On Monday, the estate of Richard Pratt survived a legal challenge from the cardboard king’s former mistress Madison Ashton, who claims she is owed millions.
Pratt’s billions are but one in a long list of inherited fortunes over which messy legal wars have been fought.
As seen in the recent House of Hancock TV show, death is often followed by a family feud. The fictional show’s main character, real-life Gina Rinehart, has fought many costly court battles with her father’s third wife and her own children over bequeathed wealth.
But vast riches need not be at stake for a fight to break out, as Melbourne-based barrister Lachlan Wraith well knows. Disputes can be as trivial and “insufferable” as a fight over the family bible or the antique clock, he says.
Research by law firm Slater and Gordon has found that one third (34 per cent) of Australians have experienced tension or conflict in their families over the distribution of assets and inheritance under a Will.
“A lot of people simply don’t turn their mind to estate planning with sufficient care,” says Mr Wraith.
As a Will dispute expert, he fights these court battles “constantly”, especially between blended families, and says the most common cause is a lack of planning.
Powers of Attorney
Thanks to medical advances, it is no longer enough to just have a Will, as many Australians can expect their bodies to outlive their full mental faculties.
Granting a power of attorney (POA) is the main way to ensure that your finances are managed carefully in later life.
Sadly, many attorneys misuse this power to access their ‘inheritance’ before the Will-maker dies, sparking a legal fight when the rest of the family finds out, so choose your attorney very carefully, says Mr Wraith.
Leave it to the experts
Now that the POA is out of the way, it’s time to carefully craft a Will. Banish any thought of an off-the-shelf template from your mind, as these are cannon fodder for legal challenges.
“I deal with the problems that arise from poorly written Wills, so it is contrary to my interest to say this, but don’t try to do it yourself,” Mr Wraith warns.
An expert will foresee potential problems and prevent simple mistakes (such as illegible handwriting) and big blunders.
For help finding an expert, contact your state’s law society.
Gift or loan?
If you hand over anything to your children during your lifetime, be very sure to mention this to your Will writer.
Children often “end up at each other’s throats” over these acts of generosity, with one saying the money was a gift, the other a loan.
Either forgive any debts in the Will or make it clear that certain gifts should be deducted from one child’s share.
Think before you cut
Wills expert Andrew Simpson, a lawyer at Maurice Blackburn, says it is a “very dangerous exercise” to cut anyone important – such as a child – out the Will completely.
In some cases, giving a small amount rather than nothing at all could prevent a “very expensive” challenge to the Will, says the author of You Can’t Take It With You.
“The law doesn’t expect the Will maker to treat everybody fairly, so it doesn’t have to be equal, but if you deviate from equality you start to enter dangerous territory,” Mr Simpson says.
To prevent a squabble over the antique clock, be abundantly clear about any valuable or sentimental item, Mr Simpson says.
“You can’t cover every item that you own, but certainly every family has items that are of particular significance.”
Bring photos and a written description of important items so your legal expert can include these in the Will, he says.
Slater and Gordon senior estate planning lawyer Rod Cunich recommends a Will review every three to five years, or after major life events, such as births, marriages, divorces and the sale or buying of a big asset.
“A Will that is up to date and clearly articulates how the wealth and assets are to be divided, and includes communications about why, will help to avoid unnecessary stress or dispute,” Mr Cunich says.