Applicable law

  • Succession (Intestacy) Amendment Act 2009 (NSW):
    • Arose out of NSW Law Reform Commission Report 116.
    • Inserted a new ch 4 into the Succession Act 2006 (NSW).
    • Repealed pt 2 div 2A of the Probated and Administration Act 1898 (NSW).
      • Pt 2 div 2A dealt with intestate succession.
        • Will continue to apply to persons who died intestate before 1 March 2010.
    • Ch 4 applies to persons dying intestate on or after 1 March 2010.
  • Probate and Administration Act 1898 (NSW) pt 2 div 2A ss 61A–61F:
    • Apply to persons who died between 1 January 1978 and 1 March 2010.
      • See Wills, Probate and Administration (Amendment) Act 1977 (NSW).
  • See R S Geddes, C J Rowland and P Studdert, Wills, Probate and Administration Law in New South Wales (LBC Information Services, 1996) 433–437 for deaths prior to 1978.

Intestacy rules are displaceable

  • Intestacy rules can only be displaced by a valid testamentary disposition.
    • Merely declaring that the next of kin is not to benefit is insufficient if there is no other testamentary disposition: Muir v Archdall (1918) 19 SR (NSW) 10.
      • See also In the Estate of McMullen [2014] ACTSC 53.
    • In some circumstances this may amount to a gift by implication to the next person in line after the next of kin.
      • A gift to ‘my remaining relatives’ has been construed to mean those who would take on intestacy: Application of Marais [2009] NSWSC 206.

Intestacy and partial intestacy

  • Intestacy occurs when the deceased fails to effectively dispose of property by will.
  • Total intestacy is the failure to dispose of any and all of the estate.
  • Partial intestacy is the failure to include all property, or of a specific or residuary gift in the will.
    • Succession Act 2006 (NSW) s 102: intestacy rules apply to partial intestacy.
  • An entitlement to the whole estate means the net estate (after payment of outstanding liabilities): Succession Act 2006 (NSW) s 103.

Survivorship

  • There can be no distribution to a person unless they survive the intestate: Succession Act 2006 (NSW) s 108(1).
    • ‘Survive’ is defined as:
      • born before the intestate’s death and live at least 30 days thereafter: s 107(1)(a), or
      • born after the intestate’s death where gestation in the uterus commenced before death and live at least 30 days after the intestate’s death: s 107(1)(b).
  • Succession Act 2006 (NSW) s 107:
    • Removes problems associated with near-simultaneous deaths:
      • The order of death is determined by fact or the seniority rule in s 35 of the Conveyancing Act 1919 (NSW).
    • Removes doubt relating to frozen embryos as next of kin, where they are conceived in the lifetime of the intestate but not implanted in the womb until after the death of the intestate.
      • This issue was considered in In the Matter of the Estate of the Late K (Unreported, Supreme Court of Tasmania, Slicer J, 26 February 1996).
      • Under s 107 the embryo must be implanted before death, be born alive, and live for at least 30 days after the intestate’s death.

Distribution under Succession Act 2006 (NSW)

