Being a member of a blended family can create some unique challenges. There are very few families who conform to the “Brady Bunch” dynamic, where six children happily share two bedrooms and one bathroom and every problem is magically resolved within 30 minutes.
With sibling rivalry, competing needs for love and attention, and conflicting emotions being common themes in blended families, it is no surprise that these challenges often escalate when a spouse/parent (natural or step) passes away. In the succession world, without a proper estate plan in place, the transition of wealth in a blended family environment can cause a myriad of problems. The case Re Estate Grant, deceased [2018] NSWSC 1031 is a prime example of this.
Re Estate Grant, deceased
The deceased, David William Grant (“Mr Grant”) died in December 2015, aged 55 years.
Mr Grant had been married twice at the time of his passing. He was married to his first wife, Lisa, from October 1989 to November 2013. Lisa had two children from an earlier relationship, Siegfried and Maximilian whom, for the most part, Mr Grant treated as his own, However, at the time of his passing, he was estranged from Siegfried. Mr Grant and Lisa also had twin sons of their own, Jackson and Lewis.
Mr Grant’s second marriage to Katerina grew out of an extra marital affair which commenced in 2006 and continued until he and his wife Lisa separated in April 2012. Mr Grant and Katerina commenced a de facto relationship in 2012. He proposed to Katerina in June 2015 and they were married shortly after in September 2015.
Less than three months after they married, Mr Grant passed away from brain cancer. Mr Grant and Katerina had no children of their own.
The will
Mr Grant made a will on or about 3 January 2014. The will appointed Mr Grant’s brother Michael to be the executor of his estate and gifted the residue of his estate equally between Maximilian, Jackson and Lewis.
Mr Grant’s main reason for wanting to update his will, was to disinherit Siegfried and Lisa, and he wanted to reinforce their disinheritance with an express repudiation in the will.
The effect of marriage on a will
Section 12 of the Succession Act 2006 (NSW), similarly to section 14 of the Succession Act 1981 (Qld), provides that marriage of a testator (will maker) will revoke the testator’s will unless it is made in contemplation of marriage.
In the event that Mr Grant’s 2014 will was revoked by his marriage to Katerina in 2015, he would be considered to have died intestate (that is without a will) and the beneficiaries of his estate under the rules of intestacy would be:
- his wife, Katerina, who would be entitled to the deceased’s personal effects, a statutory legacy, and one-half of the remainder of the deceased’s estate; and
- Mr Grant’s twin sons Jackson and Lewis, who would be entitled to the other half of the remainder of the estate.
Maximilian would not benefit under the rules of intestacy because he is not a biological child.
Mr Grant’s estate was worth an estimated net value of approximately $4.4 million (not including personal effects) and a superannuation fund with an estimated value of $858,000.00. Under the rules of intestacy set out above, Katerina’s share would be estimated to be approximately, $2.4 million and Jackson and Lewis’ shares were estimated to be approximately $990,000.00 each.
Competing claims
There were two competing claims brought before the court:
- Katerina claimed that the 2014 will was not made in contemplation of marriage and therefore their marriage in 2015 revoked the will and the rules of intestacy applied. Katerina also made a family provision claim to be considered in the event that the court determined that the 2014 will was in fact valid.
- Jackson, Lewis and Maximilian claimed that the will was made in contemplation of marriage, and requested that the court uphold the will as valid, so that they would receive their equal shares in the estate. Maximilian also made a family provision claim to be considered in the event that the court determined that the will was invalid.
Was the will made in contemplation of marriage?
The primary issue for the court to determine was whether the 2014 will was made in contemplation of marriage.
Maximilian, with the support of Jackson and Lewis, relied upon the following facts (and various others) in support of his contention that the 2014 will was made “in contemplation of marriage” to Katerina:
- Mr Grant and Katerina began their relationship as early as 2006, several years before the deceased gave instructions for the preparation of his will.
- When Mr Grant and Lisa first discussed separation in about 2010, Mr Grant started to discuss “long term plans” with Katerina, during which discussions on many occasions he told Katerina that he was going to marry her “one day”.
