Saving a home – How Northern Beaches Lawyers successfully defended a claim made against our client’s home.
Had this claim been successful, our client would have lost her home. With such high stakes, it was important she used a specialist wills and estate law firm.
The facts and names of people involved in this matter have been changed in order to protect their identity.
The Background
Desmond was an elderly man who has spent his life in rural New South Wales. His children lived in the city, and upon deciding to become more involved in his children’s lives, Desmond sold his house for $250,000 and relocated to the big smoke.
Lucy is Desmond’s eldest daughter. She recently went through a divorce, and lost her house in the process. Upon hearing her father’s decision to relocate, she borrowed a sum of $250,000 from a bank and with Desmond, they agreed to buy a home together, and jointly bought a house for them both to live in. Lucy paid all the mortgage repayments, rates and insurance.
They lived together for 12 years, with Lucy paying off the mortgage over the home. Upon Desmond’s death, his share of the house automatically transferred to Lucy’s name in accordance with the legal concept of ‘survivorship’. For more information on joint tenancy, see “Joint tenants vs Tenants in Common”.
The house was Desmond’s major asset and his actual estate was minimal. Desmond’s will divided his estate between his children equally, but there was very little money to divide. His other children felt left out and not provided for. They pursued a claim against the estate and sought an order for notional estate, attempting to claim his half share of the house as their inheritance. This would have left Lucy homeless.
What is ‘notional estate’?
Notional estate is a complex legal concept, created by the New South Wales Succession Act. In simple terms, it is the right for an eligible claimant to request the Court to make an order designating property which was no longer owned by the deceased at their death but previously owned by him, as available to be paid to a successful Family Provision Claimant. With some exceptions, any asset of value which was owned by the deceased and transferred out of their name less than 3 years prior to their death can be claimed as notional estate.
In Lucy’s case, this meant that Desmond’s half share of the property, which was automatically transferred to Lucy upon his death by operation of law, could be claimed as notional estate by her siblings. If they were successful in their claim, Lucy would either have to payout their share of the home from her own funds, re-financing, or more likely, have to sell the home in order to raise the funds to payout her father’s share of the home.
Both possibilities would leave Lucy worse off, leaving her no option but to defend her right to her home.
The Outcome
Northern Beaches Lawyers successfully defended the siblings’ claim for further provision and defeated a request for a notional estate order, securing our client’s home. In deciding the matter, the Judge observed that the siblings’ claim of ‘entitlement’ is incorrect, as adult children have no such entitlement. Rather, the law questions whether the provision made by the deceased was inadequate for their proper maintenance, education or advancement in life. It is a ‘needs-based’ jurisdiction, and this requires consideration of the applicant’s financial position and the size of the deceased estate. Ultimately, the Judge found a claim of notional estate should not be made in this case.
While the deceased did not provide for the siblings, the fact that they are all homeowners with an adequate income suggests that they do not have the need for the notional estate order. Desmond decided to jointly purchase the property, knowing that it would result in Lucy obtaining ownership after his death. Making an order for notional estate upon his share of the property would subvert Desmond’s testamentary wishes. In addition, as we had established the claimants had failed to prove inadequate provision, their claim failed on the principal claim.
How can this matter help you?
The case of Lucy and Desmond highlights the complexity of notional estate orders, joint ownership of a house and the prolonged litigation which can occur after the death of a loved one. As an added stress to what is already a trying time and period of mourning, you need someone who you can trust to manage your affairs and put your needs first. This is where Northern Beaches Lawyers can assist. With over 25 years of experience in probate, wills and estate disputes, we always put our clients’ needs first, and endeavour to obtain for them the best possible outcome.
Northern Beaches Lawyers Pare specialists in wills, estate and probate law, and contested estate cases. We understand how to navigate the Court process in order to achieve the best possible outcome for our clients.
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