  • Spouse and no children:
    • Spouse takes whole estate: s 111.
  • Spouse and children:
    • If all children are issue of the intestate and spouse:
      • Spouse takes whole estate: s 112.
    • If children are not all issue of intestate and spouse:
      • Spouse takes personal effects, statutory legacy and half the remainder of the estate: s 113.
        • Personal effects defined: s 101.
          • Any personal property except:
            • property used exclusively for business,
            • coins and notes that are not part of a private collection,
            • property held as security,
            • bullion, etc, held for investment and not also held for household or personal use decoration, and
            • land.
          • Simplified the position — under the previous law the spouse was entitled to ‘household chattels’:
            • Antique clocks might be part of the household furniture: Re Crispin’s Will Trusts [1975] Ch 245.
            • Coin or stamp collections would not ordinarily be part of the household: Re: Reynold’s Will Trusts [1966] 1 WLR 19.
            • Demonstrably confusing tests.
        • Statutory legacy defined: s 106.
          • CPI adjusted legacy + interest (RBA cash rate (as at the previous 1 January) + 2%, if not paid within 1 year of death).
          • CPI adjusted legacy is calculated using R = A*C/D:
            • R is CPI adjusted legacy.
            • A is $350,000.
            • C is the CPI number for the last quarter for which such a number was published before the date on which the intestate died.
            • D is the CPI number for the December 2005 quarter.
      • Children not of the spouse and intestate receive half the remainder of the estate (including relevant remote issue such as grandchildren not of the spouse and intestate): s 127(2).
      • If the death occurred before 1 March 2010 and after 1 September 2003 the spouse received the whole estate if the value less household chattels was under $200,00; between 1 September 1993 and 1 September 2003 it was $150,000: Probate and Administration Act 1898 (NSW) s 61A(2).
        • If over this prescribed amount, the spouse received household chattels, the prescribed amount, and half the remaining estate.
          • Residue of the estate held in statutory trust for the issue of the deceased.
  • Children or issue but no spouse:
    • Children take the whole estate: s 127(1).
      • Whole estate passes to children in equal shares if more than one surviving: s 127(3).
      • If a child dies before the intestate but leaves surviving issue, the issue are entitled to equal shares of the presumptive share: s 127(4).
        • ‘Presumptive share’ is the entitlement the child would have received if they had survived the intestate: s 101.
        • This process continues until the issue of the intestate are exhausted: s 127(4).
  • No issue or spouse:
    • Whole estate passes to intestate’s parents in equal shares if more than one surviving: s 128.
  • No issue, spouse or parents:
    • Siblings (without distinction between whole and half blood) take equal shares if they survive the intestate: s 129(1).
      • If siblings do not survive the intestate a presumptive share passes to their issue until exhausted: s 129(3).
  • No issue, spouse, parents, siblings, or issue of deceased siblings:
    • Grandparents take whole estate in equal shares if more than one surviving: s 130.
  • No issue, spouse, siblings, issue of deceased siblings, or grandparents:
    • Aunts and uncles (without distinction between whole and half blood) in equal shares if more than one surviving: s 131.
    • Children of aunts and uncles may take their deceased parents’ presumptive shares.
    • More remote issue of aunts and uncles have no entitlement: s 131(3).
  • Bona Vacantia
    • If all options are exhausted as per the legislation, the Crown/State takes the whole of the estate: s 136.
      • This may be characterise as a statutory right to take property and attached rights rather than a true bona vacantia: Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 [112].
        • Bona Vacantia refers to the property vesting in the crown because it has become ‘ownerless’: Dyke v Walford (1846) 13 ER 557.
    • The Minister may waive the State’s entitlement and give the whole or part of the estate absolutely or upon conditions to:
      • dependants of the intestate,
      • persons with a moral claim upon the intestate, or
      • organisations or persons whom the intestate might have been expected to make provision.
      • Applications for an exercise of this discretion must be made in writing to the Crown Solicitor: s 137.

Spouses

  • At common law, husbands and wives referred to persons lawfully married.
  • Under s 104 of the Succession Act 2006 (NSW) a spouse is for the purposes of intestacy:
    • A person married to the intestate, or
    • A party to a domestic partnership with the intestate immediately before death.
      • A domestic partnership is defined under s 105 of the Succession Act 2006 (NSW) as:
        • a registered relationship or interstate registered relationship within the meaning of the Relationships Register Act 2010 (NSW), or
        • a de facto relationship that:
          • has been in existence for a continuous period of at least 2 years, or
          • has resulted in the birth of a child.
          • De facto relationships are defined in s 21C(2)–(3) of the Interpretation Act 1987 (NSW):
            • a person is in a de facto relationship with another person if they have a relationship as a couple living together, and
            • they are not married to one another or related by family.
            • De facto relationships can exist even if one or both are legally married to or in a registered relationship (including interstate) with someone else.
            • ‘Relationship as a couple’ is determined by reference to all circumstances of the relationship, including duration; the nature and extent of their common residence; whether a sexual relationship exists; the degree of financial dependence or interdependence and arrangements of financial support between them; the ownership, use and acquisition of property; the degree of mutual commitment to a shared life; the care and support of children; the performance of household duties; and the reputation and public aspects of the relationship.
          • De facto relationships can include same-sex relationships.

