WEEK 8 - MOD 5 - Tutorial answers for Week 8 (module 5). PDF

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Tutorial answers for Week 8 (module 5)....

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Week 8 – Module 5 5.1 What is intestacy and its history Total intestacy:  No will  Executor and no dispositions of property Partial intestacy:  Will disposes of only part of a person’s property  

Rules the same irrespective of whether partial or total intestacy Law needs to state what happens to property

What is intestacy? Succession Act 1981 - Part 3, Sch 2 Letters of administration  Administrator – powers and duties necessary to administer deceased estate according to intestacy legislation  UCPR r 610 5.2 Intestacy rules  Succession Act 1981 part 3; schedule 2 - NB: relationship between part 3 and sch 2 - S 35(1) – distribution of residuary estate on intestacy in accordance with schedule 2 

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Schedule 2 – rules - Part 1 – spouse (ie deal with spouse/s; spouse and issue) - Part 2 – no spouse Subject to part 4 - family provision (s 34(3)) NB: must survive intestate by 30 days (s 35(2))

Definitions  Certain terms defined for purposes of intestacy rules S 5 – intestate - ‘means a person who dies and either does not leave a will, or leaves a will but does not dispose effectively by will of the whole or part of his or her property’ S 34(1) – residuary estate - ‘(a) In the case of an intestate who leaves a will - the property of the intestate that is not effectively disposed of by the will; or (b) or in any other case - the property of the intestate, which is available for distribution after payment thereout of all such debts as are properly payable thereout’ u S 5AA – spouse u S 5AA(1) – definition of spouse u Husband or wife u De facto partner (AIA s 32DA)

u Civil partner (AIA sch 1) u S 5AA(2) – relevant time u On the deceased’s death u Person was deceased’s husband or wife u Person was deceased’s de facto partner u Genuine domestic basis; continuous 2 year period u Person was deceased’s civil partner

AIA s 32DA – de facto partner

Spencer v Burton [2015] QCA 104  Is any one criteria more significant than the others?  Sharon and Kent were in a 13 year relationship  They never married and had no children  2009 – Kent had an affair; separated but later reconciled  2010 – Sharon was diagnosed with cancer  06.07.2012 – Sharon died (no will)  14.08.2012 – Kent obtained letters of administration  07.12.2012 – Daphne (Sharon’s mother) said not de facto partners; sought revocation grant and replacement grant in her favour  Held: 1 criterion is no more significant than any of the others in determining if a couple was de facto for the purposes of intestacy. The primary judge had erroneously overemphasised the financial and property aspects of the relationship and the appeal was allowed De Facto partner  No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether 2 persons are living together as a couple on a genuine domestic relationship (s 32DA (3))  Common residence not enough (s 32DA (4))  Gender irrelevant (s 32DA (5)(a))

Pike & Anor v Campbell [2012] QSC 389  Deceased died intestate  Letters of administration were granted to two surviving sisters  Applicant (C) applied to revoke letters of administration claiming priority under UCPR r 610 as surviving spouse of the deceased  Trial of 3 proceedings 1. Claim to revoke letters of administration 2. Claim by administrators that C deliver up (alleged) estate documents and property 3. Claim by administrators requiring C to transfer house and property  

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Deceased and C never married C claims to be spouse in accordance with S 5AA SA and s 32DA AIA o ‘The relationship was going extremely well and in September 2010 we started making plans to move to Mackay’ Conflicting evidence o ‘considerable body ... that contradicts Ms Campbell’s account’ o Bank and credit card statements not support her claim that she visited deceased or vice versa o ‘Brief rebound liaison’ with Mr Johnson o Phone records

North J – several issues:  Were the deceased and C de facto partners?  Had they lived together in a genuine domestic relationship?  Necessarily involves consideration of circumstances  Had they lived together on a continuous basis for at least 2 years ending on the date of the deceased’s death? Contradictory evidence – dates of relationship  Bank account, credit card and phone records  Relationship with Mr Johnson  Evidence from other witnesses re how couple presented the ‘relationship’ HELD: no de facto relationship WPA v MLX [2011] QSC 315  Ms B died in a motor vehicle accident on 30/06/09  2 children born 2003 and 2004  Applicant is the father of the children  Respondent is Ms B’s mother – obtained grant of letters of administration  Applicant seeks - Declaration that he was Ms B’s de facto partner at the time of her death - Revocation of the grant of letters of administration - That either he or the PT be substituted as administrator and trustee - Alternatively, alleges misconduct in administering the estate 

