In New South Wales certain people, including a spouse and a child of a deceased person, and a person who had lived with the deceased in a close personal relationship are eligible to make a claim that provision or further provision ought to be made from the estate (or notional estate) of the deceased, for their proper maintenance, education and advancement in life.
If the Court is satisfied that adequate provision has not been made for the applicant in the deceased’s will (or pursuant to the laws of intestacy), it will only make the orders necessary to make adequate provision for the applicant’s needs. The Court’s role is not to rewrite the will to achieve a “fair” disposition of the estate but to only make the orders necessary to make adequate provision for the applicant’s proper maintenance, education and advancement in life.
The Court has the power to order that property which has fallen outside of the estate, either because the deceased or the executor transferred it, or because the deceased omitted to do something which would cause the property to become part of his estate (and full valuable consideration was not given for the act, transfer or omission), constitutes notional estate. It can do so if the act, transaction or omission (the “prescribed transaction”) took place within a maximum period of 3 years from the date of death, if certain other criteria are also met.
Specific examples of transactions which may be caught include failing to direct the proceeds of a life insurance policy to be paid to the estate, failing to direct superannuation or other monies payable to the deceased on death to the estate and entering into a contract providing for the transfer of property, whether before or after the person’s death, without receiving full consideration in return for this.
However, even if such a transaction has occurred, this does not necessarily mean that the Court will declare the affected asset to be notional estate. The court will only declare this asset to be notional estate, if an order for provision in favour of a plaintiff cannot be met from the actual estate and only after other factors are considered and certain other criteria are met.