Multiple spouses

  • Wills, Probate and Administration (De Facto Relationships) Amendment Act 1984 (NSW) s 61B(3A)–(3B):
    • Applies to the estates of persons dying between 1 July 1985 and 1 March 2010.
    • If there is a spouse and de facto spouse — s 61B(3A):
      • The de facto spouse takes the share the legal spouse would have taken if:
        • the de facto relationship existed for two continuous years prior to death, and
        • the intestate did not live with legal spouse during any part of that period.
    • If there is a de facto spouse and issue but no legal spouse — s 61B(3B):
      • If the de facto relationship is existed for two continuous years prior to death the de facto spouse takes the legal spouse’s share.
      • If the de facto relationship existed for less than two years prior to death then:
        • Where the only children are of the relationship, the de facto spouse takes the spouse’s share.
        • Where the only issue are grandchildren or remoter issue, then the de facto spouse takes the spouse’s share.
        • Where the children are not children of the de facto relationship, the de facto spouse cannot take the spouse’s share.
    • In all other cases, a reference to a spouse included a reference to a de facto spouse: s 32G(2).
  • Succession Act 2006 (NSW) pt 4.2 div 3:
    • Applies from 1 March 2010 where the deceased leaves more than one spouse. — s 122–123 — where there are no issue, or the only issue are of a spouse, then the whole estate is to be shared between the spouses.
    • s 124 — where there are issue who are not the issue of a surviving spouse, then the personal effects, statutory legacy and half remainder of the estate must be shared according to this section.
    • The share of each spouse is determined:
      • according to an agreed and entered distribution agreement,
      • by an application to the court for a distribution order, or
      • by an equal share if after 3 months of service of a notice by the legal personal representative the spouses have done nothing.
    • Distribution orders:
      • The Court may order distribution between spouses in any way it considers just and equitable: s 126(3).
      • The Court may allocate the entirety of the property solely to one spouse: s 126(4).
      • A distribution order may include conditions: s 126(5).

Spouse’s right to acquire property under the Succession Act 2006 (NSW)

  • Spouses have a right to acquire any property from the estate in lieu of receiving in whole or part a cash distribution.
  • The right applies where only one spouse: s 114.
  • It is an election to acquire property in specie (the form specified): s 115.
  • The election requires court approval if:
    • the property forms part of a larger aggregate such as a farmhouse or an antique that is part of a collection, and
    • the election would diminish the value of remainder or make administration substantially more difficult such as making a sale of the remainder more difficult.
  • Election is not permitted if it would require compliance with specified mandatory provisions relating to the subdivision of land or strate lots unless the spouse pays those costs.
  • Election is not permitted where the property has been acquired by a bona fide purchaser for value.
  • The personal representative must give notice to the spouse of their right to elect within one month of grant: s 116(1).
    • The notice must state:
      • how the election is to be made,
      • that the election may be subject to court approval and in what circumstances, and
      • that election must be made within three months of notice.
    • Notice is not required if the spouse is the, or a, personal representative: s 116(2).
  • Election must be made within three months from date of notice: s 117(1)(a).
    • If the spouse is the, or a, personal representative, it is three months from date of grant: s 117(1)(b).
  • The Court may extend time if there is sufficient cause, even after the three months has passed, but not once administration is complete: s 117(3).
  • Election must be by written notice identifying the property: s 118(1).
  • Notice must be given to:
    • personal representatives, and
    • all persons entitled to share in the estate.
  • Election may be revoked by written notice at any time before the property is transferred.
  • Spouse acquires property by payment of the exercise price out of money they are entitled to from the estate then, if insufficient, from their own funds prior to or on the date of transfer: s 120.
    • The exercise price is the market value of the property: s 119(1).
  • Spouse may agree to take over a mortgage: market value is reduced by the mortgage liability, but spouse takes subject to mortgage.
  • Property must be valued by a registered valuer if there is an election, or if the spouse requests one in order to consider an election.
  • Valuation report must be given to the spouse and all persons entitled to share in the estate.
  • Valuation may be waived with the consent of all persons entitled to share in the estate.
  • Under s 121, personal representatives must not dispose of property unless:
    • they are the spouse entitled to elect,
    • no election occurs and times has passed,
    • the Court refuses to authorise election,
    • the spouse advises in writing of no election,
    • the property is required to pay liabilities, or
    • the property is perishable.
  • A transaction contrary to s 121 is not invalid.
  • If the intestate died before 1 March 2010, s 61D of the Probate and Administration Act 1898 (NSW) allowed the spouse to elect to retain the shared home where:
    • the intestate died leaving a spouse and issue,
    • the value of the estate (excluding household chattels) exceeded the prescribed amount,
    • the intestate held an interest in a dwelling house in NSW, and
    • the intestate and spouse occupied the dwelling house at the time of death as their sole or principal residence.
      • Meaning of ‘dwelling house’ under Probate and Administration Act 1898 (NSW):
        • Building designed principally for use as a separate resident for one person or family plus curtilage (land around the home): s 61A(2).
          • Curtilage may be up to 2,500 m2: sch 4 cl 2.
    • Right to elect was deemed subject to sch 4 of the Probate and Administration Act 1898 (NSW).
      • The election:
        • Must be in writing: cl 2(1).
        • Cannot be revoked without the consent of the Supreme Court: cl 2(2).
        • Must be exercised within 12 months of grant of letters of administration: cl 3.
      • The spouse can require valuation of the home: cl 2(3).
      • Debts and other liabilities have priority: cl 3.
      • No right of spouse to home against bona fide purchaser for value from the administrator: cl 7.
    • The intestate’s interest may have been a fee simple, a lease, a right to exclusive occupancy, or a tenancy in common (only if held with the surviving spouse): s 61A(2).
      • Does not include a joint tenancy for obvious reasons.
    • Valuation under s 61E:
      • Administrator may value the estate, a person’s share, or the shared home.
      • A valuation made in good faith is binding.
      • The value of the shared home is derived by ascertaining its market value and deducting the mortgage and any other encumbrances.
    • Effect of taking the shared home under s 61B:
      • If the value is greater than or equal to the share the spouse would have received excluding household chattels without electing to take the home, their share is deemed fully satisfied.
      • If the value is greater than their share, the share of the issue is reduced by the amount of the excess.
      • If the value is less than the spouse’s share, the share is deemed satisfied to the extent of that value.
      • The share that the spouse would have received without making an election is, for the purposes of s 61B(13), the prescribed amount plus the half share referred to in s 61B(3)(c): the share without election less the value of the household chattels.

