Hypothetical by Manny Wood Published in the Coffs Coast Advocate on 29 February 2020.
Robert suffers from a mental illness. Robert has difficulty committing to full-time employment and is often unemployed for several months at a time.
Robert makes a claim for permanent disability under his superannuation policy on the basis that he suffers from a “bipolar affective disorder with predominant depressive symptoms”. He receives $250,000 as a result of his claim.
Robert’s mother, Joan watches Robert spend the money and is concerned that when she passes away, Robert will squander his inheritance. Joan is also concerned that Robert will not provide proper support for his children.
Joan passes away leaving a $2 million estate. Her will leaves an equal share of her estate to each of her six children.
Robert’s share of the estate however, is to be placed into a testamentary trust managed by two of his siblings who have the power to distribute funds to Robert at their discretion with any balance remaining when he passes away, to be distributed to Robert’s children.
Robert is concerned that his siblings will not distribute sufficient funds to him to meet his needs and in any event, believes he is entitled to more than a one sixth share of the estate, due to his limited capacity to earn an income.
Robert makes a family provision claim in the Supreme Court.
At the hearing, the Court notes that Robert has only retained $10,000 from the proceeds of his insurance claim. He has no other assets of any significant value.
Robert’s siblings are unable to demonstrate any substantial financial needs and on this basis, the Court awards Robert a lump sum of $750,000 on the condition that $550,000 is used to purchase a house. The testamentary trust is dispensed with.
If you would like Manny to address a particular legal issue, send your request to manny.wood@ticliblaxland.com.au or call him on (02) 6648 7487.
