Szabo & Associates Solicitors' Supreme Court victory
Our recent Supreme Court victory has highlighted the complexities that can be involved in estate planning activities, and how taking professional legal advice can be invaluable whenever you are writing, amending or contesting a Will.
The case in question saw our legal team represent a client in the New South Wales Supreme Court in a rare and difficult to contest case.
Our client was a woman from the USA, who was making a claim for a Family Provision order against the estate of her deceased ex-husband, who was Australian.
Ex-spouse cases of this nature occur only rarely, and successful outcomes are rarer still, with the majority not proceeding beyond the mediation stage. However, although the facts of our client's case were complex and it initially appeared to be time-barred, Szabo & Associates Solicitors successfully argued her claim in the Supreme Court and won her the financial settlement she was entitled to.
Our client was married to the deceased between 1988 and 1995. After their divorce, the deceased remarried and had two children with his new wife. His widow was the defendant in the case.
Our client received no divorce settlement from the deceased, and the couple maintained an amicable relationship, even after his remarriage. The deceased stated his intention on a number of occasions to provide financially for his ex-wife, and reiterated this intention when he found out he had terminal cancer.
However, these promises never materialised, and when he passed away in 2011 his Will, which was written 2009, made no form of financial provision for his ex-wife.
His estate was significant, and included the matrimonial home where his wife and children lived, which was worth approximately $3 million, and trust assets in his business worth around $7.525 million. In total, his estate was estimated to be worth around $11 million.
Under the terms of the Will, his widow received liquid assets worth close to $2 million, and $1 million trust funds were set up for each of the children.
The matrimonial home also passed to his widow, but not directly through his Will. The deceased had set up a complex system of testamentary trusts in order to pass on his assets, and as a result his widow had to make a Family Provision order of her own in order to have the title of the home transferred to her name.
The Supreme Court judge commented that this complicated structure wasn't an indication that the deceased did not want to provide adequately for his family, but described it as a "function of his pre-disposition to control property, to tie it up in trusts".
The Succession Act 2006 imposes a time limit of 12 months from the date the deceased died within which an application for a Family Provision order must be made. This limit can only be extended if the applicant is able to show sufficient cause for doing so.
In this case, our client was five months late in making her application. This was because she had only became aware of her entitlement to apply for a Family Provision order when the defendant (the deceased's widow) made her own application for Family Provision relief, and this was filed shortly before the 12 month time limit expired.
Under the Succession Act, when a Family Provision order is applied for, all other potential claimants to the Will need to be notified, and it was this notification that alerted our client to her own right to make a claim.
The judge accepted the justifications put forward by our legal team and ordered an extension of the time limits.
Justifying the claim
Having obtained the necessary time-limit extension, our legal team were then able to present a strong case in favour of our client's application, which included a number of key considerations:
In defending the claim, the deceased's widow had claimed that her husband and his ex-wife had both "moved on" with their lives following their divorce. However, the court agreed that while this appeared to be true for the deceased, the evidence was less convincing with regard to our client, who had hoped for a long time that she might reconcile with her former husband.
Our client had received no form of financial settlement when she and the deceased divorced. The judge commented that had she received such a settlement, it would probably have been "fatal to the prospects" of her claim.
Our client was being very reasonable in the amount of relief she was seeking, and this was recognised by the court. She expressly stated she was not making any claim to the children's trust funds or the matrimonial home, and was only seeking a legacy of $230,000, plus costs.
In addition, the court acknowledged that our client's personal circumstances meant she was in genuine need of assistance.
Taking these and other considerations into account, the court accepted that an application for a Family Provision order was justified.
It therefore ordered that our client receive a legacy amounting to $200,000 plus legal costs, which is to be paid out of the notional estate of the deceased.
This legacy will make a real difference to the life of our client, who will be able to use it to meet certain ambitions, including moving to a new home in a more desirable area, taking up education opportunities and supplementing her retirement provisions.
Commenting on the decision in the case, George Szabo said:
"This case illustrates the importance of having an experienced team with decades of experience between them in the area of Contested Will litigation, so that you are properly informed at the start of the case as to your prospects of success, and so that the case is prepared properly from the very start. There was a huge amount of preparation required for this case, even more than that required for most Contested Will matters. Our legal team knows when to recommend that an offer from the other side be accepted, whether it be at mediation or after mediation made as an 'offer of compromise'. We also know when to recommend to our clients to 'fight on'.
"Another important lesson from this case is the judge's comments about the complexity of the deceased's Will. Whilst the use of Testamentary Trusts in Wills is an appropriate estate planning tool, they must be used in appropriate circumstances and for the appropriate assets. Had the deceased not left his family home in such a trust to his wife, his widow would never have contested the Will herself to have the home put directly into her ownership. There would then never have been an opportunity for our client to make a provision claim. This case is yet another demonstration that the preparation of Wills is an important and complex area which must be done by experienced professionals to suit each individuals circumstances. At Szabo & Associates, when we prepare a Will and estate plan for our clients, we do so with the 'end result' in mind."
If you are thinking of contesting, making or updating a Will then it is important to seek expert legal advice as quickly as possible. Contact Szabo & Associates Solicitors today and speak with one of our specialist solicitors. Call us on (02) 9281-5088 or fill in the contact form to the right of this page.