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23 July 2015

Are your parent’s estates protected? Let’s talk GAU v GAV [2014] QCA 308

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Property adjustment proceedings – Husband’s mother’s Will altered

The recently upheld appeal of GAU v GAV [2014] QCA 308 shines the spotlight on an incapacitated testator’s Will being changed, despite the effect a change may have on property adjustment proceedings in a family law matter.

The Queensland Court of Appeal has upheld an appeal enabling a testator’s Will to be altered to allow the implementation of a testamentary discretionary trust. This was at a time when a likely beneficiary of the Will, her son, was a party to Family Court property proceedings.

This case involved the testator’s husband (the applicant) filing an application in the Supreme Court of Queensland. The testator and the applicant had been married for over five decades. The testator lacked capacity to change her Will. The respondent in this matter was the testator’s son’s separated wife. The applicant sought an order for the testator’s Will (which was made in 1998) to be altered to exclude the daughter-in-law from inheriting and to divest the testator’s son of any control over the share of the estate formerly to be paid to him.

At first instance, the respondent was successful.  The Court found the primary reason for the application was that there had been a change of circumstances since the testator made her Will, being that the testator’s son had separated from the respondent.

On appeal the testator’s husband was successful.

The outcome resulted in the implementation of a codicil, being a testamentary discretionary trust. The testator’s properties were valued between $4 – $5 million. This formed part of the testamentary discretionary trust. The trust excluded the testator’s son’s separated wife but included the testator’s son and his children. Under the Will, the properties were to pass absolutely to the testator’s son upon his mother’s death.

Will – family law context financial recourse & expectancy

If the family law matter was determined based on the husband’s mother’s Will (bearing in mind the mother had not died), what the husband was to inherit under his mother’s Will would constitute a financial resource.  It would not constitute part of the property pool available for distribution between the husband and the wife.  The court may have regard to the husband’s expectancy under the will for the purposes of assessing what constitutes a just and equitable division of matrimonial property.

Where to from here?

This case is of significance. We will all have to wait to see how the Family Court will consider this issue given the subsequent effect it may have on property adjustment proceedings involving the above issue.

It is important to obtain expert estate planning.

If you would like to discuss with us your family law dispute or obtain advice about your options in resolving your family law dispute, please make an appointment with one of our solicitors.

 

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