Published in the Coffs Coast Advocate on 7 March 2015
John and Jane have been married for 30 years. They have three children together. John makes a will, leaving Jane a lump sum of $500,000 together with his “personal effects”. He leaves the rest (or “residue”) of his estate to his three children equally.
John dies leaving bank accounts totalling $1 million. At his death, he also owns a yacht, Mercedes C Class motor vehicle, clothing and jewellery. In his home office, his desk contains the passbooks relating to his bank accounts and a lottery ticket.
Shortly after his death, it is discovered that the lottery ticket was a winning ticket and can be redeemed for the sum of $200,000.
A dispute arises, whereby Jane and the children cannot agree about which of John’s assets constitute his “personal effects”.
The court considers the context of the will and makes the following orders.
Jane is entitled to the lump sum of $500,000. Although the passbooks were within John’s personal possession at the time of his death, they were not articles of “personal domestic or household use” and were therefore not deemed to be “personal effects”. This means that the children share the balance of John’s bank accounts because they form part of the “residue” of his estate.
Jane is entitled to John’s clothing and jewellery. To the children’s surprise, the yacht and the Mercedes were also deemed to be “personal effects” and Jane receives these valuable items.
Although the lottery ticket was a physical item that was within John’s possession when he died, the court found that it was not a physical “chattel” and merely evidenced a right to collect the winnings. It was therefore held that the lottery ticket did not form part of John’s “personal effects” and the winnings were to be shared amongst his three children.
This case study demonstrates that the interpretation of even simple wills can pose difficulties and have substantial financial repercussions.
It should also be noted that Jane and John’s children are all eligible to make a “family provision” claim against John’s estate within 12 months of his death. They could be successful if the court ruled that the provision for them was not “adequate and proper”.
