Legal Hypothetical: Real Estate Gift, Public Trustee and Centrelink

 

Real Estate Gift, Public Trustee and Centrelink

WILLIAM lives with his mother, Michelle.

She has a history of mental illness and at the age of 75 years, William also becomes her carer.

William and Michelle visit a solicitor together and ask the solicitor to transfer Michelle’s home into William’s name by way of a gift.

The transfer proceeds and William pays stamp duty on the market value of the property.

Two years later, the New South Wales Trustee & Guardian (Public Trustee) is appointed as Michelle’s financial manager and Michelle moves into an aged care facility.

When the Public Trustee discovers the transfer of Michelle’s property, it commences proceedings against William, seeking orders that the property be transferred back into Michelle’s name.

The Court finds that William was in a position of influence over his mother and that her state of health made her vulnerable.

The Court notes that Michelle did not receive independent legal advice.

The Court declares that the transfer resulted from unconscionable conduct and orders the retransfer of the home back to Michelle.

In addition, the Public Trustee sought compensation from William on the basis that the gifting of the home reduced Michelle’s pension by $150 per fortnight.

The Public Trustee also sought compensation on Michelle’s behalf because when entering the aged care facility, she was unable to pay a refundable accommodation deposit and was therefore charged a daily accommodation payment of $50.

The Court orders that William pay “equitable compensation” to the Public Trustee of $150,000, in addition to the retransfer of the home and the payment of the Public Trustee’s legal costs.

William has insufficient funds to pay the Court ordered compensation and enters voluntary bankruptcy, which normally lasts for three years and one day.

If YOU would like a particular issue addressed, please email Manny at [email protected] or call him on (02) 6648 7487.

 

By Manny WOOD, Solicitor

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