Janine enacted a will in which she had somewhere given details of the specified gifts to be given to whom and on what conditions. For the rest of the estate, she had given the residuary benefits. Alan, her executor and trustee after her death has to figure out the entitlements of the gifts and estate and how much portion of it shall the beneficiaries be entitled too.
The non-statutory laws of Australia are based on two stumps- equity law and common law. common law is what protects the rights of the citizens as per the unanimous laws of the country. Common laws are to apply strictly and blatantly as it is. This was the main reason for unjust judgements. It was to curb this equity law came into prevalence. As per Hudson, it is a collection of legal principles that would help the courts to reach a fair judgement which otherwise through the use of common law would provide injustice.1
(i) Alan was appointed as an executor and the trustee by Janine. An executor is a person who is appointed to carry out the will as it is. He is a person with many obligations and duties like locating the will, making funeral arrangements, applying for probate estate etc.2 however, where trust is formed under the will, the same executor can be a trustee to the trust. His job is to take care of the estate for the beneficiaries of the testator till they come of age or as per the will of the testator, manage the estate on the death of the testator placed in a testamentary trust, etc.3 therefore Alan has a responsibility under clause 3 to utilize the amount of $2,000,000 in the EBC as stated in the will. Janine wanted the money to be used to buy or use an area of land in NSW and form a park or a reservation or a sanctuary of the enrichment of flora and fauna of Australia.
However, if Alan tries to breach this clause then he shall be liable for breach of trust. This term means, as held in4 when a trustee, given the responsibility by the testator does not fulfil that in good faith. However, in NSW, a trustee can be liberated from this as per section 85 of the Trustee Act 1925 (NSW). It says that if the court feels that the person has acted honestly or acted reasonably or have a valid justification for his acts, then he cannot be held liable for the breach. A trustee owes a fiduciary relationship to the beneficiaries. Hence if he breaches his duties, then as per equity he is answerable to the beneficiaries. So, for his acts, he is liable to pay compensation and the profits he incurred from the misuse of the estates. He is liable to reinstate the beneficiary the trust estate in the same position as it was handed to him before.5 In a recent case6, Australian Executors Trustees was held liable for the breach of trust as he failed in his duties like not taking care of the trust, not thinking in the benefit of the beneficiaries etc.
(ii) Manuel and his sisters, under Clause 4 of the will were transferred Janine’s house in Manly. Provided that he must keep it as his home and only when he provides homage to his sisters too. Clause 19 of the Residential Tenancies Regulation 2010 rules out from the Residential Tenancies Act 2010 (NSW).7 There are two types of life tenancy recognized by the law. First is where a person has an agreement of life tenancy for their entire life. Hence such types are governed by The Landlord and Tenant Act 1899 (NSW).8 The second is having proprietory ownership of the property. This means the owner is in possession of the property but do not pay any rent. He can let out the property and gain remuneration from that.9
The rights of such life tenants are- first, he becomes the owner of the property that confers upon him the life tenancy.10 Hence he can lease it out without prior permission of the court.11 Second, he is entitled to make alterations on the land as per his convenience.12 Third, he is entitled to protect the interest of remainderman (he is who is entitled to the possession if the life tenant dies) and should not do anything that could devalue the property.13 Fourth, unless the deed or the will says so, he is not entitled to keep the estate on the repair but should pay the council and water rates.14 The remainderman can bring a suit against the life tenant if he fails to protect the asset without voluntary waste.15 This means anything that de-values the property like pulling down a house is considered as voluntary waste.
Therefore, as per the will, Manuel has to take care of the property at Manly as his home and should give refuge to his sisters. As per the rights mentioned, he can either take care of the property as an owner or and can even sub-let it and earn remuneration from it.
