A recent District Court of New South Wales judgment serves as a reminder of the importance of having a carefully considered estate plan in place, especially for those in blended families.

Background

Mr. Jeffrey Lofts (Jeffrey) died in 2023. At the time of his death, Jeffrey was in a de facto relationship with Ms. Regina Miller (Regina) who had been his partner for 29 years. Jeffrey and Regina did not have any children together, but each Jeffrey and Regina had children from previous relationships.

Jeffrey and Regina made Wills in 2016. Their Wills were prepared by a solicitor whom they had jointly instructed. Under the Wills, after the death of the first of Jeffrey or Regina, the survivor of them was given a right to continue living in their home in Forster. After the death of both Jeffrey and Regina, Jeffrey’s son Alexander would receive Jeffrey’s half share in the home and Regina’s two children would receive Regina’s half share.

Ownership of home on Jeffrey’s death

Jeffrey and Regina’s home was owned by them as joint tenants. This meant that when Jeffrey died in 2023, Regina became the sole owner of the property in accordance with the law of survivorship. Jeffrey’s share in the property therefore did not form part of his  estate and was not available to be gifted under his Will. However, if the property had been owned as tenants in common rather than as joint tenants, Jeffrey’s share in the property would have formed part of his estate and would have been given to Alexander after Regina’s death.

Court proceedings

Alexander brought proceedings in the District Court of NSW against the solicitor’s insurer claiming that the solicitor was negligent in failing to inform Jeffrey and Regina that to give effect to their wishes in their Will they would need to change their ownership of the property to being owned as tenants in common. Alexander claimed the losses he incurred because of the solicitor’s negligence.

The Court handed down judgment on 20 March 2026 upholding Alexander’s claim and awarding him $510,000 in damages plus costs. The Court found that the solicitor who prepared the Wills was negligent for failing to give advice in respect of the need to change their ownership of the property to be as tenants in common as would be required to give effect to their intentions in the Wills.

While Alexander was ultimately successful in this claim, there was no guarantee that Alexander’s claim would succeed. He had the burden of proving all the legal elements of negligence to succeed including that the solicitor’s negligence was the cause of his loss. Additionally, Alexander had to go through the time, stress and cost of litigation and was delayed in receiving the gift his father intended to give him under his Will. As the decision was only recently handed down, the insurer may still seek to appeal the decision as at the time of publication of this article.

Estate Planning considerations

The case underlines the importance of having a carefully considered estate plan. This can be especially important in blended families. It is essential for anybody making a Will to understand which of their assets and financial resources will form part of their estate and are therefore capable of being gifted in their Will. When preparing an estate plan, it is important to consider the following matters:

• Whether real estate is owned joint tenant or tenants in common;
• Whether bank accounts and other assets are owned solely or jointly;
• Whether valid and binding life insurance and superannuation death benefit nominations are in place, and if so whether the benefits are directed to form part of the estate or directly to a beneficiary;
• Whether assets are owned by the Will-maker in their own right or whether they are owned through a related entity such as a trust, company, or self-managed superannuation fund; and
• Succession plans for any family trusts, companies or business.

This case is a reminder that having an effective estate plan is more than merely having a Will stating testamentary intentions. A provision in a Will purporting to give away an asset will not be effective if the asset is not part of the estate.

If you do not have an estate plan, or if you would like to ensure your estate plan remains appropriate for your circumstances, telephone us to arrange a consultation. You may reach us by telephone on (02) 9698 9160 or send us a message through our website.

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