Lesley McDonnellWith an ageing population and mental illness on the rise, a recent Supreme Court case provides a unique insight into how one family resolved the dilemma of administering an incapable family member’s estate to accommodate his needs and the wider needs of his family as a means of avoiding future litigation after the man passed away. The case was unique insofar as it resulted in a 94 year old family patriarch’s estate being distributed before his death and was facilitated by family agreement with the approval of the court.

The case involved a 94 year old patriarch of a family, whose estate was subject to a financial management order (because the man had previously been declared incapable of managing his own affairs) with an estimated worth in excess of $15 million. The man’s family consisted of his de facto partner of over 30 years, a step-daughter and three adult sons by a previous relationship. One of the adult son’s was the appointed financial manager of his father’s estate pursuant to the NSW Trustee and Guardian Act.  Prior to his admission to hospital in 2014, the man had lived in his own home with his de facto partner and step-daughter. Following his admission to hospital in 2014, it was clear that the man would not be fit to return home and would need to take up residence in an aged care facility.

The man was asset rich and cash poor. He owned his own home in which his partner and step daughter lived, and an investment property but a decision needed to be made as to what assets would be sold to come up with the funds necessary to meet the man’s ongoing needs. This inevitably led to family tensions. The issues to be resolved were fourfold:

(a) whether one or both of the man’s properties should be sold;

(b) the nature and extent of provision to be made, for the man’s de facto partner and step daughter, out of his estate;

(c) whether the Court could, and should, authorise the making of a statutory Will for the man; and

(d) if so, the terms of any such Will.

With the approval of the court, the man’s home was sold and out of that sale funds were paid to the de facto partner and step daughter to enable them to buy another home, the creation of a court made Will which amongst other things, made provision for the man’s three sons, and the man’s son was confirmed as his financial manager for the remainder of the man’s life.

Although each case turns on its own facts, this case demonstrates how in appropriate circumstances, a court can be empowered to facilitate the administration of estates, before and after death provided that stringent safeguards are adopted so as to ensure primacy is “given to the welfare, interests and benefit of the person in need of protection”.

Whilst this case was in many ways unique it does serve to highlight the need for people to plan ahead in case disaster strikes. At Everingham Solomons, we have the experience and expertise to assist you with all your Estate planning needs because Helping You is Our Business.

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