Threshold issue: whether the applicant was Ms B’s de facto partner for the purpose of the SA and AIA

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Mullins J - Looked at case law - Party who asserts de facto relationship bears onus - Relationship June 2001 – 30 June 2009 o With periods of separation - Sexual relationship when parties stayed in same residence - November 2004 – separate finances and Ms B solely rented properties - Degree of commitment to a shared life was affected by the applicant’s medical and associated personal problems

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Effect of separation – ‘must be judged objectively by the parties’ conduct at the time of separation in the context of their relationship’ Subsequent reconciliation – not necessarily mean that the separation was not intended by at least 1 person to be permanent - But repeated pattern of separation and reconciliation might affect how view separation Applicant failed to show lived with Ms B as a couple on a genuine domestic basis within the meaning of s 32DA AIA for a continuous period of 2 years ending on Ms B’s death

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Definitions (Cont): u Issue u Lineal descendants u Adopted child – s 5 u Children en ventre sa mere – s 5A u ‘In the process of gestation’ at the date of death u Born alive and survive for 30 days, take equally with other issue u Eatts v Gundy [2014] QCA 309

Household Chattels:

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all furniture, curtains, drapes, carpets, linen, china, glassware, ornaments, domestic appliances and utensils, garden appliances, utensils and effects and other chattels of ordinary household use or decoration, liquors, wines, consumable stores and domestic animals owned by the intestate immediately before the intestate’s death (s 34A(1)) NOT include: ‘a motor vehicle, boat, aircraft, racing animal, original painting, or other original work of art, trophy, clothing, jewellery, or other chattel of a personal nature’ (s 34A(2)) When a thing is considered to be owned by the intestate – s 34A(3)

Schedule 2, Part 1 – intestate survived by spouse Circumstance 1 – spouse, no issue: 1. Only 1 surviving spouse = spouse takes whole of residuary estate 2. More than 1 surviving spouse = whole of residuary estate in accordance with s 36 S 36 – More than one spouse  Eg spouse and de facto spouse  No change in total entitlement of spouse when issue (not delay distribution to any issue)  3 options 1. Distribution agreement 2. Distribution order 3. Equal shares as decided by the personal representative (PR) Distribution Agreement  Section 36(1)(a)  Written agreement between spouses  Distribute entitlement between themselves Distribution Order:  Sections 36(1)(b); 36(5)-(10)  Intestate’s spouse or PR apply - Not if distribution agreement or distribution under s 36(1)(c)  What court considers just and equitable  No assumption of equal distribution as starting point or otherwise  Court can order entitlement be distributed to one spouse only (if just and equitable)  Court may impose conditions

PR = Personal Representative

Sch 2, Part 1 – spouse and issue u Circumstance 2 – intestate survived by spouse and issue u Item 1: only 1 surviving spouse u Spouse gets first $150k + household chattels u Where 1 child (or issue of that child) spouse gets ½ remainder and issue other ½ u Where more than 1 child, spouse gets 1/3 remainder and issue other 2/3

u Item 2: more than 1 surviving spouse u Spouses share (pursuant to s 36) $150k + household chattels u Where 1 child (or issue of that child) spouse gets ½ remainder and issue other ½ u Where more than 1 child, spouse gets 1/3 remainder and issue other 2/3 u Item 3: issue entitled to the balance of the residuary estate in accordance with s 36A Election by spouse – shared home u Surviving spouse certain rights to elect to acquire the intestate’s interest in a shared home (ss 39A-D) u Shared home: building, or part of a building, designed to be used solely or principally as a separate residence for 1 family or person (s 34B(1)) u See s 34B for ‘related’ definitions u Interest not disposed of by will and spouse ordinarily resided in shared home at time of intestate’s death (s 39A(1)(a)-(b)) u Elect to acquire intestate’s interest in shared home at transfer value subject to s 39B (s 39A(2)) u Written notice to PR (ss 39A(2), 39A(4)(a)) u Other PR(s) if spouse is one of (s 39A(4)(b)) u Registrar of the court if spouse is only PR (s 39A(4)(c))

