Peter Townsend

Peter Townsend from Townsend Lawyers briefly explains how family provision waivers work. Often the waiver seeks to stop an ex-spouse trying to access more assets or actions. This is an excerpt from an estate planning presentation to financial advisers.

The provision is most often used when divorced couples reach a property settlement in the Family Court and want to ensure that their ex-spouse does not come back for more by making a family provision claim. However it can be used in other contexts as well.

Section 95 of the Succession Act requires that the Supreme Court approve of any release by a person of the person’s rights to apply for a family provision order.

So a person can release their entitlement to make a family provision claim provided the court approves.

Generally the Court will provide approval based on the affidavits of the parties provided the judge in chambers accepts the fundamental fairness of the deal. If in doubt they will ask for the matter to be heard in open court and or for more evidence of the arrangement and the parties’ circumstances to be provided before making a decision.

It would be open to a couple to seek such approval for their mutual wills agreement thereby preventing either of them from making a family provision claim after the death of the first in order to circumvent the agreement.

It would also be open for the surviving spouse to have their second spouse make an application for the approval for the limited amount going to the second spouse. In that case, the court would want to be very sure that the second spouse was not being unfairly treated and knew exactly what they were doing.

By Peter Townsend, Principal

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Peter Townsend

Trusts are most commonly established by a deed. Those deeds contain the terms or rules that control how the trust can be used, and the rights and duties the various parties to the trust have or owe. In our experience, trust deeds are regularly misplaced and lost.

A lost deed poses numerous problems, two of which are particularly worth noting:

First: trustee has responsibility to know terms of trust deed (equitable duty)

The trustee of a trust is under an equitable duty to know the terms of the trust that they manage. This may not sound like an issue for the pragmatic investor who simply uses their trust as an investment mechanism or for concessional tax outcomes. But Courts have shown little reluctance in concluding that a trustee does not know the specific terms of the trust when the deed has been lost.

A fairly recent example can be seen in the case of Jowill Nominees Pty Ltd v Cooper [2021] SASC 76. The Court held that it is very difficult for a trustee to discharge their duty to know and manage the trust when they don’t have a copy of the governing rules of the trust.

Second: can a trustee prove the original trust deed ever existed?

If the original deed is lost, then it may be difficult to prove that the trust exists at all. This was the case in Mantovani v Vanta Pty Ltd (No 2) [2021] VSC 771. In that case, the trust deed had been lost and there was not enough secondary evidence to show that the trust was in existence. By secondary evidence, we mean documents and dealings that clearly showed the identities of the beneficiaries, the property of the trust, and the nature of the trust (i.e. fixed, discretionary, SMSF, etc).

The Court held that the trust failed due to uncertainty, which means that without the trust deed the terms of the trust, and the parties to the trust, were unknown. This was arguably the better outcome for the trustee; had the court found that there was a trust then, pursuant Jowill above, the trustee might have been found to have breached their duty to the trust by not knowing the terms of the trust.

In Vanta, the Court then confirmed that a failed trust automatically gives rise to a resulting trust. A resulting trust means that the trustee holds the property on trust for the settlor. This means that the property of the trust ‘revests’ (effectively returns) to the person who contributed that property (i.e. an equitable interest returns to the settlor), rather than the beneficiaries.

This probably wouldn’t be a problem if the settlor still wanted to establish a trust with that property for the beneficiaries; but if the settlor had passed away, for example, then that property would go into their estate and be dealt with by the executor. There is material risk that the executor would not consider the trust beneficiary’s interest as relevant. And that’s not to mention the catastrophic tax consequences that could flow as a result of such a revesting.

Safety in scanning and holding trust deed in a digital vault

The importance of safely keeping the original establishment deed of a trust cannot be overstated, and yet deeds are lost with surprising regularity. Losing the deed can have deleterious consequences for both the trustee and the beneficiaries.

All deeds should be scanned as those electronic copies may be invaluable if the original is misplaced. Our sister company, SuperCentral, offers advice and services relating to lost deeds and an independent digital vault for scanned copies.

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Peter Townsend

The rules relating to what a self-managed superannuation fund can and cannot invest in are complex and for the uninitiated appear confusing and alien. But there is a basic logic to them.

The purpose of superannuation is to provide money for the member to live on in retirement, thereby taking pressure off the Government age pension. Because the Commonwealth Government provides substantial tax concessions to super funds in an effort to attract people to invest in their super, it sets very strict rules to ensure that the funds and the members are doing everything necessary to achieve the goal of maximising retirement benefits, and not jeopardising that goal by using the super money prematurely or in a manner that could result in the super being lost.

