Part 3.3Notional estate
orders
Note—
This Part applies where, as a result of certain
property transactions, property is not included in the estate of a deceased
person or where property has been distributed from the estate of a deceased
person. This Part enables the Court in limited circumstances to make an order
designating property that is not included in the estate, or has been
distributed from the estate, as “notional estate” of the deceased
person for the purpose of making a family provision order under Part 3.2 in
respect of the estate of the deceased person (or for the purpose of ordering
that costs in the proceedings be paid from the notional
estate).
Property may be designated as notional estate if
it is property held by, or on trust for, a person by whom property became held
(whether or not as trustee), or the object of a trust for which property
became held on trust:
(a)
as a result of a distribution from the estate of
a deceased person (see section 79), whether or not the property was the
subject of the distribution, or
(b)
as a result of a relevant property transaction,
whether or not the property was the subject of the transaction (see section
80), or
(c)
as a result of a relevant property transaction
entered into by a person by whom property became held, or for whom property
became held on trust, as a result of a relevant property transaction or a
distribution from the estate of a deceased person (see section 81), whether or
not the property was the subject of the relevant property
transaction.
Property may also be designated as notional
estate if it is property:
(a)
held by the legal representative of the estate of
a person by whom property became held as a result of a relevant property
transaction or distribution referred to in paragraphs (a)–(c) above and
who has since died (known as the deceased
transferee), or
(b)
held by, or on trust for, a person by whom
property became held, or for the object of a trust for which property became
held on trust, as a result of a distribution from the estate of a deceased
transferee,
whether or not the property was the subject of the
relevant property transaction or the distribution from the estate of the
deceased person or the deceased transferee (see section 82).
Section 92 enables the Court to replace property
in the estate or notional estate of a deceased person that has been, or is
proposed to be, affected by a family provision order with property offered in
substitution for the affected property.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
Division 1Relevant property
transactions
74Definition
In this Part:
relevant
property transaction means a transaction or circumstance
affecting property and described in section 75 or 76.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
75Transactions that are relevant
property transactions
(cf FPA 22 (1), (3) and (7))
(1)
A person enters into a relevant property
transaction if the person does, directly or indirectly, or does not do, any
act that (immediately or at some later time) results in property being:
(a)
held by another person (whether or not as
trustee), or
(b)
subject to a trust,
and full valuable consideration is not given to the
person for doing or not doing the act.
(2)
The fact that a person has entered into a
relevant property transaction affecting property does not prevent the person
from being taken to have entered into another relevant property transaction if
the person subsequently does, or does not do, an act affecting the same
property the subject of the first transaction.
(3)
The making of a will by a person, or the omission
of a person to make a will, does not constitute an act or omission for the
purposes of subsection (1), except in so far as it constitutes a failure to
exercise a power of appointment or disposition in relation to property that is
not in the person’s estate.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
76Examples of relevant property
transactions
(cf FPA 22 (4))
(1)
The circumstances set out in subsection (2),
subject to full valuable consideration not being given, constitute the basis
of a relevant property transaction for the purposes of section
75.
(2)
The circumstances are as follows:
(a)
if a person is entitled to exercise a power to
appoint, or dispose of, property that is not in the person’s estate and
does not exercise that power before ceasing (because of death or the
occurrence of any other event) to be entitled to do so, with the result that
the property becomes held by another person (whether or not as trustee) or
subject to a trust or another person (immediately or at some later time)
becomes, or continues to be, entitled to exercise the
power,
(b)
if a person holds an interest in property as a
joint tenant and the person does not sever that interest before ceasing
(because of death or the occurrence of any other event) to be entitled to do
so, with the result that, on the person’s death, the property becomes,
by operation of the right of survivorship, held by another person (whether or
not as trustee) or subject to a trust,
(c)
if a person holds an interest in property in
which another interest is held by another person (whether or not as trustee)
or is subject to a trust, and the person is entitled to exercise a power to
extinguish the other interest in the property and the power is not exercised
before the person ceases (because of death or the occurrence of any other
event) to be so entitled with the result that the other interest in the
property continues to be so held or subject to the trust,
(d)
if a person is entitled, in relation to a life
assurance policy on the person’s life under which money is payable on
the person’s death or if some other event occurs to a person other than
the legal representative of the person’s estate, to exercise a
power:
(i)
to substitute a person or a trust for the person
to whom, or trust subject to which, money is payable under the policy,
or
(ii)
to surrender or otherwise deal with the
policy,
and the person does not exercise that power before
ceasing (because of death or the occurrence of any other event) to be entitled
to do so,
(e)
if a person who is a member of, or a participant
in, a body (corporate or unincorporate), association, scheme, fund or plan,
dies and property (immediately or at some later time) becomes held by another
person (whether or not as trustee) or subject to a trust because of the
person’s membership or participation and the person’s death or the
occurrence of any other event,
(f)
if a person enters into a contract disposing of
property out of the person’s estate, whether or not the disposition is
to take effect before, on or after the person’s death or under the
person’s will or otherwise.
