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Provided more for one child during your lifetime compared to your other child…how to treat them equally in your will?

Background

Maria Ameisen, known as “Maya”, died in 2018, aged 97 years, leaving a will dated 2015 in which she broadly left:

  1. to her daughter Helena the two properties in Bondi Junction and one property in Bondi (with a total current net realisable value of $3.851 million), together with 50% of her cash assets;
  2. to her son Paul one property at Bondi (with a current net realisable value of $1.259 million), together with a sum of $14,000 and an annuity of $66,000 payable in monthly instalments of $5,500 subject to annual Consumer Price Index adjustments, from a fund which is expected to be exhausted in or about October 2023; and
  3. to Paul’s minor son (aged 8), a fund of $50,000 for a legacy payable to him, with accrued interest, when he attains 25 years of age.

Paul argued that his mother Maya and his father, who had died in 2006, consistently exhibited a predisposition towards treating their children equally and that Helena received more under their mother’s will compared to him.  Never mind the fact that:

  • Paul had resided at one of the properties at Bondi free of rent and outgoings for over 10 years until the death of his father after which he began to make nominal payments which did not fully cover the outgoings for the property;
  • Paul’s parents provided money to him towards the purchase of his properties at Wallis Parade, North Bondi and a farm in the Mudgee district;
  • Paul’s parents substantially assisted him financially throughout his adult life towards a number of court cases, legal issues and settlements, notwithstanding he practised as a general medical practitioner from the early 1970s until his suspension and deregistration in January 2009, and then again from 2015 until his suspension and deregistration for a second time in 2019 – during those periods he would have been in receipt of a reasonable income; and
  • Paul’s parents have not provided any financial assistance to Helena.

Decision before Lindsay J

Lindsay J concluded:

  • Maya wanted to treat her children “equally”.
  • It cannot be overlooked that, throughout Paul’s parents’ lives, Paul drew down on his presumptive inheritance whereas Helena did not.
  • He was not satisfied that Paul has been left without adequate provision for his proper maintenance, education or advancement in life out of his mother’s estate, notwithstanding the fact that he is a poor manager of his own affairs or a spendthrift of sorts.

The application was dismissed.

Takeaway message

To avoid potential conflicts between your adult children on your death, we recommend that if you are considering giving, or have provided, financial assistance to one of your children during your lifetime but ultimately want to treat your children equally on your death, it is important to keep adequate records and consider having a ‘hotchpot clause’ in your will.  A hotchpot clause provides that when making a distribution of a beneficiary’s entitlement under your will, all advances (which can include gifts) made to that beneficiary during your lifetime are taken into account.

 Adelaide Ryan, Associate

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