1: Bernard & Bernard [2019] FamCA 421 | September 11, 2020

Court or Tribunal: Family Court of Australia
Catchwords: Contributions from Parents, Estate Planning, Family Trust, Family Trust, Inheritance, Inheritance, Matrimonial Property, Proceedings to Alter Property Interests, Property, Property Settlement, Rights of Executors and Administrators, Testamentary trust, Wills, Wills & Probate
Judges:  Henderson J


Background: The husband’s father died in 2012 and by his will established a testamentary trust for each of the husband and the husband’s sister. The husband was the primary beneficiary, and the class of other beneficiaries included his spouse, children, grandchildren and great-grandchildren. Despite being named as the primary beneficiary, the husband’s sister was the sole trustee of the trust. The husband was not given a power of trustee appointment and he had no other legal title to the assets of the fund other than being a beneficiary. The sister’s trust mirrored that of the husband’s in that the husband was the sole trustee of her trust. The two trusts operated a partnership which ran the family business of which the husband was the manager. The trusts also owned a commercial prop 
 
  [Legal Issue]In this case the divorcing husband and his sister both had testamentary trusts established under the Will of their father. Both were the trustee of the other’s trust. Neither was a beneficiary of the other’s testamentary trust. The Court considered whether assets held in the husband’s testamentary trust formed part of the matrimonial property pool available for distribution between the husband and the wife after divorce.   [Court Orders]The Court rejected the wife’s claims and held that whilst the assets of the husband’s trust were a financial resource it was not matrimonial property on the basis that: -the husband had no control over his sister as the trustee; -the husband could not direct the assets or income of the trust to any person; -the trustee could apply the income of the trust for the benefit of other beneficiaries of the trust, and not just the husband; -the mere fact that the husband’s trust was identica     


[  ] Download Decision

2: Calvin & McTier [2017] FamCAFC 125 | July 12, 2017

Court or Tribunal: Full Court of the Family Court of Australia
Catchwords: Divorce, Inheritance, Inheritance, Property, Property
Judges:  Aldridge JBryant CJRyan J


Background: The Full Court of the Family Court of Australia in Western Australia heard an Appeal by a husband who argued that an inheritance received 4 years after separation should not be included in the property to be divided between him and his ex-wife. The parties were married for 8 years and were divorced in 2011.They had one child who was 5 years old at the time of separation. In 2014 the husband received an inheritance from his father’s estate. The wife commenced proceedings more than 3 years after separation and was granted the Court’s leave under Section 44 (3) of the Family Law Act to pursue a property settlement claim. 
 
  [Legal Issue]The central issue on appeal was whether the trial Judge erred by including the husband’s post separation inheritance within the parties’ property pool available for division. The husband argued that his inheritance should not be included in the pool because of the degree of “connection” or more to the point, the lack of connection, between the inheritance and the parties’ matrimonial relationship. The husband was unsuccessful in taking that position and his appeal was dismissed. The Justices of the Full Court of the Family Court of Australia, Chief Justice Bryant, Justice Ryan and Justice Aldridge concluded that the Court retained a discretion as to how to approach the treatment of property acquired after separation. Conversely in the case of Holland & Holland [2017] FamC   [Court Orders](1) The appeal against the orders made by Magistrate Calverley on 17 November 2016 is dismissed. (2) The appellant pay the respondent’s costs of the appeal as agreed or in default of agreement as assessed. The husband was unsuccessful in excluding his post-separation inheritance from the asset pool. The trial judge assessed contributions as 65%/35% in the husband’s favour, which included a 10% adjustment to the wife for future needs. No appealable error established – Appeal dismissed      


[  ] Download Decision