “was no longer a fit and proper person to administer the estate”.

An independent administrator was ordered to be appointed so that the estate administration could be promptly completed.

The judge ordered that Tomasz’ considerable legal costs –  there had been 13 separate directions hearings –  be paid from the estate but reserved the right for him to seek to have Blossom made personally responsible for such costs at a later date.

Removal of an executor or estate administrator is likewise allowed for in Queensland pursuant to section 6 of the Succession Act 1981 (Qld).

Kuitkowski v Tream [2023] NSWSC 145 Robb J, 27 February 2023 Read case

source https://qldestatelawyers.com.au/denial-of-court-authority-warrants-administrators-removal/

Executor Of Estate QLD

 Causing a will to is the most ideal way of guaranteeing that after your demise your assets are passed on to individuals you need to get them. In Britain and Ribs, a departed benefactor - the legitimate term for the individual making the will - is normally exhorted by an attorney while making their will. The legal counselor is obliged to think about a couple of elements while making wills.

o The Executor Of Estate QLD should be certain that the departed benefactor knows and comprehends that they are making a will, and furthermore comprehends what the particulars of the actual will are.

o The departed benefactor should likewise comprehend what assets and resources they are leaving in their will, and the worth or the resources for individuals who are profiting from the will.

o The deceased benefactor should at last know who individuals are who will acquire in their will, and the legal advisor should ensure that they are not being affected to incorporate or reject individuals from their will.

Assuming it is felt that a deceased benefactor needed intellectual ability to make a will, it very well may be tested in court. Intellectual ability implies that the departed benefactor completely figures out the method involved with making a will and the items in their will. In the event that the will contains terms which might lead a court to think there was an absence of limit, or on the other hand assuming the deceased benefactor was experiencing dementia, Alzheimer's sickness or other mental weaknesses, the test likely could find lasting success. Difficulties can likewise emerge when there are bunches of corrections made to wills containing loads of contrasts between every rendition, particularly when the latest duplicate was made not long before the departed benefactor's passing.
In the event that there are any questions whatsoever about a departed benefactor's intellectual ability, a decent legal counselor will follow three "Brilliant Guidelines" while drawing up their will.

1. They will request that a clinical expert be available and witness the marking of the will.

2. They will examine with the deceased benefactor their explanations behind changing a will and the ramifications of those changes, determined to figure out whether they have the intellectual ability to make any modifications.

3. They will ensure any individuals who are maybe impacting the deceased benefactor are not there when the will is marked, and furthermore bar anybody who is named in the will as a recipient.

In the event that these Brilliant Standards are observed when a will is ready, the opportunities to effectively challenge the will in a test through the courts sometime in the not too distant future are tired of diminished. In spite of the best endeavors of attorneys to guarantee wills are drawn up appropriately and lawfully, this doesn't stop disheartened relatives or others who felt they ought to have acquired going to court to attempt to get what they believe they are owed.

One final expression of caution. On the off chance that you're considering challenging a will, don't hurry into it. While the possibility of getting what you believe you merit, and acquiring a money singular amount or another sort of property is consistently alluring, challenging a will can make unsalvageable harm your relationship with loved ones. Furthermore, that is presumably the last thing that the adored one you just lost would have needed.