Lessons from the Estate of David John Loy (Deceased)  SASC 140.
The deceased died in 2009 without a will, leaving behind his wife and two daughters.
The deceased’s wife applied for and was granted Letters of Administration to act as the administrator of the estate assets. Pursuant to the laws of intestacy and the provisions of the Administration and Probate Act 1919 (SA) (the Act), the deceased’s spouse was entitled to receive the first $100,000 of his estate in addition to half of the balance. The deceased’s daughters were entitled to receive the remaining half of the estate equally between them.
As the deceased’s daughters were minors at the date of his death section 65 of the Act applied, requiring the administrator to transfer the assets the daughters were entitled to receive from the estate to the Public Trustee to hold as trustee until each of the daughters attained the age of 18 years.
In this case, an application was made to the South Australian Supreme Court pursuant to section 67 of the Act to dispense with the requirement of section 65 and to allow the administrator and her brother to hold the funds on behalf of the daughters rather than the Public Trustee.
Section 67 of the Act allows the Court to dispense with the requirements of section 65 of the Act where it is “beneficial and expedient so to do.”
Justice Stanley considered the following factors in determining whether the interests of the daughters would be adequately protected by their entitlements to the estate being held on trust by the administrator and her brother:
- the length of time that the estate would be held by the trustees until the daughters attained majority
- they are responsible and mature individuals with the required financial experience to preserve the benefit received by the daughters
- they would be in a better position than the Public Trustee to assess how the funds should be applied for the benefit of the daughters towards their maintenance, education, benefit or advancement as required by the Trustee Act 1936 (SA), and
- they will act as trustees without charge while the transfer of property to the Public Trustee would be subject to the payment of commission.
The Court was satisfied that it would be beneficial to the interests of the daughters and expedient that the funds due to them be administered by the administrator and her brother as trustees rather than the Public Trustee.
Comment – This case reflects the importance of having a will prepared, in particular where minor beneficiaries are involved. If the deceased had prepared a will, considerable time and costs associated with the application to the Court would have been avoided. It is also important to note, that the Court will not always determine that it is in the interest of a minor beneficiary to waive the requirement to transfer property to the Public Trustee.