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     


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2: Kennon v Spry; Spry v Kennon [2008] HCA 56 | August 21, 2014

Court or Tribunal: High Court of Australia
Catchwords: Family Trust, Wills & Probate
Judges:  French CJGummow CJHayne JHeydon JKiefel J


Background: This involved a senior Melbourne QC. Before he was married he had set up a trust, and he was the trustee and was entitled to vary the terms of the trust. The beneficiaries were himself, his siblings, their children and their spouses. By two amendments, both the husband and the wife were excluded from the list of beneficiaries. The last amendment was effected at a time when the marriage was in trouble. The husband as trustee subsequently moved several million dollars from the trust to their children and to trusts for the children. 
 
  [Legal Issue]The existence of a family trust has caused difficulties in Family Law property disputes, because if, say, the husband is a beneficiary under a trust, he does not actually own anything until a distribution is decided upon. The Family Court's power is to deal with "property", and so there were real doubts about the court's ability to make orders about a possible entitlement under a trust.   [Court Orders]The legal ramifications with family trusts as a result of Kennon and Spry suggests that a family trust is not intended to be used to disadvantage a spouse following a marriage breakdown. The use of s.106B, s.85A are powerful weapons and when you weave in submissions concerning the right of due administration and due consideration these make it very difficult to exclude a spouse from some entitlement under a trust. However we may not have heard the end of the case as questions of enforcement      


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3: Darveniza v Darveniza & Drakos as Executors of the Estate of Bojan Darveniza and Ors [2014] QSC 37 | March 13, 2014

Court or Tribunal: Supreme Court of Queensland
Catchwords: Estate Planning, Estoppel by Conduct, Family Provision, Family Provision, Family Trust, Family Trust, High Value Estates, Large Estate, Requirement of Adequate Maintenance, Succession, Succession, Wills
Judges:  Martin J


Background: Steven Darveniza, the eldest son of Bojan Darveniza, took his father’s widow to the Supreme Court to get a share of the estate, claiming he had worked for his father for many years. Bojan Darveniza died in 2010, aged 78, leaving most of his estate to his second wife, Xiao Hong Darveniza, now known as Jane, who was 30 years younger than him. Multi-millionaire Bojan Darveniza was a hardworking, astute investor with a talent for turning run-down properties into rental goldmines, amassing a fortune. But to his older children, Bojan was a tyrant who ruled them with an iron rod, making them work hard in the family business after school and on weekends. Bojan had eight children – Steven and Tania with first wife Lindsay; Natasha, Jonathon and Andrea with his ex-housekeeper de fact 
 
  [Legal Issue]This case involves an examination of the familial and financial relationships of the Darveniza family. Steven Darveniza has brought two matters before the Court. In the first he seeks an order for provision (pursuant to s 41 of the Succession Act 1981) from the estate of his deceased father, Bojan Darveniza (“the provision claim”). In the second, he seeks declarations about, and transfers of interests in, a number of family companies (“the trust claim”). He also seeks damages pursuant to s 82 of the Trade Practices Act 1974 and consequential orders (“the company claim”).    [Court Orders]Bojan’s personal estate was worth $40 million at the time of his death, but the net value was now between $26 and $28 million, the court heard. Justice Martin said Steven deserved better provision from his father’s very large estate because he had worked long and hard for Bojan, contributing to the growth of his property interests. Two reasons for his father not providing for him in his will were misconceived or based on a misunderstanding, the judge said. He also accepted Steven co     


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