Family conversations about your estate plan are just as important as the plan itself. In fact not holding them, can lead to catastrophic results, as was the case for the Bassett family.
The Facts
Bill and Jill Bassett were farmers who conducted their farming business across a series of rural properties. Of their four children, Geoff Bassett was the only child to work alongside his parents in that faming business.
In 1984, a rural property, known as “The Springs”, was jointly purchased by Bill and Jill (who owned half) and by Geoff (who owned the other half).
In 1998, another nearby property, known as “Pindaroi” was effectively gifted to Geoff and his wife by his parents and was described by their family as Geoff’s “early inheritance”. Geoff sold Pindaroi in 2009 for $4,200,000. After the property was “gifted” to Geoff, Bill and Jill made new mirror wills which no longer included a gift to Geoff. Bill and Jill told their other three children that “the remainder of the estate [is] to be divided equally to the rest of you”.
Jill died first and then Bill died. After Jill died, Bill had continued to own “The Springs” property in a 50/50 joint tenancy with Geoff.
Under Bill’s will, Geoff was left the farming equipment and machinery but not Bill’s 50% of The Springs.
Believing he ought to receive Bill’s 50%, Geoff made a claim for further provision from Bill’s estate even though the value of Geoff’s net assets was then $2,924,240.
Geoff’s Family Provision Claim
At trial, Geoff succeeded in his claim, so Geoff’s siblings appealed that decision.
The New South Wales Court of Appeal (NSWCA) overturned the trial judge’s decision and held that no further provision should be made for Geoff from the estate.
The NSWCA gave significant weight to the deceased’s testamentary intentions and the “early inheritance” he had received in 1998.
It had been the continuing intention of Bill and Jill that Geoff would not benefit in any significant way from their respective estates. This was reflected in their wills and the notion that Geoff received an “early inheritance” in the form of the Pindaroi property.
The saddest part about this case, was that even though Geoff’s siblings “won” their appeal, the total costs of all parties by the time the appeal was heard were in the order of $2.5 million to $3 million. This meant that “The Springs” property, which the siblings were arguing over, needed to be sold to pay everyone’s legal costs. In the end no-one “won”.
This is a depressing example in which claims on estates of a deceased parent by adult siblings can be ruinous.
So, what is the lesson?
The Importance of Family Conversations and Agreements
Carefully planning for the transfer of your wealth upon your death is part of your legacy. You don’t want to leave your family in a costly court fight because your estate plan didn’t consider the needs and expectations of your family members. Although the conversations with your family about your estate planning ideas can be uncomfortable, they are critically important. Most people will have heard at least one horror story like this Bassett family case where an epic legal battle follows the death of a family member and ends up destroying families and impacting generations. It is not merely the financial burden of the litigation, usually family relations become embittered, unlikely ever to be repaired. In the Bassett case at least two of the four siblings gave evidence as to the seriously adverse health consequences they had suffered as a result of the proceedings. One also attributed a relationship breakdown to the pressure of the proceedings.
Going to court to argue over estates inevitably leave families broken and often mean that someone’s hard-earned inheritance (such as “The Springs” property) are lost paying huge legal bills.
As lawyers who help families hold these conversations – we can’t help but wonder whether the Bassett family could have been spared the financial and emotional pain, if Jill and Bill had discussed their intentions with Geoff and their other children, and perhaps documented what was to happen more specifically with “The Springs” property when Jill and Bill died.
Traditional succession planning, usually involves preparing a Will and other documents to set out what you want to happen when you die. But often that planning is done in a vacuum of information, guessing at what each beneficiary’s financial and other circumstances might be, and hoping that the plan is perceived as “fair” without asking family members. Family Inclusive estate and succession planning using a process called collaborative practice meaningfully involves your family members in the planning process, helps you hold the important conversations constructively and resolves differences between family members by crafting planning solutions that are understood and accepted by all.
If you don’t want to end up like the Bassett family, and wish to consider a more holistic approach to your family legacy planning, so that your family are spared the heartache and the financial cost of litigation, we can help your family assemble a collaborative practice team who can guide you through a process to prevent future conflict.