- When Mr Grant made such statements to Katerina in or about 2010, Katerina responded to the effect that she was willing to discuss marriage with him if and when he was in a position to marry her; meaning, that he first had to separate from Lisa, divorce Lisa and then ask Katerina to accept a marriage proposal.
- Via an exchange of text messages on 2 January 2011, Mr Grant sent Katerina a message to the effect “marry me”, to which she replied to the effect, “I will when you ask me properly one day”.
- In April 2012 Mr Grant and Lisa formally, and finally, separated, and Mr Grant and Katerina commenced their de facto relationship.
- At that time Mr Grant had a will that left his estate to Lisa and, if she predeceased him, favoured their four children (including Siegfried).
- In early 2013, on his own initiative, Mr Grant consulted a fertility clinic about reversal of a vasectomy procedure to which he had previously submitted.
- At about the same time, at the instigation of Mr Grant, Katerina also attended the fertility clinic to ascertain whether, if Mr Grant’s vasectomy were to be reversed, there was a prospect that she might conceive a child.
- On 26 October 2013, Mr Grant and Katerina attended the auction at which a property at McMahon’s Point was purchased in Mr Grant’s name (with a financial contribution by Katerina), an experience which she described in her evidence as a shared moment that signified the solidification of their future together.
- On 5 November 2013 the marriage between Mr Grant and Lisa ended in a divorce, preceded by a property settlement.
- In 2013 and 2014 (including on occasions before the McMahon’s Point property was purchased) discussions of marriage between the Mr Grant and Katerina took the form of “when we marry”, not “if we marry”.
Katerina argued that:
- The deceased did not make a formal proposal of marriage to Katerina until 6 June 2015.
- At no time before then, and particularly at no time in the early discussions of 2010, did Katerina commit herself to marriage in advance of a proposal capable of acceptance.
- In the 2010 discussions, Katerina said no more than that she was prepared to discuss marriage with Mr Grant if and when he was able to make, and he did make, a proposal of marriage capable of acceptance.
- At the time he executed his will on 3 January 2014, Mr Grant did not have in contemplation marriage to Katerina, only freeing himself from his marriage to Lisa.
- The will was prepared in haste and, after procrastination on the part of Mr Grant, executed in haste as a “stop gap” will to be reviewed at leisure later at an unspecified time.
The decision
The court concluded that at the time Mr Grant made his will he was living a compartmentalised life, a life in transition. When the will was drafted, he was in the process of divorcing his first wife. By the time he executed it, he had divorced her. He had made no commitment to marry Katerina and Katerina had made no commitment to marry him, if ever he were to propose. Both were free agents, free to marry somebody else, or not to marry at all.
The court noted that although Mr Grant and Katerina had an on-again/off-again relationship over an eight year period, including a period of cohabitation in 2011, they were not cohabiting full time. Their relationship was a work-in-progress. Although marriage was from time to time discussed it remained a matter of speculation until such time as Mr Grant might bring himself to propose marriage, at which time Katerina (however hopeful she might have been) reserved a right of refusal.
Mr Grant was focused upon extricating himself from a spent marriage (severing all connection with his wife, but maintaining relationships with favoured children of that marriage), unconcerned with any prospective marriage or family obligations arising from such marriage.
The court concluded that Mr Grant’s will was not made in contemplation of his marriage to Katerina and accordingly it was revoked by and upon his marriage to Katerina being solemised. Therefore Mr Grant was declared to have died intestate with his estate to be administered pursuant to the rules of intestacy subject to any family provision order made in favour of Maximilian.
Conclusion
This case highlights the complexities of blended families in the context of estate planning. Estate planning is more than just drafting a will. The preparation of an estate plan involves a review of the state of your personal, family and business affairs with a view to determining how you want your assets to be dealt with after you pass away. Further, an estate plan should be reviewed regularly or, at the very least, in the event of any significant life changes, like marriage or divorce. Seeking advice from an experienced wills and estate lawyer from the outset and reviewing your estate plan regularly is crucial to ensuring that your wishes are carried out and your family is not left in disarray.