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May 2007
Anna Nicole Smith - some of the doubt is due to a lack of estate planning
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 Lawyer in Profile  Geoff MusgrovePartner, Commercial Group Phone: 03 9288 0555 Geoff Musgrove is a partner in our Corporate & Commercial group. His principal areas of practice are commercial contracts, mergers, acquisitions and disposals, joint ventures, intellectual property, Corporations Law, insolvency and information technology law. Geoff has acted for a wide range of commercial, government, accounting, manufacturing, professional and rural industry clients. He advises them on contract negotiations, acquisitions, disposals, joint ventures, reconstructions, insolvency, amalgamations, commercial litigation, computer contracts, franchise agreements, commercial property transactions, tax planning and intellectual property. Recent experience includes the merger of a large accounting practice with a listed public accounting practice, the disposal of businesses in the middle market, advice on resolution of shareholder disputes, drafting joint ventures and licence agreements, advising on the conduct of board meetings and reviews of company constitutions. Geoff has also been involved in the establishment of ADVOC Asia, a consortium of Asian- based law firms. Geoff provides advice to our clients forming business relationships in the Asian region and to overseas clients doing business in Australia.  
Media stories about celebrities who die without an up to date will remind us and our clients to regularly do some estate planning. It's worth it: each year, the number of wills contested in Australia increases. Last year there were 456 claims in Victoria alone.
Teresa Catalano
Celebrity disputes over estate assets may seem irrelevant to most of us, but they remind us that:
The estates of ordinary Australians are at risk and it's an important time to ask yourself whether your own will, and those of your clients, are in order. An extraordinary example - under US lawIn 2007, Anna Nicole Smith died in tragic circumstances while a dispute continued as to whether she had inherited the estate of her extraordinarily wealthy husband. (His will had intentionally omitted any reference to her. That matter is still before the courts.) Her own will:
However, as Anna Nicole's son Daniel had died before she did, lawyers argued that Anna died intestate - that is, without a will, because her only beneficiary had predeceased her. Therefore, they claimed her entire estate should be held in trust for her baby daughter (as her next of kin). What would have happened under Victorian law?In Victoria, the law safeguards children which would have meant that Anna Nicole's estate was to be held on trust for her daughter. However, a de facto partner who could establish a de facto relationship with Anna Nicole at the time of her death would inherit:
Although this law goes some way to protecting a de facto partner, the deceased may have wanted her children to receive the entire estate (rather than having to share any of it with such a de facto partner). Jurisdictional differences from state to stateEach Australian state has different inheritance laws. Generally, issues about a person's estate will be determined according to the laws of the state in which the person resided. Safeguarding a minor - setting who will be responsibleA minor (being a person under 18) is unable to administer their own estate (whether or not the estate is received by inheritance). In Australia, this role would most likely pass to the minor's legal guardian. Parents can address this by nominating a guardian in their wills. Can Anna Nicole's estate continue the dispute about her husband's estate?At the time of Anna Nicole's death, she was contesting the will of her deceased husband. Can that action continue? If this had happened in Australia, the general position is that the right to commence an action to contest a will (and make a family maintenance claim) is lost when the person contesting the will dies. The right to make a claim can only be inherited by an executor of the estate if the claim had already been brought. In Victoria, the issue of whether an appeal could be continued by an executor once commenced is unclear as this issue has never arisen. What does this mean for your estate and your client's estates?While inheritance law remains relatively unchanged in Australia, the emergence of new family structures and relationship categories makes the law potentially complex to interpret and apply. High profile estate disputes serve as a timely reminder to make sure your own estate - and the estate of your clients - is in order. The key element is having up-to-date wills. Time spent planning now can save beneficiaries from the expense and anxiety of contesting an out-of-date will later. Many different life events should cause people to turn their minds to reviewing their wills. The main events include:
More informationIf you would like more information concerning this topic, or estate planning generally, please contact the Private Client Services team at Maddocks on 03 9288 0555.
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