TAG sells home gifted to charity

ELIZABETH makes a will, leaving her “principal place of residence” to a particular charity.

She leaves the rest of her estate to her nieces and nephews and appoints her friend, David as her executor.

Ten years later, the NSW Trustee and Guardian are appointed as financial manager of Elizabeth’s affairs.

Elizabeth moves into a care facility and the NSW Trustee and Guardian sell her principal place of residence for $700,000.

The proceeds of sale are placed into a trust account for Elizabeth. Elizabeth had no other assets.

The NSW Trustee and Guardian pay Elizabeth’s ongoing accommodation fees from the trust account.

When Elizabeth passes-away, David obtains a grant of probate and the NSW Trustee and Guardian release the trust funds to David.

David advises the charity that because Elizabeth’s home was sold prior to her death, there is a question as to whether the gift “fails” and whether the trust funds should be distributed to the nieces and nephews.

The charity applies to the Supreme Court for a ruling regarding the interpretation of the will.

The Court finds that the clause in the Will is a “specific gift” that clearly identified Elizabeth’s home, at the time she made her will.

The Court also finds that although Elizabeth’s principal place of residence had changed by the time the property was sold, her “clearly expressed intention” in her will cannot be ignored simply because she was admitted into an aged care facility.

The Court then relies on legislation, to the effect that if the NSW Trustee and Guardian, or an attorney pursuant to a Power of Attorney sells a property, a beneficiary under a will has the same interests in the proceeds of sale as the beneficiary would have in the property had it not been sold.

The Court ultimately orders that the charity is entitled to the whole of the funds that were held by the NSW Trustee and Guardian and also orders that David’s legal costs and the charity’s costs are to be paid out of the funds.

Email Manny Wood, Principal Solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487.

By Manny WOOD, Solicitor