A Cautionary Tale

A must read for every parent...

This is a cautionary tale for all parents, well anyone for that matter, about the importance of having a properly drafted will. This is based on a real matter that I previously had carriage of. The circumstances and events are all true, however names, places, and amounts have been changed.

The deceased was a fifty-four-year-old woman who died in September 2017. She was previously divorced from her first husband to whom she had three children. At the time of her death, the deceased was living with her de facto partner, to whom she had been in a relationship for nine years.In 2011, the deceased wrote a handwritten will in a notepad, and in that will she made the following gifts:

1. I give my Wagga Wagga property to my three children;
2. I give my superannuation entitlements to my three children; and
3. I give my share in the Narrandera property to my de facto spouse.

Initially, it was believed that the deceased died without a will, until her sister, the executor, found this handwritten will amongst her personal things. A lot had changed in the deceased’s life since she wrote her will. She had sold her Wagga Wagga property (the property she gifted to her children) and had bought another house in Albury with her de facto spouse.

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‍What happened to all her property when the deceased passed away?

‍The gift to the children failed because the deceased no longer owned the Wagga Wagga property. In legal terms, the gift had adeemed. In relation to the superannuation, which was also gifted to the children, the Deceased failed to leave a binding nomination to her estate so her children would receive her superannuation. The trustee of the superannuation fund then made a decision about who received the deceased’s super. They decided that the deceased’s de facto spouse would be entitled as this was the most tax effective method for superannuation. What that means is that super paid to a de facto spouse is tax free, however super paid to adult non-dependent children is taxed at 30%. What does this all mean? The children were left with nothing.

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‍What happened next?

‍The children had no choice but to file a claim for family provision, or as you probably know it, contest the will. The case settled, but to put things in perspective for you, the difference to what the children actually received and what they should have received had the will been drafted properly was a difference of about $600,000.00.

Based on this case, I don’t think I need to spell out why it is important to have a properly drafted will. Handwritten wills and will kits often leave out critical information that a person needs to consider when making a will. I have often thought about what the deceased would have said about her children’s inheritance were she alive today. Would she have been happy with the outcome? My guess is probably not.

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Photo by Benjamin Manley on Unsplash