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Legal Tip 124: Estates – when person thought to be dead is found alive

Discussion in 'Legal Issues' started by Terry_w, 21st Apr, 2016.

  1. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Estates – when person thought to be dead is found alive

    When someone dies their estate passes according to their will on the intestacy laws. However sometimes it is not known whether a beneficiary under a will/intestacy is still alive or not as they cannot be located. What happens in this situation?


    Example
    . John dies without a will. Intestacy laws in his situation mean the children will get his estate in equal shares. He has two adult kids. 1 is alive but the other is not able to be located. If the 2nd child is dead the first child will inherit the lot. If both are alive they will each get 50% of their dad's estate.

    The Administrator of the estate has a problem as if they distribute on the assumption that the 2nd kid is dead, but he later surfaces, that kid can sue the executor for their share that they missed out on. If the Administrator of the estate doesn’t distribute the 1st kid would not have access to the funds he is entitled to.

    In this case, it is possible to apply to a court for a determination of whether number 2 is still alive. If he has not been seen or heard of for 7 years then the court may make orders to issue a death certificate. There will be issues with the time of death as if he died after his dad then the 50% share of the dad’s estate may have been inherited and then passed on via no 2’s will or intestacy laws.


    A second option is for the administrator to apply for a ‘Benjamin order’ which is an order that allows the Administrator to bypass the missing kid and distributes the whole of the estate to the first kid. If the 2nd kid surfaces later he cannot make a claim against the Administrator, but he could still claim his share from his brother (under the laws of equity).


    Here is a recent case where they searched for 18 years for someone yet couldn’t find him. The court made orders that he be bypassed even though they think he may still be alive somewhere:

    Application of Harnett and Cutts [2016] NSWSC 427
    Application of Harnett and Cutts - NSW Caselaw
     
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  2. larrylarry

    larrylarry Well-Known Member

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    Love reading this in the morning. One should note the resources taken up to locate the missing beneficiary...legal costs would have been huge.
     
  3. legallyblonde

    legallyblonde Well-Known Member

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    Some of the cases are better that T.V. ;) It is one of the things I enjoyed most about studying law!
     
  4. larrylarry

    larrylarry Well-Known Member

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    TV is not required. Case Law will more satisfy you.
     
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  5. TMNT

    TMNT Well-Known Member

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    what would happen if someone fakes their own death and everyone beleives it, and the assets are split up and then he is found to be alive years down the track??

    what would happen if someone decides to go and live in the outskirts of Bolivia and is never heard from again? chances are theyd be dead pretty quickly anyway, but at which point can assets get split up or is it in limo for eternity?
     
  6. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    This is what the first post was about!

    if there was a death certificate the executor/administrator would be saved. but the beneficiary that missed out would be able to claim against the beneficiary's that benefited by getting his share.
     
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  7. larrylarry

    larrylarry Well-Known Member

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    @Terry_w Penfold v Predny - NSW Caselaw one cannot help but resonate with His Honour's observation:
    "In the proceedings, one cannot help but remember what was written by Professor Rosalind Croucher in a speech entitled “Succession Law Reform in NSW – 2011 Update” (which was delivered at the Blue Mountains Annual Law Conference, Katoomba, 17 September 2011) in relation to some claims brought by:
    “a cohort of ‘independent, self-sufficient 50 and 60 year olds wanting to get more of the pie from their parents, notwithstanding that the parent had made a conscious decision that they had already had enough”.
     
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  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Is there much case law on this. How may a court consider a person who wanted to hide who has deprived themself of a entitlement through their own acts to hide. Could a criminal reason to hide (evade capture) lead to a less supportive judgement ? I (not a lawyer) may expect at some point the court says Mr Smith you cant run and hide in Brazil for ten years after faking your death, illegally concealing your identity and existence then emerge and seek to claim a entitlement.

    There are cases involving endless Coronial inquests which still dont lead to a determination of death and its left as a open case so there is no death cert issued. ie here is a 1969 one. Coroner 'could find Butterworth person of interest made homicide admission'
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    The formerly deceased could make a claim against the others that benefited, but that doesn't necessarily mean he/she will be entitled to it all back. As time passes the other person would have spent money and changed their life around the money so giving it up would be burdensome to them too.

    There is another interesting case where it is likely one JT murdered the other JT owner, but no body was found and no charges laid. It also had to be ascertained who died first which is pretty hard to do without a body. I will see if I can dig this case up. (no pun intented)