One would think that 116 years after federation Australia would have the same laws governing Wills and Estates across the country, but think again.
Instead, our country is filled with a plethora of conflicting laws governing Wills, family provision and intestacy, and is precisely why Hentys Lawyers deals solely with Victorian Estates, so to give you the best, most specified advice.
The rules in relation to Will contests when property was transferred before death is no exception to the conflicting laws.
Testators Family Maintenance List Claims
The one commonality across the country is that the laws in each state and territory of Australia allows “eligible people” (as defined by various State acts) to make a claim asking for further provision from the Estate, if they have feel they have not adequately been provided for by the deceased. In Victoria, these types of Estate disputes are known as ‘Testators Family Maintenance List’ claims (TFM), Part IVs, Family Provision claims, or simply just ‘contesting a Will’.
Historically, in all Australian states and territories a TFM claim could only relate to property that was owned by the deceased at their date of death. As result, trust assets, those owned by a spouse, or property transferred before the deceased’s death (all known as ‘non-estate assets’) were outside the reach of a TFM claim.
New South Wales Position – ‘Notional Estates’
It is not uncommon for a person to give away their property before they die in an attempt to stop a particular unwanted person, usually a member of their family, from being able to launch a TFM and go after the property in question. The motivation is that if the property does not form part of the Estate at their death of death, then traditionally no claim may be made upon it.
In 2005, New South Wales decided to depart from the traditional position and introduce the concept of a ‘notional estate’. This concept essentially turned the traditional law on its head, and now allows the court to treat certain property that once would not legally have been considered part of the deceased’s Estate, to suddenly be included.
In general terms, the concept of a notional estate allows: any real property transferred by ‘a positive act or omission’ to anyone other than the deceased before the deceased’s death, under certain circumstances, to be deemed as part of the deceased’s Estate and thus be open to the attack by a TFM.
The time of prescribed transaction is very important for property to be declared as part of the notional estate.
Section 80 of the Succession Act 2006 (NSW) permits the court to designate property as notional Estate where the deceased has entered into a “relevant property transaction” in three years prior to his or her death. Post three years before the deceased died and it is virtually impossible to have property be declared as part of the deceased’s notional estate.
Between one and three years before death, it must be proved that the property was the subject of a “prescribed transaction, entered into by the deceased, specifically for the purpose of avoiding a TFM claim”.
If the property was “gifted” to another within 12 months of the deceased dying, then it must be proved that:
- At the time the gift was given, the deceased had a moral obligation to make adequate provision to the eligible person who is disputing the will (the applicant); and
- The moral obligation to the applicant was greater than any moral obligation to give the gift in the first place.
If both these elements can be proven, then the court can consider the property in question as part of the notional Estate.
Victoria, along with the rest of Australian states and territories do not have the concept of a notional Estate as part of their succession laws. In fact, in 2013 prior to the official amendment of the Administration and Probate Act 1958 (Vic), the Victorian Law Reform Commission released its final report on Victoria’s succession laws and recommended that the New South Wales notional provisions should not be adopted in Victoria.
That being said, just because the concept of a notional Estate is unique to the NSW legal system, it does not mean that it applies only to those who reside in the state. In fact, any property that is held within the State can be declared a notional Estate, even if the deceased passed away elsewhere in the country – as those Estate laws apply.
For more information on Will contesting and assistance in resolving Will disputes, do not hesitate to give Hentys Estate Lawyers a call. If it is regarding property in NSW, although we may not be able to represent you – we certainly will be able to advise on someone who can.