Government regulation prohibits using your super to invest in your other businesses or investment schemes, your family’s business structures or other investments where what you are doing is supporting the investment because of the relationship rather than adopting the independent and objective investment assessment that you would do if the investment were totally at arm’s length.

An investment that is too closely connected to the member of the fund is called an ‘in-house asset’. Assets controlled by people, companies or trusts that are ‘associates’ of the member are in-house assets. The definition of ‘associate’ in the legislation is eye-wateringly complex and designed to throw the net as wide as possible to avoid the ability to side-step the rules. A super fund cannot invest more than 5% of its total value in ‘in-house assets’.

Having said that, there are ways that you can use your super to support your other investments. Which brings us to Ted and Alice.

Ted and Alice have an SMSF. Their close friends, Roger and Diane, have a family trust. The two families are considering a property development where the super fund and the family trust provide the capital to buy the land and carry out the building work. The advice from their accountant is to use a unit trust as the vehicle for the development.

Will that unit trust be an in-house asset? Yes, if the unit trust is a so-called “related trust.” The unit trust will be a related trust if the super fund controls the unit trust. The concept of ‘control’ is very strictly and broadly defined as well.

So if the super fund holds more than half of the units or has more than half the votes at unitholder meetings it will be said to control the unit trust.

Alternatively, if Roger is Ted’s business partner, then they would be ‘associates’ and together would control the unit trust, again making the unit trust an in-house asset. The super fund could not then invest more than 5% of its worth in the unit trust.

The Government will allow an investment into what might otherwise be an in-house asset but prescribes the eligibility criteria in such a way as to try to ensure that the investment is as ‘safe’ as possible. The rules are set out in Superannuation Regulation 13.22C and so naturally the trust is called a 1322C trust.

A super fund can invest in a 13.22C trust like any other investment by the fund but qualifying as a 13.22C trust can be difficult for the parties involved and if at any time the unit trust fails to meet any of the qualifying criteria, it can never again be a 13.22C trust.

A 13.22C trust cannot operate a business, borrow money, mortgage its property, hold an interest in another entity, lease property to a related party (business real property excepted), loan money or acquire an asset from a related party and all of its dealings with other parties must be at arm’s length.

A super fund wanting to partner with others in another legal entity to develop real estate or engage in some other investment must consider carefully whether that entity is an in-house asset and if so whether an alternate structure, including potentially a 13.22C trust, is necessary for the fund to remain compliant with the law and avoid the allegation of back-door benefits.

By Peter Townsend, Managing Director

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Peter Townsend

For advisers and accountants the new compliance technology incorporates a large range of digitised wealth management documents needed to develop and manage client wealth strategies while also ensuring compliance remains a key focus.

“Mitigating adviser risk is at the heart of what we do and this new platform extends our ability to provide that peace-of-mind,” says SUPERCentral’s Chief Operating Officer, Nikki Rivers.

The new technology broadens the company’s digital service delivery capacity and integrates bespoke and tailored legal documentation, advisory and remediation services onto one platform.

Their service offering covers an extensive range of wealth management documents and other services in SMSF, LRBA, trusts, asset structuring, estate planning and probate services.

“With over 300 online documents, many with legal review at no additional cost, and our ability to progress advisors and their clients seamlessly to Townsends Lawyers as strategic advice or tailored remediation is found to be needed, puts SUPERCentral at the forefront of SMSF and wealth management document service providers,” Ms Rivers added.

The company will also offer an extensive subscription-based SMSF product as well as a SaaS solution that allows users to bypass lengthy IT development timeframes and provides for an integrated services capacity.

Peter Townsend, Managing Director of SUPERCentral, said: “Our clients are constantly dealing with changes to regulation and legislation meaning even simple documents can expose them to risk.  We developed our iconic automatic self-managed super deed update and documentation services in response to constantly changing compliance requirements, and it is still supplying advisers peace of mind after 16 years in the market.”

The platform development broadens SUPERCentral’s digital capacity and positions them strategically in the market to further leverage their technology investment.

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Peter Townsend

Amendments made last month to the NSW Duties Act could cause material headaches to super funds holding real estate in NSW.

The only remedy for those headaches is good compliance documentation.

If you’re interested, the legislation was called the State Revenue and Fines Legislation Amendment (Miscellaneous) Act 2022 (NSW).

