A man’s decision to leave most of his estate to his daughter from a former marriage but allowing his wife to remain in their house for her lifetime has been set aside by the Supreme Court on the basis that the deceased’s Will did not adequately provide for his wife’s maintenance.  Even though the Court concluded that there was no doubt the man had a very firm opinion as to how his estate should be distributed after his death, it held that the adequacy of the provision made for his wife was not determined by the strength of the feelings he held.  In making this decision the Court took the view that further provision was required, among other reasons, in order for the wife to continue with her interests in golf, membership of the Queen Adelaide Club and travel.

The Will

The man died in December 2018 leaving a net estate of around $1.4 million. This included his half share in the home he had owned with his wife as tenants in common and superannuation of around $500,000.00.

Through his Will, the man left his wife a right to reside in his share of the property, the ability to use their household furniture and effects during her lifetime and a legacy of $60,000.00. The wife was also given half of his superannuation as a pension through a Binding Death Benefit Nomination. After the wife’s death, any remaining superannuation was to be paid into the deceased’s estate.

The Will gave the man’s daughter (who was 12 years old when he and his wife commenced their relationship) a number of personal items, half of the deceased’s superannuation and a legacy of $400,000.00. Following the wife’s death, she would also receive the household furniture and effects and the balance of any remaining superannuation following the payment of four legacies. The deceased also forgave any debts owed to him by his daughter.

The residue of the estate was to be equally divided between the wife and the daughter. Both the wife and the daughter were appointed executors.

Joint Tenancy vs Tenants in Common

When more than one person owns a property together, it can be owned in one of two ways: as joint tenants or as tenants in common. When people own property as joint tenants and one of them dies, the deceased person’s share automatically goes to the surviving owner(s).  However, when people own property together as tenants in common, the deceased person’s share does not automatically pass to the other owner(s) and instead forms part of their estate, meaning they can determine what happens to it after their death. This is why the deceased was able to create a right to reside for the wife, rather than his share automatically transferring to her.

The Wife’s Right to Reside

A right to reside gives a person the ability to live in a property for a specified amount of time without giving them ownership of the property. There are often conditions that have to be met in order to keep the right to reside and it is usually the executor of the estate who decides whether these conditions have been met. In this case, the wife had to pay all rates, taxes and other outgoings connected with the property and keep the property in good repair and appropriately insured. As both the wife and the daughter were executors, the daughter could determine whether the conditions had been met. The wife also had the ability to sell the property and use the proceeds to purchase another residence, if required. Doing so however would have required the daughter’s permission as an executor of the estate.

The Wife

The deceased was a demanding man and during their marriage, the deceased generally controlled the finances of himself and the wife. The wife undertook the majority of the household tasks so that the deceased could work longer hours, allowing him to grow his wealth and superannuation. The wife and the deceased had also contributed equally to the purchase price of their first house. Each house purchased after that was funded by the sale of the previous house, meaning the wife had essentially contributed an equal amount to the purchase of the couple’s last home.

During their relationship, the deceased and the wife were members of a number of social, business and sporting clubs, enjoyed attending music and theatre performances and often travelled. At the trial, the wife was in reasonably good health for a person of her age.

The Daughter

During his lifetime, the deceased provided significant financial support to his daughter. The daughter referred to this as “borrowing money” from her dad however, both the daughter and the deceased knew she did not have the means to pay the money back. At the trial, the daughter was in poor health and was on a disability pension. It was unlikely she would ever return to fulltime work.

What is an Inheritance Claim?

Even when a Will is valid, the law allows certain family members to claim a share (or larger share) of the estate on the basis that the deceased hasn’t made proper provision for their maintenance, education and advancement in life.  This involves an assessment by the Court of various factors without reference to the subjective knowledge, beliefs or intentions of the person who made the Will, including things such as:

• Their age, condition and general situation;
• The person’s needs and the lifestyle to which they have become accustomed;
• Their capacity and resources to meet those needs, lifestyle and standard of living; and
• The relationship between that person and the deceased.

Decision

The Court first had to determine whether the wife had been left without adequate provision for her proper maintenance, education and advancement in life. The Judge decided that the wife had not been left with adequate provision. The Judge said that the right to reside did not give the wife certainty regarding her accommodation and meant she could not live independently from the daughter, who would be responsible for deciding whether the conditions of the right to reside had been met. The Court held that after 30 years of marriage the wife should be entitled to feel that her home is her own and that it was not appropriate to require her to go from being mistress of her own home to being dependant on the reasonable behaviour of the man’s daughter.

It was also held that the wife did not have sufficient income to continue to enjoy the lifestyle she had had during the deceased’s lifetime.

The Court then had to decide what provision would be appropriate for the wife, given the circumstances of the case. In doing this, the Judge considered the size of the estate, the wife’s unmet needs, and the needs of the daughter. The Judge could see that the deceased wanted to leave substantial provision for the daughter and said that “[t]his should be disturbed no more than necessary to give the [wife] adequate provision.”

The Court gave the wife the deceased’s share of their house as well as a legacy of $200,000.00. By doing so, the Court ensured the wife had security in her accommodation as well as the resources to maintain the lifestyle she had enjoyed during the deceased’s lifetime. Awarding this amount to the wife also meant that the daughter still had enough money to meet her needs.

What Does It Mean?

This case highlights that the Court will override the wishes of a deceased person if they haven’t left those who are entitled to provision with the resources to meet their future needs.  It also demonstrates that leaving a partner with a right to reside in a property, especially one they co-owned with the deceased, may not be considered “adequate provision”.  There is no way to exclude the possibility of a claim ever being made, however proper estate planning with the assistance of a lawyer can reduce the risk of such a claim and the resultant costs to the estate.

If you believe your loved one hasn’t left you enough to meet your future needs, contact Websters Lawyers today on 8231 1363 to arrange a no obligation, free 20 minute consultation with one of our probate and estate lawyers.

Bramwell v Bramwell & Ors [2022] SASC 12