(3)
Nothing in this section prevents any other act or
omission from constituting the basis of a relevant property transaction for
the purposes of section 75.
(4)
For the purposes of this Chapter, in the
circumstances described in subsection (2) (b), a person is not given full or
any valuable consideration for not severing an interest in property held as a
joint tenant merely because, by not severing that interest, the person
retains, until his or her death, the benefit of the right of survivorship in
respect of that property.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
77When relevant property
transactions take effect
(cf FPA 22 (2), (5) and (6))
(1)
For the purposes of this Chapter, a relevant
property transaction is taken to have effect when the property concerned
becomes held by another person or subject to a trust or as otherwise provided
by this section.
(2)
A relevant property transaction consisting of
circumstances described in section 76 (2) (a), (c) or (d) is taken to have
been entered into immediately before, and to take effect on, the
person’s death or the occurrence of the other event resulting in the
person no longer being entitled to exercise the relevant
power.
(3)
A relevant property transaction consisting of
circumstances described in section 76 (2) (b) or (e) is taken to have been
entered into immediately before, and to take effect on, the person’s
death or the occurrence of the other event referred to in those
paragraphs.
(4)
A relevant property transaction that involves any
kind of contract for which valuable consideration, though not full valuable
consideration, is given for the person to enter into the transaction is taken
to be entered into and take effect when the contract is entered
into.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
Division 2When notional estate orders
may be made
78Notional estate order may be
made only if family provision order or certain costs orders to be
made
(1)
The Court may make an order designating property
as notional estate only:
(a)
for the purposes of a family provision order to
be made under Part 3.2, or
(b)
for the purposes of an order that the whole or
part of the costs of proceedings in relation to the estate or notional estate
of a deceased person be paid from the notional estate of the deceased
person.
Note—
Section 63 (5) enables a family provision order
to be made in relation to property designated as notional estate of a deceased
person.
Section 99 enables the Court to order that costs
be paid out of the notional estate of a deceased person.
(2)
The Court must not make an order under subsection
(1) (b) for the purposes of an order that the whole or part of an
applicant’s costs be paid from the notional estate of the deceased
person unless the Court makes or has made a family provision order in favour
of the applicant.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
79Notional estate order may be
made where property of estate distributed
(cf FPA 24)
The Court may, on application by an applicant for
a family provision order or on its own motion, make a notional estate order
designating property specified in the order as notional estate of a deceased
person if the Court is satisfied that on, or as a result of, a distribution of
the deceased person’s estate, property (whether or not the subject of
the distribution) became held by a person (whether or not as trustee) or
subject to a trust.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
80Notional estate order may be
made where estate affected by relevant property
transaction
(cf FPA 23)
(1)
The Court may, on application by an applicant for
a family provision order or on its own motion, make a notional estate order
designating property specified in the order as notional estate of a deceased
person if the Court is satisfied that the deceased person entered into a
relevant property transaction before his or her death and that the transaction
is a transaction to which this section applies.
Note—
The kinds of transactions that constitute
relevant property transactions are set out in sections 75 and
76.
(2)
This section applies to the following relevant
property transactions:
(a)
a transaction that took effect within 3 years
before the date of the death of the deceased person and was entered into with
the intention, wholly or partly, of denying or limiting provision being made
out of the estate of the deceased person for the maintenance, education or
advancement in life of any person who is entitled to apply for a family
provision order,
(b)
a transaction that took effect within one year
before the date of the death of the deceased person and was entered into when
the deceased person had a moral obligation to make adequate provision, by will
or otherwise, for the proper maintenance, education or advancement in life of
any person who is entitled to apply for a family provision order which was
substantially greater than any moral obligation of the deceased person to
enter into the transaction,
(c)
a transaction that took effect or is to take
effect on or after the deceased person’s
death.