Under the Act, ‘ad valorem’ duty (i.e. duty based on the full value – like what you pay on your property purchase) will be levied on the making of a statement that has the effect of acknowledging that property vested, or to be vested, in the person making the statement, is held, or is to be held, in trust for a person mentioned in the statement.

Don’t yawn, keep reading if SMSF property held in NSW

I can hear you yawning but you need to stay with me if your SMSF owns property in NSW.

The now-commercialised and hellishly expensive land titles registration service in NSW responsible for administering the land titles register has the same policy as its public predecessor in refusing to register a trust on the land titles register.

If your SMSF owns real estate the title only shows the name of the trustee of the SMSF not the fund itself.  What happens if it becomes necessary to prove to a third party (bank, ATO, family court, creditor etc) that the trustee is in fact holding the property on trust for the fund?

Previously when asked to assist with this issue we’ve suggested an Acknowledgement of Trust – a document which created no new legal or equitable rights but simply acknowledged an existing trust. This now seems to be dutiable in NSW, with the person making the statement liable to pay duty on the dutiable value of the property.

This legislative change follows decisions like Chief Commissioner of State Revenue v Benidorm Pty Ltd [2020] where the Court of Appeal unanimously held that a document which does not effect a transaction, but merely acknowledges an existing legal position, is not liable to duty under the Act.

Potential minefield

It is not yet clear how these provisions will affect various legal documents in practice, however given the various acknowledgements of existing trusts in many legal documents it has the potential to be a minefield.

So how do you now prove that the registered proprietor of the land is holding that land on trust for the SMSF?

Have the necessary compliance documents:

• resolutions of the fund trustee
• resolutions of the fund members
• bank statements showing that all the purchase money came from the fund.

And, of course, keep all the records of the transaction like contracts, correspondence, legal files, duty payments etc.

Oh, by the way, the same applies to your Family Trust.

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Peter Townsend

Covid-19 has caused considerable stress and misery but every cloud has a silver lining and that lining in the case of covid-19 may be the speedy development of a regime for permitting companies to sign documents using electronic means rather than the so-called ‘wet’ signatures of directors.

On 10 February 2022, the Corporations Amendment (Meetings and Document) Act 2021 was passed by both houses belatedly bringing the signing of documents by companies into the 21st century.

The electronic signing laws come into effect on the day after the Act received Royal Assent.

Changes permitting the holding of virtual meetings come into effect on 1 April 2022.

We enjoyed electronic signing laws during lockdown but further consultation by the Commonwealth government led to further improvements on the lockdown regime.

The regime will simplify the execution process.

People signing on behalf of a company will no longer be required to physically ‘wet’ sign documents or do so in the presence of a witness. The regime is technology neutral and does not specify ways of signing a document that are allowed versus those that aren’t.

Signatories will also be allowed to sign only the signature pages of a document rather than the whole document.

From the Commonwealth’s perspective, companies may sign deeds electronically, though it is important to note that State and Territory law also has much to say about what constitutes a deed and how it may be signed.

A director of more than one company can now sign a document once on behalf of all the companies in the group to which that director is appointed and officers of a company (directors, secretaries etc) are no longer required to sign the same document. They can sign identical counterparts.

It is a common trap that the sole director of a private company forgets to formally appoint themselves as the company secretary which can lead to real issues when it comes to the proper execution of documents both under the company’s constitution and the law.

Section 127 of the Corporations Act 2001 (Cth) sets out how a company may execute a document and s.129 of that Act says that provided that form of execution is followed then a third party can rely on that execution as being lawful and does not have look behind it to make sure that the company followed all its internal rules.

Sole directors of private companies will now not have to worry about their formal appointment as company secretary because the sole director is now authorised to sign documents pursuant to section 127 of the Corporations Act, and third parties can rely on that execution based on the permitted assumptions under section 129.

Private companies can act through agents for the sake of convenience and to avoid the need for directors or boards to be constantly involved.  Under the new rules people who act as agents of a company, including where the company has appointed an attorney under power, can make, change, ratify or release a contract or execute documents (including deeds) on behalf of a company.

The formal validity assumptions in section 129 of the Corporations Act will extend to those individual agents signing under the new section 126 and those agents no longer need to be appointed by deed in order to execute deeds.

Despite the benefit of these changes it is important to note that, except as outlined above, the new regime does not apply to the signing of documents by individuals (as opposed to companies). Signing by individuals is regulated by the States and Territories and we must look to those local laws for the rules that apply.

