Article Trunk



Where is the Inheritance?

10.05.2009 · Posted in Finance Articles

An worthy of note case has lately been handed down from the Courts. This case now gives Parents with the rights to ***** their Offspring of inheritances. The judgment goes against what was previously believed to be good law.nnTo date, we have all belief that Parents owe a duty to their Offspring to provide for them in some way upon their deaths. Well that reasoning may go by the board if the most recent case is anything to go by.nnThe casennThe case goes something like this. Dad, Mum and two Daughters lived happily together but when Mum died and left her Estate to Dad, the two Daughters fought over the Worth. The result was the Daughters ended up with $56,000 whilst Dad received $20,000.nnDad decided that he would place his affairs with the Public Trust and so he completed a Will in which he left nothing to his Daughters. He also left directions with the Public Trust that they were not to tell his Daughters about his loss of life, his funeral or his Will.nnDad’s account to the Public Trust went along the lines that his Daughters gave him nothing, not even respect and that is what he planned to give them on his demise – Nothing.nnWhen Dad died the Public Trust actioned his instructions. Here lies the problem. No loss of life notice was available. The Public Trust did however advertise for creditors of the Worth to come forward but none ever did which is standard policy when dealing with a private Estate.nnThe Public Trust did not notify the Daughters and the Worth, valued at circa $250,000, was passed to his de facto partner, in accordance with in his Will.nnThe oldest Daughter learned of her Father’s death, about two years after the event, which is long time to try and follow up after a death, on the other hand didn’t deter her. Instead, she sued the Public Trust, citing they had a legal duty to advise her of her Father’s demise. If she won the claim, she would likely obtain approximately $62,000.nnThe JudgmentnnThe Court on the other hand didn’t quite see the Daughter’s side of the story. Instead they issued a judgment stating that Executors (the Public Trust in this particular case) did not have a general duty to notify potential claimants about a loss of life or even a general duty to advertise for claimants. Rather, Executors have a duty to tell a person only when they know that person desires to make a claim. So, Executors have to have actual knowledge of a potential claim rather than pre-supposing someone might make a claim.nnThe Court completed up by saying that the Public Trust did not have actual knowledge that the Daughter would make a claim and therefore, was not liable.nnLessons for us all to learnnnSo what does all this mean for Parents and Children? Well to start with, we want all families to play together and stay together. The emotional cost of falling out with each other is huge.nnSecondly, we would like to see all possessions held in a Trust not in a person’s personal name and capacity. Why? Because Trust belongings can be passed from Trust to Trust meaning they can be passed from a Parent’s Trust to a Trust established for their Offspring upon that Parent’s demise. This protects belongings from Creditors and the Legitimate Assignee and of course, negates gift duty.nnThirdly, everyone should have an up to date Memorandum of Desires. This record will tell your existing Trustees what you want done with the belongings of the Trust when you are dead.nnLastly, everyone should have a current Will which deals with the material goods that you do actually hold in your individual name at the time of your death, such as tools, jewellery, etc.nnOf course, asking your Parents what they expect to do with your inheritance is often a hard subject to broach. A way of opening up this type of discussion with your Parents is to tell your Parents what you expect to do with your individual material goods for your individual offspring.nnOne of the lessons to be taken from this case is if you want to protect the inheritances you are going to receive from your Parents and if you want to shelter the inheritances you intend to leave to your own children, ensure you take action.

Leave a Reply

You must be logged in to post a comment.