A case study on moving quickly to protect assets

From

Peter Townsend

After their father died, John’s and Mary’s mother was grief-stricken and for several years had little or no social life. Gradually, though, she began to broaden her social network and eventually she met a nice man who shared her interests.

John and Mary quite liked Neville, though they never really thought of him as part of the family. Neville was a widower who also had children. He was not very well-off.

They were therefore surprised when their mother made Neville the executor of her estate and set up a testamentary trust under her Will, appointing Neville as the trustee. She said it was just because he would have been hurt if she’d ignored him, and that she’d told him that he and her kids were to share in the estate equally.

Now that their mother has passed away, John and Mary have noticed that Neville is very cool toward them and has become secretive about their mother’s estate. He’s already taken steps to sell their mother’s house. They think he’s going to take the entire estate for himself.

Ultimately, John and Mary will need to have their day in Court, where they can seek orders ensuring their mother’s testamentary intentions are carried out. But in the short-term how do they stop Neville from dealing with the estate assets?

The answer may be by filing a caveat at the Supreme Court.

Normally we think of caveats only in the context of real estate. But there is another sort of caveat that applies in the probate jurisdiction of some States. This is a notice to the Court requesting that the Court not issue a grant of probate until the applicant (‘caveator’) has the right to be heard on the issue.

In our case John and Mary would file their caveat as soon as possible. The Court will then advise them when Neville’s probate application is made and they will have the chance to put their arguments to the Court as to why Neville’s application should not be granted and what else the Court may consider doing.

In the recent Victorian case of Re: Przychodski (2016) the Court set out the principles that Courts follow in assessing the right of a person to successfully file and maintain a caveat against a grant of probate:

  1. The Court’s main role is to ensure that the testamentary intentions of a deceased person are carried out and the beneficiaries receive what is due to them.
  2. Upon receiving notice from the Court that an application for probate has been made, the caveator must file particulars to establish not only that they have ‘standing’ to lodge the caveat but also their prima facie case as to why probate should not be granted as sought.
  3. To establish ‘standing’ in a proceeding relating to a deceased estate, a person must be able to show that their rights will, or may, be affected by the outcome of the proceeding (usually established by the person showing they have a beneficial interest in the deceased’s final Will or under a previous Will).
  4. To establish a prima facie case the caveator must provide sufficient factual basis for the grounds of objection relied on.
  5. The grounds of objection define the questions for trial and enable the person applying for probate to understand the case against making the grant.
  6. If the particulars of the grounds of objection are imprecise, vague or inadequate the Court may order that further particulars be provided or ultimately strike out the caveat because it cannot be supported.
  7. If there is a proper basis for the caveat, the Court will make orders joining the caveator as a defendant in the proceeding applying for probate and a hearing can proceed.

John and Mary need to act reasonably quickly because the whole caveat process is designed as a way that a person interested in an estate can be kept informed of any application for probate and given the chance to object to that grant.

By Peter Townsend, Principal

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