Issue

  • Issue means natural offspring: children, grandchildren, and their issue, etc.
  • Ex nuptial issue:
    • At common law, issue only included legitimate issue: Re: Pritchard (1940) 40 SR (NSW) 443.
      • Ex nuptial issue were filius nullius — ‘children of nobody.
      • The common law position has been abolished by the Children (Equality of Status Act 1976 (NSW): Gorey v Griffin [1978] 1 NSWLR 739, 744 (Hutley JA).
    • As of 1 July 1977 ex nuptial children have the same status as legitimate children: Children (Equality of Status) Act 1976 (NSW).
      • With effect from 1 September 1998, the Children (Equality of Status) Act (NSW) and the Artificial Concept Act 1984 (NSW) were consolidated by the Status of Children Act 1996 (NSW).
  • Status of Children Act 1996 (NSW)
    • s 5 — requires the relationship between a parent and their child to be determined irrespective of whether the parents are married.
      • This also includes determining a person’s relationship to another person via their parents.
    • s 6 — from 1 July 1977 a reference in a will to a child or a relationship to a child includes ex nuptial children.
    • s 7 — dispositions prior to July 1977 are determined by common law.
    • s 8 — applies s 5 to intestacy from 1 July 1977.
  • Legitimation:
    • A child born out of wedlock is legitimate if the parents subsequently marry, even if at the time of birth there was a legal impediment to marriage: Marriage Act 1961 (Cth) s 89.
    • A child of a void marriage is legitimate provided at least one parent believed on reasonable grounds that the marriage was valid at the time of conception: s 91.
  • Adoption:
    • For the purposes of intestacy, an adopted child is a child of the intestate, and family relationships that exist as a matter of biological fact and are inconsistent with the relationship created by adoption are to be ignored: Succession Act 2006 (NSW) s 109.
    • Under s 95 of the Adoption Act 2000 (NSW) an adoption order:
      • makes a child the child of the adoptive parents as if they had been born to the parents in lawful wedlock, and
      • causes the child to cease to be the child of their natural parents.
    • Adopted children cannot inherit from their natural parents on intestacy.
    • A testator may distinguish between natural and adopted children in their will: Adoption Act 2000 (NSW) s 98(4).
    • A child is not denied a vested or contingent proprietary right acquired prior to the adoption order: Adoption Act 2000 (NSW) s 97(1).
    • The right to inheritance from the natural or birth parent is preserved if one of the natural parents dies, the survivor remarries and the new spouse adopts the child: Adoption Act 2000 (NSW) s 95(3).
      • s 95 applies to all dispositions of property by will or intestacy if the person dies after 7 February 1967 subject to s 97(1): s 98(1).
    • Succession Act 2006 (NSW) s 99 — for the purposes of the Act, adopted persons are related to other children of the adoptive parents where:
      • adopted by both parents (whole blood sibling), or
      • adopted by one parents (half blood sibling).
  • Artificial conception:
    • Status of Children Act 1996 (NSW) s 14:
      • If a married woman undergoes a successful fertilisation procedure, the husband is irrefutably presumed to be the father even if he did not supply the sperm but only consented.
      • If a married woman undergoes a successful fertilisation procedure, the woman is irrefutably presumed to be the mother even if she did not supply the ovum.
      • If a woman becomes pregnant as a result of a fertilisation procedure using sperm or ovum from a donor, that donor is irrefutably presumed not to be a parent.
      • Surrogacy agreements are nullified as a result, however the Adoption Act 2000 (NSW) may be used to give effect to a surrogacy agreement by making an adoption order: Application of A and B [2000] NSWSC 640 (7 July 2000).
    • Non-commercial surrogacy arrangements are dealt with by the Surrogacy Act 2010 (NSW).
      • Under pt 3 the Supreme Court is enabled to make a parentage order in favour of the persons intended to be parents under the surrogacy agreement.
      • A parentage order makes the intended parents the legal parents and cancels any property rights of the child to the birth parents: ss 39–40.
      • The Uniform Civil Procedure Rules 2005 (NSW) pt 56A specifies how applications for a parentage order is made, how it is dealt with, what evidence is required, etc, consistent with the Surrogacy Act 2010 (NSW).
        • This is modelled on pt 56 which deals with matters under the Adoption Act 2000 (NSW).
      • Biological relationships inconsistent with a parentage order are to be disregarded for the purposes of intestacy: Succession Act 2006 (NSW) s 109A.

