OPINION: Claw-back claim outside limitation period

ROBERT marries his second wife, Jane and they purchase a home together.

They purchase the home as joint tenants.

Robert makes a will, granting Jane the right to reside in the property for life with further provisions to the effect that upon her passing, his half of the home is gifted to his daughter from a previous relationship, Mary.

Several years pass and when Robert dies at the age of 63 years, Mary obtains legal advice in relation to her entitlements in her father’s estate.

It is revealed that apart from the jointly owned home, Robert has no other significant assets.

Mary is advised because the property was owned as joint tenants, Jane is entitled to the whole of the property by way of “survivorship” and that the provisions of the will, that relate to the home, have no effect.

Jane sells the property and uses the proceeds to fund a nursing home bond.

More than two years pass before Mary commences action, seeking provision from her late father’s estate.

The claim is subject to a limitation period, expiring 12 months after Robert’s death.

If Mary’s action is to be heard “out of time” she must establish “sufficient cause”.

The Court rules that Mary was unable to offer a satisfactory explanation regarding the lengthy delay in making her application.

The Court notes that Mary obtained legal advice shortly after her father’s death and that in the circumstances, she had failed to establish sufficient cause for the Court to extend the limitation period.

The Court rules, that regardless, it would not be willing to exercise its discretion to “claw back” the proceeds of sale of the home on the basis that the funds had now been used to acquire a nursing home bond for Jane’s benefit.

This case demonstrates the importance of proper estate planning and the importance of acting on legal advice in relation to potential claims against an estate, early.

Email Manny Wood, Principal Solicitor and Accredited Specialist in Wills and Estates at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

This column is only accurate at today’s date and is not legal advice.

By Manny WOOD, Solicitor

Leave a Reply