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Notional Estates in Family Provision claims – challenges to Wills

If you are involved in a Family Provision claim, or a challenge to a Will then you need to understand the importance of Notional Estates and the effect a Notional Estate Order can have on the value of the deceased estate.

In New South Wales Family Provision claims are legislated under the Succession Act 2006 (“the Act”). Under the Act, the Notional Estate of the deceased is defined as “property designated by a notional estate order, as notional estate of the deceased person”.

But what does this mean in plain English?

It means that the Court can look beyond the property and assets that were held in the name of the deceased at the time of their death to any relevant property transactions distributing their assets or property that occurred before their death. A relevant property transaction will occur when the deceased has done an act, or failed to do an act that has resulted in their property being held by another person, or subject to a trust and the full valuable consideration for the transaction was not given to the deceased.

In essence, any distribution of assets or property of the deceased, where they did not receive the full value of the property, may be subject to a Notional Estate Order by the Court. This can include property that was held as joint tenants, gifts made to charities and beneficiaries under life insurance policies or superannuation policies.

However, the Court cannot make a Notional Estate Order, unless the relevant property transactions have the following characteristics:

  1. The relevant property transaction occurred within three years prior to the death of the deceased, and was entered into with the intention of denying or limiting provision, being made out of the estate for the maintenance, education and advancement in life, of any person who is entitled to apply for a family provision order; or
  2. The relevant property transaction occurred one year before the death, of the deceased and was entered into, when the deceased had a moral obligation to make adequate provision for the proper maintenance, education or advancement in life, of any person entitled to make a family provision claim and this moral obligation, was greater than any moral obligation owed to the person to whom the property was transferred.
  3. On or after the deceased’s death.

If there has been a relevant property transaction the Court can than make a Notional Estate Order in the following circumstances only:

  1. The property transaction directly, or indirectly disadvantaged, the deceased’s estate, or a person entitled to apply for a family provision order; or
  2. If the property transaction had not occurred, there would have been a benefit to the deceased’s estate, or any person entitled to make a family provision claim on the deceased’s estate.

A Notional Estate Order can make a significant impact on the value of the deceased’s estate and therefore the amount that can be distributed to people making a family provision claim. If you have an entitlement to make a family provision claim then you need to speak to our expert family provision lawyers about whether there is a possibility to apply for a Notional Estate Order.

At Gerard Malouf & Partners we are not a giant publicly listed law company, but a highly
specialised and focused firm. We are small enough to care intimately for our clients, but
large enough to have the solid financial and expert resources our client’s need to fight and
WIN their cases.

For free over-the-phone advice, or to take advantage of our free face-to-face consultation, call our expert lawyers today at Gerard Malouf & Partners on our Free Call Number 1800 004 878.

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