Hypotheticals by Manny Wood. Published in the Coffs Coast Advocate on 8 July 2017.
Charles makes a will, leaving his Westpac shares and his Smith Street property to his daughter, Jane. He leaves the rest of his estate to his only other child, Richard. Jane is appointed as executor.
When Charles passes away, Jane seeks legal advice regarding the administration of his estate.
Jane advises her solicitor that the Smith Street property was sold shortly before Charles’ death and that the proceeds of sale were used to pay an accommodation bond so Charles could be admitted into a nursing home. The sale of the home was conducted by a Conveyancer and Charles’ will was not reviewed.
Jane is advised that because the Smith Street property was sold prior to Charles’ death, the gift “lapses” and she is not entitled to the proceeds of sale.
The solicitor advises Jane that if the property had been sold pursuant to a power of attorney, the proceeds of sale may have been able to be clawed-back, in her favour.
In this case however, the proceeds of sale are dealt with under the “residue” clause in Charles’ will, of which, Richard is the sole beneficiary.
Jane asks her solicitor about the shares. She is advised that the dividends payable on the shares up to Charles’ date of death should also be accounted for in favour of Richard, as the beneficiary of the residue of the estate.
Jane is however entitled to the dividends payable after the date of death. Calculating the division of the dividends requires an accountant’s advice. The solicitor advises that an appropriate “apportionment” clause in Charles’ will could have avoided these problems.
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.
