The media tend to publish stories fairly frequently about wealthy individuals not leaving their wealth to their children or next of kin through their Wills, and even about individuals who have been left out of Wills.
Celebrity trends
Earlier this year various articles were published about a famous high profile celebrity Sting (and other like-minded celebrities) who made a public statement, on record, that his children can expect not to inherit his multi-million dollar fortune.
Sting’s rationale for his decision was quite simple: “They have to work”.
The 62 year old musician and celebrity, who newspapers quoted as being worth an estimated $327 million, has three sons and three daughters. He said that he does not want to leave them trust funds that are albatrosses around their necks.
He is not alone in this line of thought.
Bill Gates, the world’s richest man, has previously said that his children should not expect to inherit the vast majority of his $76 billion fortune.
Celebrity chef, Nigella Lawson said a few years ago that she was determined that her children should have no financial security, as it “ruins people not having to earn money”.
Simon Cowell, the music moghul whose son was born earlier this year has also stated that he will likely leave his estimated £225 million fortune to charity as he does not believe in passing on from one generation to another.
Clearly this is a topic that can be controversial, though to a certain extent, it can be argued that the sentiments expressed above by these celebrities are ones that are shared in various capacities across many families in Australia today.
So does that mean that you are allowed to exclude your family from your estate?
Or even to not leave certain assets to certain family members? Does the Law have anything to say about this?
Generally speaking the Law allows an individual to accumulate wealth during their lifetime and choose how to deal with that wealth upon their passing.
However the Law also recognises that whilst an individual can choose how to distribute their assets upon their passing, that individual should take into account those people who may have been financially dependent on them during their lifetime and accordingly should provide for them through their Will.
If no such provision has been made, or if in fact provision has been made but it is deemed inadequate, then the Law allows such aggrieved individuals to make a formal claim upon that deceased individual’s estate through the process of litigation.
Therefore each of the famous people noted above are laying themselves open to a potential claim against their estate, and the heartache, financial cost and time factors that such claim could inevitably bring with it.
Closer to home – what about in Victoria?
Today, people are living longer, accumulating more wealth, having children, sometimes later in life, possibly having more than one marriage or relationship also.
This all means that when it comes to making decisions about their estate and how they want their assets to be distributed upon their passing, not only is it:
a) complicated, due to the nature of their possibly large asset base;
b) complicated, due to potentially complex and extended family scenarios
but also if they do not wish to leave part of their estate to particular family members, or in the case of the celebrities noted above, nothing at all to their children, then it may actually also be
c) difficult – it may cause family rifts;
d) be controversial; and
e) open up your estate to potential claims against it by anyone who has not been adequately provided for.
There have recently been a number of proposals in relation to the legislation in Victoria that governs applications by individuals who are claiming entitlement to an estate in which they believe they have been inadequately provided for.
Such applications are becoming increasingly more common, and as people grow older and wiser it is an area of which that anyone who wishes to arrange a Will really needs to be aware.
Get good advice
Certainly if you are considering not passing your estate to certain beneficiaries, or leaving family out altogether as the celebrities noted above have done, then it is vital that appropriate legal advice is sought and an appropriate Will is drawn up so that you fulfil your obligations, but at the same time your own wishes can, to the fullest extent possible be met.
Morrows Legal has experienced lawyers who can work with you through this process to ensure that you are aware of your obligations and appropriate estate planning documentation can be prepared for you.
You may wish to speak to your adviser in the first instance so that you can start the process off for arranging a Will. Your advisor will put you in touch with one of our experienced legal team members who will work through your intentions to ensure that you are fully advised and able to make appropriate, informed decisions for yourself.
By Kiren Chitkara, Lawyer, Morrows Legal