Will your wishes be upheld?The recent Queensland Supreme Court case of Underwood v Underwood [2008] QSC QSC Quality Service Communications (Cologne, Germany) QSC Quilter Sound Company (QSC Audio Products Inc.) QSC Queens Surface Corporation QSC Low-Traffic Ship (radiotelegraphy) 159 was decided in July this year. The Facts Peter Charles Underwood Charles Underwood (1791 – 5 March 1883, Clifton, Bristol) was a builder in Cheltenham who moved to Bristol where he became a neo-classical architect. He designed the Greek revival buildings of Arnos Vale Cemetery (1836) and the Royal West of England Academy (1857). died in May 2006 aged 64. His estate had approximately $1,300,000 in business assets and around $1,000,000 of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. . He left $213,000 on trust for his daughter Peta, who was 29, had special needs resulting from a drug addiction drug addiction or chemical dependency Physical and/or psychological dependency on a psychoactive (mind-altering) substance (e.g., alcohol, narcotics, nicotine), defined as continued use despite knowing that the substance causes harm. and lived with her mother. He left his sons Derek and Scott $250,000 each, which included a small share of the business. Neither Derek nor Scott had any particular needs. They were both employed and had a reasonable amount of assets. Neither were involved in Peter's business. He left his de facto [Latin, In fact.] In fact, in deed, actually. This phrase is used to characterize an officer, a government, a past action, or a state of affairs that must be accepted for all practical purposes, but is illegal or illegitimate. partner Annette shares valued at $76,000 and paintings. She also received $200,000 from a Workcover payment resulting from his death. Peter was divorced from his first wife and was estranged es·trange tr.v. es·tranged, es·trang·ing, es·trang·es 1. To make hostile, unsympathetic, or indifferent; alienate. 2. To remove from an accustomed place or set of associations. from the children after the divorce. Peter's Will left his interest in the business to his nephews Louis and Glen who both worked in the business. Peter shared a very close relationship with his nephews. Peter also left a Statement of Wishes explaining why he had left his assets in this way. Each of the children and Annette challenged the Will and argued they should receive a greater share of the estate. Decision The Court decided: neither Derek nor Scott were entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: to a further share of the estate; Annette should receive an additional $30,000; and Peta should receive the same as her brothers, plus a further $25,000 to cover immediate financial needs. Some important factors the Court considered were that: the children's mother received a significant amount in the divorce and would probably leave her estate to them in her Will; while Annette had only lived with Peter for 3 years, she cared for him during his illness, which disadvantaged her financially and preserved the value of the estate; Annette had received the Workcover payment. Points to Note The Court did not interfere with Peter's wish that Peta's share should be held on trust – which is important for clients who have children with particular needs. Even an estranged child may have an entitlement An individual's right to receive a value or benefit provided by law. Commonly recognized entitlements are benefits, such as those provided by Social Security or Workers' Compensation. under a deceased deceased 1) adj. dead. 2) n. the person who has died, as used in the handling of his/her estate, probate of will and other proceedings after death, or in reference to the victim of a homicide (as: "The deceased had been shot three times. parent's Will, but it can be difficult for an estranged adult child to claim a significant part of a large estate. Although Louis and Glen still received most of the business assets, the judgment was handed down more than two years after Peter's death. During this time, they would have been unsure about their entitlement and this would have placed considerable strain on the business. If Peter, Louis and Glen had implemented a business succession agreement they could have protected the business assets from exposure to claims against Peter's estate. It is important to make your Will in consultation with professional advisors. In this case, the Court noted that Peter had considerable discussions with his solicitor and accountant when preparing his Will and explained his intentions in a Statement of Wishes. This was a factor in the Court's decision to substantially uphold up·hold tr.v. up·held , up·hold·ing, up·holds 1. To hold aloft; raise: upheld the banner proudly. 2. To prevent from falling or sinking; support. 3. Peter's wishes to leave his interest in the business to his nephews. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Mr Greg Cahill Cooper Grace Ward Central Plaza Two Level 23, 66 Eagle Street Brisbane 4000 AUSTRALIA Tel: 73231 2444 Fax: 73231 3221 E-mail: james.rimmer@cgw.com.au URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : www.cgw.com.au Click Here for related articles (c) Mondaq Ltd, 2008 - Tel. +44 (0)20 8544 8300 - http://www.mondaq.com |
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