(3)
Property may be designated as notional estate by
a notional estate order under this section if it is property that is held by,
or on trust for:
(a)
a person by whom property became held (whether or
not as trustee) as the result of a relevant property transaction,
or
(b)
the object of a trust for which property became
held on trust as the result of a relevant property
transaction,
whether or not the property was the subject of the
relevant property transaction.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
81Notional estate order may be
made where estate affected by subsequent relevant property
transaction
(cf FPA 25)
(1)
The Court may, on application by an applicant for
a family provision order or on its own motion, make a notional estate order
designating property specified in the order as notional estate of a deceased
person if the Court is satisfied that:
(a)
it:
(i)
has power, under this or any other section of
this Chapter, to make a notional estate order designating property held by, or
on trust for, a person (the
transferee) as notional estate of the deceased person,
or
(ii)
immediately before the date of the death of a
person (the
deceased transferee), had power, under this or any other
section of this Chapter, to make a notional estate order designating property
held by, or on trust for, the deceased transferee as notional estate of the
deceased person, and
(b)
since the relevant property transaction or
distribution that gave rise to the power to make the order was entered into or
made, the transferee, or the deceased transferee, entered into a relevant
property transaction, and
(c)
there are special circumstances that warrant the
making of the order.
(2)
Property may be designated as notional estate by
a notional estate order under this section if it is property that is held by,
or on trust for:
(a)
a person by whom property became held (whether or
not as trustee) as the result of the relevant property transaction entered
into by the transferee or the deceased transferee, or
(b)
the object of a trust for which property became
held on trust as the result of the relevant property transaction entered into
by the transferee or the deceased transferee,
whether or not the property was the subject of the
relevant property transaction.
(3)
A notional estate order may be made under this
section instead of or in addition to an order under section 79, 80 or
82.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
82Notional estate order may be
made where property of deceased transferee’s estate held by legal
representative or distributed
(1)
The Court may, on application by an applicant for
a family provision order or on its own motion, make a notional estate order
designating property specified in the order as notional estate of a deceased
person if the Court is satisfied that:
(a)
immediately before the date of the death of a
person (the
deceased transferee), it had power, under this or any other
section of this Chapter, to make a notional estate order designating property
held by, or on trust for, the deceased transferee as notional estate of the
deceased person, and
(b)
the power did not arise because property became
held by the deceased transferee as trustee only, and
(c)
in the case of property referred to in subsection
(2) (b), there are special circumstances that warrant the making of the
order.
(2)
The following property may be designated as
notional estate by a notional estate order under this section, whether or not
it was the property the subject of the relevant property transaction or
distribution from which the Court’s power to make such an order
arose:
(a)
if administration has been granted in respect of
the estate of the deceased transferee—property that is held by the legal
representative of the estate of the deceased transferee in his or her capacity
as legal representative of the estate of the deceased
transferee,
(b)
if all or part of the estate of the deceased
transferee has been distributed—property that is held by, or on trust
for:
(i)
a person by whom property became held (whether or
not as trustee) as the result of the distribution of the deceased
transferee’s estate, or
(ii)
the object of a trust for which property became
held on trust as the result of the distribution of the deceased
transferee’s estate.
(3)
A notional estate order may be made under this
section instead of or in addition to an order under section 79, 80 or
81.
Note—
Administration of the estate of a deceased
transferee may be granted for the purposes of being able to designate property
as notional estate under this section (see section 91).
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
83Disadvantage and other matters
required before order can be made
(cf FPA 26)
(1)
The Court must not, merely because a relevant
property transaction has been entered into, make an order under section 80, 81
or 82 unless the Court is satisfied that the relevant property transaction or
the holding of property resulting from the relevant property
transaction:
(a)
directly or indirectly disadvantaged the estate
of the principal party to the transaction or a person entitled to apply for a
family provision order from the estate or, if the deceased person was not the
principal party to the transaction, the deceased person (whether before, on or
after death), or
(b)
involved the exercise by the principal party to
the transaction or any other person (whether alone or jointly or severally
with any other person) of a right, a discretion or a power of appointment,
disposition, nomination or direction that, if not exercised, could have
resulted in a benefit to the estate of the principal party to the transaction
or a person entitled to apply for a family provision order from the estate or,
if the deceased person was not the principal party to the transaction, the
deceased person (whether before, on or after death), or
(c)
involved the exercise by the principal party to
the transaction or any other person (whether alone or jointly or severally
with any other person) of a right, a discretion or a power of appointment,
disposition, nomination or direction that could, when the relevant property
transaction was entered into or at a later time, have been exercised so as to
result in a benefit to the estate of the principal party to the transaction or
a person entitled to apply for a family provision order from the estate or, if
the deceased person was not the principal party to the transaction, the
deceased person (whether before, on or after death), or
(d)
involved an omission to exercise a right, a
discretion or a power of appointment, disposition, nomination or direction
that could, when the relevant property transaction was entered into or at a
later time, have been exercised by the principal party to the transaction or
any other person (whether alone or jointly or severally with any other person)
so as to result in a benefit to the estate of the principal party to the
transaction or a person entitled to apply for a family provision order from
the estate or, if the deceased person was not the principal party to the
transaction, the deceased person (whether before, on or after
death).