Let’s hope those local rules can be standardised across Australia soon.

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Peter Townsend

What happens when a trustee places the beneficiary’s money into their own account?

Trustees are under a multitude of responsibilities when it comes to managing the trust. One particularly important responsibility is the trustee’s duty to keep the trust assets separate from their own assets. This duty has been described as ‘a hallmark duty of a trustee’, ^[1] and the global financial crisis of 2007-2009 exposed numerous cases where investors’ money was not segregated according to the trust deed, relevant legislation or principles of equity.

When this duty is breached, the court will be asked to either follow or trace the money. Once the money has been followed or traced to its present position, the court can then determine whether any remedies can be awarded.

Following is as simple as the name would suggest. It merely allows the court to track where the money has gone, sometimes through numerous sets of hands, and where it currently resides. It is appropriate when the money itself has not changed character in any meaningful way.

Tracing, on the other hand, allows for money to be tracked when it has been transformed, for example when it has been used to purchase property. It allows the court to identify the equivalent value of the money that the beneficiary has had taken from them. Tracing is not always a simple process: for example, a trustee may mix money from multiple beneficiaries, and then spend most of that money, and then personally go bankrupt. With no personal recourse against an insolvent trustee, it becomes greatly important how the remaining money is apportioned between the beneficiaries. The preferred method of apportionment has undergone change recently: the old ‘first-in-first-out’ rule^[2] has been replaced with ‘rateable distribution’,^[3] where each beneficiary receives a part of the funds that is proportionate to their investment.

The classic case demonstrating the distinction between following and tracing is the English case of Foskett v McKeown^[4]. In this case, the trustee spent over £20,000 of beneficiary money on his own life insurance premiums; when the trustee committed suicide, his children received the £1,000,000 payout from the life insurance claim.

The beneficiaries claimed that they were entitled to a proportionate share of the payout, but the Court of Appeal held that they were only entitled to their £20,000. This was because the funds could be followed from beneficiary to trust to trustee to insurer, and the funds had not transformed in character. For the beneficiaries to have successfully claimed a share of the life insurance payout, they would have needed to convince the court to trace the funds, rather than follow them.

The beneficiaries did not put forward an argument that their money had, in fact, been transformed. The “property” that the money had transformed into would have been the policy itself; the policy only had monetary value on the trustee’s death. Tracing would therefore have been more appropriate than following, which would have allowed for the beneficiaries to claim a rateable distribution of the insurance payout. We suspect that this argument would have succeeded, but because the issue was not considered (and has not been considered in sufficiently similar circumstances since), we can’t say for certain which approach the court would have preferred.

Trustees must be vigilant to all of their duties, and particularly the duty to not mix assets. It can be surprisingly easy for trustees to accidentally place trust funds into their own account, especially when corporate trustees serve multiple purposes. The best way for a trustee to meet this responsibility is to establish clear wealth management structures and strategies from the beginning, and to understand the obligations that attach to the various offices included in those structures.

By Peter Townsend, Principal

———

References:
[1] Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588 [34] (Gaudron, McHugh, Gummow and Hayne JJ) adopting terminology from Puma Australia Pty Ltd v Sportsman’s Australia Ltd (No 2) [1994] 2 Qd R 159, 162 (McPherson ACJ).
[2] Clayton’s Case (1816) 1 Mer 572; 35 ER 781.
[3] Re French Caledonia Travel [2003] NSWSC 1008; (2003) 59 NSWLR 361.
[4] [2001] 1 AC 102.

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Peter Townsend

Husband (H) and wife (W) are members of a self-managed superannuation fund, and as part of their estate planning, they want to direct the trustee of the fund to set up child pensions for their eligible children if either of H or W die early.

As their children are likely to qualify for the child pension well into their twenties while they continue their studies, H and W see the prospect of their children wanting a lump sum for a number of possible reasons.

The parents aren’t averse to a child getting access to a lump sum but only if it’s for an appropriate reason: investing, not lifestyle.

They therefore don’t want to ban commutation outright in the pension terms, but want to ensure that their children cannot commute the pension without the consent of the survivor of H and W.

Is such a condition possible without jeopardising the compliance and validity of the child pension?

