A recent Supreme Court case has highlighted the importance of proper estate planning and the financial cost to your estate, and therefore your loved ones, if you do not have your affairs in order.

In Jee v Jee [2010] QSC 485 an estate of approx $2.4m was reduced by over $1.2m in legal fees after a court battle lasting more than twelve years.

Background

The deceased died 8 August 1998.

Initially there was a challenge to the validity of the Will. The costs of the solemn form proceeding alone amounted to nearly $1m, all of which were paid out of the estate.

The latest litigation involved a family provision application by one of the deceased’s eight children.

The deceased spoke Chinese and Pidgin; she was unable to communicate sufficiently in English and relied on her daughter, the Applicant to translate for her when she visited her doctor or solicitor. The deceased owned a property which she lived in with the Applicant (and whilst they were young the applicant’s two sons). The Applicant did the deceased’s shopping and banking and cared for her solely for the ten years leading up to her death.

The applicant only received 1/11 of the residue of her estate, worth less than $100,000. After a two day hearing involving three separately represented parties, it was ordered that the Applicant, who had no assets and her only source of income is a distribution she receives from the family trust, should receive the family home in which she lived with the deceased, together with an additional $170,000 to get the house into a livable condition (it was extremely run down).

The Applicant had been unable to build an independent life for herself, like her siblings, due to the commitment she had to caring for her mother. The deceased supported the Applicant by providing her household and living expenses and her sons school fees and uniforms. The Applicant suffers from depression, back problems, osteoarthritis, vascular problems, asthma, incontinence and high blood pressure, evidence from her doctor shows that often when the deceased was ill the Applicant would put her own health needs aside to care for the deceased.

Justice Mullins found that a distribution of 1/11th of the residuary estate was not sufficient. Her Honour found that the deceased should have provided accommodation for the Applicant and support in relation to her debts and future expenses.

Costs

The estate’s costs of approximately $62,000 came out of the estate.

The Applicant’s costs of approximately $100,000 will almost no doubt also come out of the estate. There is a costs argument, set down for March, in which it will be argued whether the Applicant’s brother’s costs, estimated at $98,000, will be paid from the estate. That remains to be seen.

What can you do?

To avoid a situation such as this in relation to your estate it is important to ensure that you receive proper estate planning advice. There are things that can be done to minimise or eliminate the risk of claims being brought against your estate after you pass.