Indigenous Australians

  • The Court may approve a scheme of distribution that is in accordance with the laws, customs, traditions and practices of the community or group to which the intestate belonged: s 133.
    • The scheme may displace the intestacy rules in whole or part: s 135.
    • An application can only be made by the personal representative or a person who would benefit under such a scheme.
    • It must be just and equitable to make the order.

Forfeiture rule

  • A beneficiary under a will or next of kin on intestacy may be prevented from inheriting from the deceased if they have unlawfully killed the deceased:
    • This principle has been expressed as ‘a man shall not slay his benefactor and thereby take his bounty’: In the Estate of Hall; Hall v Knight [1914] P 1, 7 (Hamilton LJ).
  • The rule applies in cases of:
    • Inheritance under a will: Troja v Troja (1994) 33 NSWLR 269.
    • Intestacy: Re Jane Tucker (dec’d) (1920) 21 SR (NSW) 175.
    • Joint tenancy where one joint tenant kills another: Re Thorp and the Real Property Act (1961) 80 WN (NSW) 61; Rasmanis v Jurewitsch (1970) 70 SR (NSW) 407.
    • Claims under the Family Provision Act: Troja v Troja (1994) 33 NSWLR 152; Re Royce (dec’d) [1985] Ch 85; affirmed on appeal [1986] Ch 180.
    • Unlawful killing bringing about an enforceable legal right in the perpetrator — eg cases of claims under insurance polices: Cleaver v Mutual Reserve Fund Life Association [1892] 1 QB 147; and even claims under the Family Law Act 1975 (Cth): Homsy v Yassa (1994) FLC 92–442.
  • The forfeiture rule is not limited to murder: Estate of Crippen [1911] P 108.
    • It applies to:
      • Manslaughter: Troja v Troja (1994) 33 NSWLR 269.
      • Lesser crimes such as dangerous driving causing death.
      • Assisted suicide: The Public Trustee of Queensland v The Public Trustee of Queensland [2014] QSC 47.
    • It does not matter if the killing was motivated by a desire to:
      • Inherit: Gonzales v Claridades (2003) 58 NSWLR 211.
      • Alleviate the suffering of the deceased: In re Dellow’s Will Trusts; Lloyds Bank Ltd v Institute of Cancer Research [1964] 1 WLR 451.
  • Proof of unlawful killing is on the balance of probabilities, not the criminal standard: Helton v Allen (1940) 63 CLR 691.
    • The court will be conscious of the gravity of the allegation and require clear and satisfactory proof of the facts: In the Estate of Arthur Aitchison Thomson [2015] QSC 29 [29]–[30].
  • The forfeiture rule will not be applied where the unlawful killing was committed in circumstances amounting to insanity: In re Plaister; Perpetual Trustee Co v Crawshaw (1934) 34 SR (NSW) 547.
  • The forfeiture rule applies in cases of manslaughter by diminished responsibility: Troja v Troja (1994) 33 NSWLR 269.
  • The forfeiture rule applies to all those who must claim through the killer: Beresford v Royal Insurance Co Ltd [1938] AC 586.
  • To mitigate the harshness of strict application, s 5 of the Forfeiture Act 1995 (NSW) gives the Supreme Court discretion to modify the forfeiture rule; s 4 excludes case of murder however.
    • Examples of modification: Leneghan-Britton v Taylor (1998) 100 A Crim R 565; Batey v Potts (2004) 61 NSWLR 274.