Does giving away estate assets before death prevent Will disputes?

52 per cent of Australian adults, the equivalent of 9.9 million people, are yet to prepare their final Will and testament. The vast majority of these individuals; 34 per cent, say they just haven’t gotten around to it yet.

While this could seem like a relatively harmless decision, life is unpredictable and when someone dies partially or completely intestate, their estate will be allocated based on intestacy laws – not their personal wishes and preferences.

Even if you’ve already created a Will though, circumstances change, assets are bought and sold, and relationships evolve. Making sure your Will is as accurate as possible means keeping it up-to-date as your situation changes by revisiting and revising it over time.

When writing and updating their Will, it’s not uncommon for people to look for ways to avoid a Will dispute. The usual reasoning behind this is that they want relationships between beneficiaries to be kept intact when they die and for their testamentary wishes to be final. This often leads them down the route of seeing whether transferring ownership of assets before their passing could be a viable option.

Transferring ownership before death and notional estates

When there are strained relationships between the testator and those closest to them, they’re understandably inclined to exclude such people from mention in their Will. This can be risky though, as it often leaves the door wide open for an unwanted eligible person to dispute the estate – meaning they would receive an inheritance regardless.

With this concern in mind, it’s not uncommon for the Will maker to transfer the ownership of property or other estate assets prior to their death in a bid to stop unwanted people, usually family members, from having any chance of inheriting them. Such assets would technically no longer be part of the deceased’s estate, so traditionally no claim could be made against it.

These assets make up a ‘notional estate’, and the legal rules surrounding whether or not they are included as part of the estate and contested vary between states.

Contesting notional estates: New South Wales vs. Victoria

In 2005, New South Wales changed their position on notional estates, and under certain circumstances, they can now be declared as part of the deceased’s estate. This means that just like any other estate asset, the distribution of those that are transferred before death can be disputed, so long as the following is satisfied:

  1. The asset was gifted to a person within 12 months of the deceased dying;
  2. When the gift was given, the deceased had a moral obligation to provide adequate provision to the eligible person disputing the will (the applicant); and
  3. The moral obligation to the applicant was greater than any moral obligation to give the gift in the first place.

If like us you’re located in Victoria though, the same legislation doesn’t apply.

In accordance with Victorian succession laws, family provision claims against notional estates cannot be legally enforced. This means if the deceased gave certain estate assets to another person before their death, the decision will be upheld and cannot be contested.

Because of this, contesting a notional estate in Victoria usually isn’t possible, and those looking to do so will generally experience difficulty. If you believe you have a case with merit and want to discuss the specific ins and outs of your situation with a professional though, getting in touch with an estate lawyer can help bring some clarity to your circumstances.

Preventing Will disputes in Victoria

While in Victoria transferring ownership of estate assets can prevent unwanted people from inheriting those particular assets, and this cannot be disputed, there’s no guarantee that a claim against the remainder of your estate won’t be possible.

The best way to prevent your Will from being contested is by providing all eligible people with adequate provision for proper maintenance and support.

When creating your Will, if you’ve already carefully considered how to distribute assets in a way that ensures any eligible people receives a ‘fair’ inheritance, it is unlikely they’ll be in a position to contest your Will and win a greater portion of your estate.

Speak with an estate lawyer

For more information on Will contesting and assistance resolving Will disputes, give our team at Hentys Estate Lawyers a call. If it regards property in NSW, although we may not be able to represent you  – we certainly will be able to advise on someone who can.