u Occur within 3 months of notice by PR that election to be made (3 months of appointment if spouse is only PR) (s 39A(3)) u May request valuation of intestate’s interest and PR must promptly comply (s 39A(5)-(6)) u Election can only be revoked with PR’s written consent (s 39A(7)) Restriction on right to elect to acquire shared home (s 39B) u S 39B(1)(a)-(d) when shared home u Part of building when estate includes interest in whole building u Part of registered or registrable interest in land estate includes interest in whole of the interest, or, part or all of the land is used for agricultural purposes u Part of building used as a hotel, motel, boarding house, hostel at intestate’s DOD u Part of the shared home used for purposes other than domestic purposes at intestate’s DOD u Need leave of court to make election (s 39B(2)) u Not substantially diminish value or make disposal substantially more difficult (s 39B(5)) Acquisition and disposal of shared home u Acquisition of shared home under election (s 39C) u Stamped at spouse’s (resident) expense u Not entitled to discharge of any mortgage, charge, encumbrance or lien over intestate’s share u Set off money from estate against amount of transfer value u Can make election even if spouse is PR u PR not to dispose of intestate’s interest in shared home pending election or if election made (s 39D) u Not prevent sale as a last resort to meet liability of intestate (s 39D(3)) Schedule 2, Part 2 – no ‘spouse’  Intestate not survived by any spouse  Circumstance 1 – issue take in accordance with s 36A  Circ 2 – no issue, parent(s) take and if both in equal shares  Circ 3 – no issue, no parents, next of kin take (see s 37)  Circ 4 – no issue, no parents, no next of kin, Crown takes (bona vacantia) How surviving issue take  Surviving children take in equal shares (if more than 1)  Surviving issue take per stirpes (s 36A) - Cf mixed per stirpes/per capita distribution which operated from 01/01/198230/04/1998 inclusive  Issue of any child not surviving taken by representation

S 36A (1) In this section— survive means survive the intestate. [note s 35(2)] (2) If an intestate’s issue are entitled to the whole or a part of the intestate’s residuary estate, the entitlement is to be distributed among the issue as set out in this section (3) If the intestate had only 1 child and the child survived, the child takes. (4) If the intestate had 2 or more children, all of whom survived, the children take in equal shares. (5) If the intestate had 2 or more children, of whom some survived and the remainder did not survive and did not leave surviving issue, the surviving children take in equal shares. (6) If subsections (3) to (5) do not apply, the entitlement is divided into as many equal shares as the intestate had children who survived or who did not survive but left surviving issue. (7) The equal shares are then taken as follows— (a) the intestate’s surviving children (if any) take 1 share each; (b) for each child of the intestate who did not survive but left surviving issue—1 share is taken by representation by the child’s surviving issue.

Explained: Child 1-4 all take a quarter - THEREFORE, EACH OF THEIR KIDS TAKE A HALF OF A QUARTER (AN EIGHTH)

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Don’t worry about Child 4 The estate will be divided into 3 portions (Child 1-3) Child 1 still alive so GC 1-2 miss out Child 3 takes Child 2’s third will go to GC 3 because they predeceased

Schedule 2, Part 2, Circumstance 2 – parents u No spouse, no issue, parent(s) take u Either or both, parents take as shall survive u If more than one, in equal shares u Entire estate u To the exclusion of all other kin Schedule 2, Part 2, Circumstance 3 - next of kin u No spouse, no issue, no parents, next of kin take u S 35(1A)(a)-(e) u Brothers and sisters of the intestate; u Grandparents of the intestate; u Brothers and sisters of a parent of the intestate (uncles and aunts); u Children of any brothers or sisters of an intestate who predecease the intestate (nephews and nieces); and u Children of any brothers or sisters of a parent of an intestate who predecease the intestate (first cousins) u Immaterial whether relationship is whole or half-blood (s 34(2)) Next of kin – order for taking (s 37)  S 37(1)(a) - intestate’s brothers and sisters (equal shares) - If predeceased, their children ie nieces and nephews

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- S 37(2)(a) – per stirpes S 37(1)(b) – grandparents (more than 1, equal shares) S 37(1)(c) - uncles and aunts (equal shares) - If predeceased, their children ie 1st cousins - S 37(2)(b) - per stirpes

Schedule 2, Part 2, Circumstance 4 - crown  No spouse, no issue, no parents, no next of kin  Bona vacantia (ownerless goods) - Therefore, Crown takes Assets in other jurisdictions:  Estate more than one jurisdiction – governed by at least 2 statutory schemes  Moveable property – law of the deceased person’s domicile (lex domicilli)  Immoveable property – law of the place the immoveable property is situated (lex situs)...