(2)
In this section:
principal
party to the transaction, in relation to a relevant property
transaction, means the person who, under section 75 or 76, enters into the
relevant property transaction.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
84Effect of notional estate
order
(cf FPA 29)
A person’s rights are extinguished to the
extent that they are affected by a notional estate order.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
85More than one notional estate
order may be made
(cf FPA 28 (3))
The Court may make one or more notional estate
orders in connection with the same proceedings for a family provision order,
or any subsequent proceedings relating to the estate of the same deceased
person.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
86Power subject to Division
3
The Court’s power to make a notional estate
order under this Division is subject to Division 3.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
Division 3Restrictions and protections
relating to notional estate orders
87General matters that must be
considered by Court
(cf FPA 27 (1))
The Court must not make a notional estate order
unless it has considered the following:
(a)
the importance of not interfering with reasonable
expectations in relation to property,
(b)
the substantial justice and merits involved in
making or refusing to make the order,
(c)
any other matter it considers relevant in the
circumstances.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
88Estate must not be sufficient
for provision or order as to costs
(cf FPA 28 (1))
The Court must not make a notional estate order
unless it is satisfied that:
(a)
the deceased person left no estate,
or
(b)
the deceased person’s estate is
insufficient for the making of the family provision order, or any order as to
costs, that the Court is of the opinion should be made, or
(c)
provision should not be made wholly out of the
deceased person’s estate because there are other persons entitled to
apply for family provision orders or because there are special
circumstances.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
89Determination of property to
be subject to notional estate order
(cf FPA 27 (2), 28 (2) and
(4))
(1)
In determining what property should be designated
as notional estate of a deceased person, the Court must have regard to the
following:
(a)
the value and nature of any property:
(i)
the subject of a relevant property transaction,
or
(ii)
the subject of a distribution from the estate of
the deceased person or from the estate of a deceased transferee,
or
(iii)
held by the legal representative of the estate of
any deceased transferee in his or her capacity as legal representative of the
estate of the deceased transferee,
(b)
the value and nature of any consideration given
in a relevant property transaction,
(c)
any changes in the value of property of the same
nature as the property referred to in paragraph (a), or the consideration
referred to in paragraph (b), in the time since the relevant property
transaction was entered into, the distribution was made, the property became
held by the legal representative of the estate of the deceased transferee or
the consideration was given,
(d)
whether property of the same nature as the
property referred to in paragraph (a), or the consideration referred to in
paragraph (b), could have been used to obtain income in the time since the
relevant property transaction was entered into, the distribution was made, the
property became held by the legal representative of the estate of the deceased
transferee or the consideration was given,
(e)
any other matter it considers relevant in the
circumstances.
(2)
The Court must not designate as notional estate
property that exceeds that necessary, in the Court’s opinion, to allow
the provision that should be made, or, if the Court makes an order that costs
be paid from the notional estate under section 99, to allow costs to be paid
as ordered, or both.
(3)
If, as a result of a relevant property
transaction or of a distribution from the estate of a deceased person or from
the estate of a deceased transferee, property becomes held by a person as a
trustee only, the Court must not designate as notional estate any property
held by the person other than the property held by the person as a trustee as
a consequence of any such relevant property transaction or
distribution.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].
90Restrictions on out of time or
additional applications
(cf FPA 28 (5))
(1)
This section applies to proceedings where:
(a)
an application for a family provision order is
made later than 12 months after the date of the death of the deceased person,
or
(b)
an application for a family provision order is
made in relation to an estate that has been previously the subject of a family
provision order.
(2)
The Court must not make a notional estate order
in the proceedings unless:
(a)
it is satisfied that:
(i)
the property to be designated as notional estate
is property that was the subject of a relevant property transaction or of a
distribution from the estate of a deceased person or from the estate of a
deceased transferee, and
(ii)
the person who holds the property holds it as a
result of the relevant property transaction or distribution as trustee only,
and
(iii)
the property is not vested in interest in any
beneficiary under the trust, or
(b)
it is satisfied that there are other special
circumstances that justify the making of the notional estate
order.
ch 3, Parts 3.3, 3.4 (ss
74–100): Ins 2008 No 75, Sch 1 [10].