Carol and Ivan had a lot in common: they had met through their mutual interest in motorbikes, they had both been married before, they had grown up children from their previous marriages and they had both come from farming backgrounds.
Carol and Ivan decided to live their dream. They purchased a small property. Ivan ran some stock on the property but made very little profit. Carol and Ivan worked in town to service the large mortgage they had taken out. The dream was shattered not long after Carol and Ivan had bought their property. One night Carol awoke to a loud thump and found Ivan dead on the bathroom floor.
Eventually Carol felt strong enough to deal with the “paperwork”. Carol went to see Ivan’s lawyer. Ivan had made a will after he had met Carol but before they had married. Under this will, Ivan had left his guns, tools and his motorbike to his two sons, and the rest of his estate to Carol. Ivan had been estranged from his sons for many years but still wished to leave something to them.
Carol and Ivan had not realized that the will Ivan had made before they married was automatically revoked by their marriage. Ivan had therefore died without leaving a valid will. (If Ivan had stated in his will that it was to continue after their marriage, the will would have been valid.)
What did this mean for Carol?
As Ivan had died without a will, Ivan’s estate had to be distributed as set out in the Administration Act 1969. Carol was in this position:
- Carol was entitled to ownership of all their jointly owned property. This included their house and land, bank accounts (that had only minimal amounts in them), their furniture and their garden implements.
- Carol was entitled to all of Ivan’s personal chattels. (These included Ivan’s dog, his car, boat, motor bike, guns, tools, clothes, wedding ring and camera, but did not include the stock.)
- The rest of Ivan’s estate was worth $386,000 - the value of a life policy of $350,000 and stock valued at $36,000. According to the Administration Act 1969:
- Carol was entitled to $232,000 of the $386,000. The $232,000 was made up of:
- The statutory legacy of $155,000 (plus interest from the date of Ivan’s death until paid to Carol).
- 1/3 of the balance of Ivan’s estate of $231,000 i.e. $77,000.
- Ivan’s sons were entitled to the balance of Ivan’s estate i.e. $154,000
- Carol was entitled to $232,000 of the $386,000. The $232,000 was made up of:
Carol was very upset. This was definitely not what Ivan had intended. Carol wanted to stay on the property and enjoy happy memories of her life with Ivan. Carol only worked part time and could not afford to keep up the mortgage, even if she used all of her $232,000 to reduce the mortgage. Carol would have to sell the property.
Carol’s lawyer has begun to investigate ways in which Carol might obtain more from Ivan’s estate. This is very expensive for Carol. It might take a long time. There is no guarantee that Carol will be successful. Perhaps Ivan’s sons might agree to forego their entitlement. Carol might have claims under the Family Protection Act 1955, the Property (Relationships) Act 1976 or the Law Reform (Testamentary Promises) Act 1949.
Review your Will regularly
Your will may be the most important document you ever sign. Make sure you have a valid will, review it regularly and take legal advice if your circumstances change.
Please email me at [email protected] with your ideas for future articles. Keep an eye out for next month's column, where I will discuss another relevant rural legal issue.
Barbara McDermott is a partner of Norris Ward McKinnon, specialising in commercial and rural law. With offices in Hamilton and Huntly, we have friendly, expert legal advisors ready to help you with your business and personal legal matters.