Both the SIS Act and the Income Tax Assessment Act 1997 adopt the SIS Regulations definition of a pension provided in regulation 1.06 of the SISR. It is therefore central that a death benefit pension meets all the requirements set out in that definition to ensure the payments are not in breach of the SIS Act and also to ensure the payments receive concessional tax treatment under the tax laws as a ‘superannuation income stream’ as referred to in the Income Tax Assessment Act 1997 (Cth) and Income Tax Assessment Regulations 1997 (Cth).

The SISR definition states that a benefit is taken to be a pension if the rules applying to the pension meet the standards of sub-regulation 1.06 (9A). Our interpretation of the sub-regulation (9A) is that it sets out the minimum standards the rules of the pension must meet in order for the pension to be deemed a complying pension under the SISR. A pension with additional rules in place may still qualify as a complying pension, however the additional rules must not impede compliance with the minimum standards as set out in the SISR.

The terms of the pension (other than those relating to commutation) must meet the general standards of a beneficiary pension, namely: payment is made at least annually and total payments made each year are more than the statutory minimum under Schedule 7 of the SISR.

A key SISR requirement relating to commutation of a child beneficiary pension is that the pension must only be paid to eligible persons under regulation 6.21, therefore implying that the pension must be commuted upon the beneficiary ceasing to meet the eligibility requirement.

Under regulation 6.21 of the SISR, a child is only eligible to receive a beneficiary pension in the following circumstances:

1. while they are under the age of 18,
2. while they are aged 18 or more but less than 25 years and are financially dependent on the member, and/or
3. while they are aged 18 or more but have a disability of a kind described in s8(1) of the Disability Services Act 1986 (Cth).

The SISR definition does not prohibit the trustee and the member agreeing, in the form of a pension agreement, to only commute the pension with a third party’s consent, so long as the prescribed requirements in the SISR definition are preserved and take precedence over the power of the consent.

In order to ensure compliance with the minimum standards, the pension terms must contain an overriding provision for the trustee to commute the child beneficiary pension if the beneficiary is no longer eligible for the pension without needing to first seek your consent. This would effectively mean it would not be an effective strategy to prevent commutation of a child beneficiary pension to an adult child beneficiary who has attained the age of 18 if the child is not financially dependent at that time.

If, however the child is financially dependent after attaining the age of 18, the consent power may be used to prevent commutation of the pension until the child is no longer dependent or attains the age of 25, whichever is earlier.

Practically, the trustee must assess whether or not the beneficiary continues to be eligible (i.e. financially dependent) to receive the pension on and from the date the beneficiary attains the age of 18. This assessment is a question of fact. Once the beneficiary is not financially dependent and does not have any disability, the pension should be commuted without needing to seek any consent.

If the pension agreement is drafted in a way that does not ensure the SISR requirements taking precedence over any consent power, the pension will not meet the SISR definition of a superannuation income stream for tax law purposes. The pension in such event will also result in breach of the mandatory death benefit cashing out requirement under the SIS Act.

By Peter Townsend, Managing Director

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Peter Townsend

A withdrawal and recontribution strategy could over time permit a member to transfer a material part of their superannuation to a non-dependant who would not ordinarily be entitled to receive the member’s super following the death of that member.

Regulation 6.22(2) of the Superannuation Industry (Supervision) Regulations (“SIS Regulations”) provides that a member’s death benefits must not be cashed in favour of a person other than one or more of the deceased member’s dependants or the member’s legal personal representative (i.e. meaning to their estate to be distributed in line with their Will or pursuant to the intestacy laws if there is no Will).

Section 10 of the SIS Act defines “dependant” for the purposes of regulation 6.22 to include the deceased member’s spouse or child, or a person who was dependent on the deceased member or who was in an “interdependency relationship” with the deceased member immediately prior to the death.

Given these limitations how would you go about effectively transferring the member’s superannuation death benefits to a person who is not one of those listed types of persons and therefore not a dependant?

You could simply give the benefit to the ‘legal personal representative’ (i.e. the deceased member’s estate) and pay it to the beneficiary in accordance with the deceased’s Will. But that involves taking the money out of the superannuation regime.

What if you wanted to leave the money in super for the tax concessions or to protect your chosen beneficiary from themselves (by locking up the super and forcing them to save) or because the fund holds a particular asset that you wish to retain in the super fund either because you do not want to trigger CGT or because it is just not the right time to realise profits.

A withdrawal and re-contribution strategy could be the answer. The chosen beneficiary joins the self-managed superannuation fund. The main member then withdraws an appropriate amount that they gift to the chosen beneficiary who then uses that money to make a non-concessional contribution to the fund.

