I read with interest a recent article in the Australian Newspaper in relation to a Victorian Supreme Court decision where a stepdaughter was awarded a large payment by the Court for a claim made against her stepfather’s estate.
The claim was made against the estate of the late Harold Ward. Mr Ward died in 2007 and left his shares in the family company Ward McKenzie to his three natural children. These shares were valued at approximately $30 million.
The natural children argued that their father never wanted anyone other than a blood relative to own shares in the company. He had indicated the success of the company was put down to wholesome family values.
The claimant was the daughter from the deceased’s second wife. She lived with him for four years between the ages of 14 and 18 when she became independent.
The deceased, Mr Ward did not make provision for his stepchild for the reasons outlined above, and also that the stepchild was to receive provision from her own mother’s Will.
The natural children argued it would be difficult to provide for the stepchild as the only asset in the estate were shares and there was no cash. The shares will be difficult to sell because it was the deceased’s wish that they remain in the Ward Family.
Justice Hargrave of the Victorian Supreme Court ordered that the Ward children pay an amount of $750,000.00 to the stepsister to be held in trust, plus $50,000.00 a year living expenses until her mother dies. The lump sum was to be held in trust by a trustee if who could make sound financial decisions.
This case highlights the importance of identifying any potential claims when drafting and preparing your estate plan. In this case the Judge did not interfere with the deceased’s wishes of having ownership of the company outside the family. Instead the lump sum payment was made.
Assessing these types of claims a Court will take into consideration the circumstances of the party making a claim, and at this instance, the Judge thought it appropriate to make the award, despite the wishes of the deceased.
Please do not hesitate to contact me if you have any questions about this very important topic.