(iii) A trust simply means any property held by the trustee for the benefit of the beneficiaries. He has to keep his interest below the interests of the beneficiaries. A trust can be formed in the name of the beneficiary. For a trust property to be transferred to the beneficiary, it has to be declared in writing.16 If it is not written then as per law it becomes invalid though based on equity, it’s not. In17, it was held that under equity, a transferred property is valid only if the duties of transfer have been met by the settlor. However, the inter vivos transfer transfers has to be declared in writing. If not, then it is unenforceable. In a case18, the plaintiff and the defendants were joint tenants. The plaintiffs transferred their shares to the defendant, orally, on a condition that if they do not occupy the house within 12 months, then they are entitled to re-transfer the transferred shares to the plaintiffs. The defendants did not gain ownership but mortgaged the property to a third party. It was held that the defendants are to pay the half of the proceeds from the sale and half interest in the mortgage.19
Therefore, to decide who shall be the owner of the Greenacre, so the house has not yet been delivered to Eva, the beneficiary. For that, Alan has to take permission from the court to deliver the transfer of it in the name of Eva, as per law. Eva gave her interest to Margot, even before having any ownership of Greenacre, so as per equity that transfer is invalid. Greenacre is still the property of Janine and cannot be transferred to Eva before 1 May 2020, the day when Janine died.
(iv) Residuary beneficiary means a person who, after the distribution of the assets of the testator receives the leftover assets, if any. There are two types in this-one in a will and another in a trust.20 The residuary beneficiary in a will receives all and everything after the distribution of specified gifts mentioned not just in the will but apart from that too. So if anything goes unmentioned in the will, that shall be given to the residuary beneficiary.21 The residuary beneficiary of the trust shall have all of the property that is in the trust.22 Usually, the beneficiaries in this do not get much of the property or sometimes nothing at all. This is because of the trust names all the properties under the name of specific beneficiaries or alternate ones.
Therefore, as for Belinda, she shall be entitled to the remaining of MRS shares after what was given to Gavin. On 10th April, MRS said the dividends of two years which they were not able to give to their shareholders due to expensive research, they shall be releasing those from 2021-2022. So, after the death of Janine, that shall be given to Belinda on being the residuary beneficiary. On 15th April, the trustee of a bare trust in MRS transferred the legal title to Janine, so that too after Janine, shall be transferred to Belinda. Before that, on 1st March, Janine gave $1000 shares of MRS to Gavin so he shall be entitled to that limit only. On the death of Janine on 1st May, Gavin shall be a holder of $1000 MRS shares and Belinda, of $499,000 and the recurring dividend from 2021-2022.
(v) Just like what happened in the Greenacre property, where Eva before having any ownership of the house, transferred that to Margot as Janine told her about the transfer she has made in her name, is invalid. Similarly, for the CCM shares too Janine told Felicity about the $2000 shares she had on trust for her have not transferred to her before the probate on the will is done by Alan. Even if she intimidated Janine that she wanted her to hold the shares on trust for Zelda, that the given problem is latent to what was Janine’s response. Considering that she did not agree with the counter-offer of Felicity, so the shares on trust shall be in the name of Felicity, legally only after the probate on will. Before that Zelda cannot be held beneficiary of those shares on trust. Now that on 29th April, Felicity died, naming Frank as her sole beneficiary, so he shall be entitled to the CCM shares on trust as per Felicity's will. Therefore, in the end, Frank shall be the owner of the CCM shares as per equity.
The will drafted by Janine was quite explicit and without much of any ambiguities. Therefore, the beneficiaries are entitled to the portion of her estate as said in her will. Belinda being the residuary beneficiary is entitled to all of the estate leftover and recurring, after the distribution of all of the specified estate. The conditions on the clauses stated in her will are entitled to be followed by Alan and Manuel. If not, then they are not entitled legally to have her estate. So far, the ownership of Greenacre, it was still Janine's property as only the title was given to Eva and not the ownership. Ownership in a will is transferred only when the testator dies. Therefore, she cannot further alienate the house to Margot. As for the MRS and CCM shares so Belinda is to get the dividend was said by MRS and the remaining of leftover shares after giving it to Gavin and Frank can be the owner of CCM shares.
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