What that means is that over time the main member’s balance is going to progressively fall and the chosen beneficiary’s balance is going to rise.

If you can do that for long enough and the payments of course are under the non-dependant’s non-concessional contributions cap, then the member’s balance is gradually transferred to the non-dependant without the need to worry about regulation 6.22 because it is irrelevant.

Having to pay out a smaller death benefit on the passing of the main member will result in less strain being placed on the liquidity of the SMSF at that time. This in turn will mean any large illiquid assets that would otherwise have had to have been sold to pay out a larger death benefit could be retained within the superannuation environment, netting the non-dependant (i.e. the remaining member) a more favourable financial position.

There are pitfalls including the time that the strategy is likely to take to play out and the fact that it is dependent on the chosen beneficiary’s transfer balance cap and therefore their non-concessional contributions cap.

It is also worth noting that the strategy should be fully and carefully documented, particularly the deed of gift of the withdrawn super benefit from the main member to their chosen non-dependant.  Given that the dominant purpose of the strategy is to increase the non-dependant’s superannuation and not to avoid tax, any small tax saving which results would likely not form the basis of a challenge under Part IVA.

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Peter Townsend

Can a child treat his/her parent badly and still expect a share of the parent’s estate? The latest case highlights the answer.

You don’t need to scour the bookshops for a good story about the power struggles in a dysfunctional family.  Just read Mr Justice Slattery’s judgement in Grant v Grant (No.2) 2020 NSWSC1288

This story pits daughter against parents, sister against siblings and parent against parent; all played out in the refined world of Sydney’s eastern suburbs and north shore with an occasional side trip to Cambridge in England.

The case is much too long to do full justice in this short article but is a clear example of a court refusing to grant a child a greater share of her mother’s estate due to her mistreatment of her mother during her mother’s life.

Nerez Grant sued her mother’s estate because her mother’s Will did not provide “adequate provision for (Nerez) proper maintenance, education or advancement in life”.

The Court confirmed that the decision as to whether to make a family provision order in favour of the daughter, Nerez, would be a two-stage process – first you decide if what she has received is adequate and, if not then, second, you work out what would be.

But there’s a “but”.  The relevant legislation (the NSW Succession Act) gives the Court the power to determine what is adequate, including the power to refuse to make any order even though the applicant has shown the Will to be inadequate. That is particularly so where there is evidence of mistreatment of the deceased by the child applying for more of the estate.

“The court should accept that the deceased … is entitled to make no provision for a child, particularly in the case of one ‘who treats their parents callously, by withholding, without proper justification, their support and love from them in their declining years. Even more so where that callousness is compounded by hostility’.”

The Court is permitted to consider the circumstances in which the deceased’s relationship with their child broke down or was dysfunctional including the character of the applicant child.

In this case there was conflicting evidence of what Nerez had done for, and to, her parents, particularly her mother.  She maintained she’d been a loving daughter while the executor’s witnesses said quite the contrary.

The Court didn’t think much of the truthfulness of either Nerez or her daughter Kayasha (also involved in the proceedings).  It is possible to have a grudging admiration for the two women who represented themselves in the court proceedings because they couldn’t afford a lawyer.  It is also clear that the Court afforded them every opportunity and exercised considerable patience in helping them navigate the difficulties of conducting a court trial.  But that admiration cannot hide the fact that Mr Justice Slattery found both women were poor witnesses and their evidence was unreliable.

On the other hand, the executor of the estate (Nerez’ brother) had a number of witnesses from both inside and outside the family, all of whom were found to be reliable and believable.

Nerez failed in her claim for provision out of her mother’s estate. The Court held that her ill treatment of her parents, particularly her mother, over a long period disentitled her to any further relief by way of family provision.

“Mrs Grant was afraid of her daughter Nerez with good reason. Nerez behaved with callous brutality towards both of her parents over decades….  Nerez treated her mother as a creature to be frightened and then coerced into doing what she wanted. Any vestiges of mother-daughter affection had long disappeared between Nerez and Mrs Grant. Stung by the constant pain of Nerez’s drug taking, thefts, aggression, unpredictability and the shame she brought upon the family, Mrs Grant’s decision to keep her daughter at arm’s length was entirely understandable.”

It is sometimes said to parents: ‘Be kind to your children as they’re the ones who decide which nursing home you go into’.  It might also be said to children ‘Be kind to your parents, as they’re the ones who decide how much, if any, inheritance you’ll get.”

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