Asset Protection on Parents property when divorced

[ritchie77]

Basic summary:

1 x parent dies leaving remaining pool of assets to husband. This includes large family home as well as block of units.

The father now has a cleaner who has become very friendly with him and also assists with cleaning the block of units. She has very little english however had a husband and is now divorced and now seems to be hanging around a lot - a bit too much according to the sons and daughters.

The father has denied anything is going on and she will not take anything however the family is scared she is putting things in her name using his address and may make a claim on the estate once he is dead (she is Phillipino and he is greek with poor english ).

Options to negate this as the sons and daughters currently are next of kin once he passes (noting 50% belonged to their mum which was passed to the father when she passed). The risk is if she does claim to be his "partner" she could claim up to 50%!!

Options to minimise risk:

1. Transfer properties into childrens name now - stamp duty $$ and father sees no reason to do this.
2. Register a mortgage on these properties above the value they are worth so children will have first priority in the event of claims from cleaner (difficult to prove money passing from children to father to justify a mortgage of $x). Father has no mortgage on these properties. Can the children claim monies for looking after mother and brother when sick or managing unit (ie $x for 20 years or would this be more like income).
3. Testamony Trust on death - same issue as normally passing over if the cleaner makes a claim.
4. Write formal letter to cleaner with our suspicions and get her to confirm she has no interest in father's estate.
5. Make a video with father confirming she has no right to estate and they are not dating.

I would value any opinions or additional thoughts on above to see if it is worthwhile approaching solicitor or is there nothing we can really do yet? The father still thinks there is no problem but as we have seen with other families they just leave all the mess behind for others to deal with!

Thanks
R

 

[property_girl]

Someone like Terry is best to answer this. If I were you I would see a lawyer. Bring along your father if he is amenable. Trusts or a living will?

Whilst I can understand your need to protect a portion of your father's estate and ensure it isn't squandered, remember that your father also has a right to happiness.

 

[cu@thetop]

Mutual Wills?

Anyway- why not have dad move in with one of the kids and sack the cleaner.

 

[Paul@PFI]

She could claim more than 50%...Mum didn't leave her estate under a TT will.

A Deed of Mutual wills prob isn't relevant as DMW is used by marital parties so BOTH TT wills are incapable of change other than by mutual consent. Spouse is decd so that cant happen. If DWM can be used the mutual consent may be easy anyway if she gets dad onside.

Problem is dad can always make a new will later. That's what needs to stop after he makes a final TT will in favour of kids.

Lawyer advice recommended... Lots of issues.

Getting Rose Porteous out of the house would be a better idea. No keys no access no entry.

 

[ritchie77]

He has a will - just concerned it could be challenged illegally?!?

He will move in with one of the kids, just not yet although he is in his 70's.

Thats the other thing - he is 70+, the cleaner is in her 30's and they dont speak the same language!??! She is waiting around and ready to pounce but we fell there is nothing we can do.

More than likely everything will be ok and the will will stand. It is only if she says they were an item and pulls out some "evidence" which will obviously be incorrect. I am just trying to cover ourselves in advance.

Yes he is welcome to his freedom and have ome happiness but he could be leaving a big problem behind with someone he cannot even converse with... I am unsure if there is any hanky panky going on behind closed doors lol but he is adamant there is none!

 

[ritchie77]

Hi Paul,

TT = Testamonary Trust but what dows DWM mean?

Thanks

Yes easiest option is to get her out lol! She does not have keys and simply comes round to clean the house only once a week or so.... Problem is father falls asleep a lot and is not too active around the house so who knows what she is doing in the bedrooms when he is asleep on the couch! He is getting on and pretty innocent and does not see any problem.

 

[MRO]

I had a friend who went through something similar.

He bought his Mums house for about $600k - cash to Mum. Grandfather dies leaving mum more cash. Mum meets new partner and decide to marry 6 months later. They buy and new house together and put most of the remaining cash into a big boat. 6 months later Mum dies of cancer. New partner legally now owns everything after knowing his Mum for 1 year.
My friend and his sister (who has a new child) received nothing from the Grandfather or Mother effectively giving the new partner all of the life savings from two people who he had only known for a year. The new partner did not intend for this to happen and was a genuine guy but the outcome just didnt seem fair.

 

[TMNT]

I couldnt think of a more typical asset clean out situation

elderly european male, loses wife, has poor english speaking younger philpino cleaner,

they fall in love........apparently

kids can see this coming a mile away

they try to convince dad to be careful or prevent him from losing everything

dad either thinks he is protected, or she is 'different'

things go sour

all things turn to hell

he comes crying to you saying his life is ruined (and yours) , and 'how could she have done that to me'

Id say be very very careful and even consider forcing him to hand over asssets/inhertiance to his kids/siblings or whatever

and convince him to run a mile

 

[Terry_w]

Yes she could make a claim, whether there is a will including a testamentary trust or not, whether she is left something or not. 2 basis to make the claim - one under family law and 1 under family provision chapters of the succession act.

Even if there is no sexual relationship she could make a claim. She could be a spouse, in a dependancy relationship or oculd be a dependant.

Even if Dad transfers his assets to you now these could still be attacked under notional estate order - generally if he dies within 3 years.

She may also have grounds to make a claim using estoppel if he has made promises.

Dad may even change his will to leave to her. Assuming he has capacity this is in his power to do so. If he leaves everything or even just something to her you could also make a family provision claim.

Just because someone makes a claim doesn't mean they will be entitled to anything or will get awarded anything.

 

[ritchie77]

This is sounding worse and worse!

Any opinions on my options? Or should the children "buy" the real estate in his name at MV or can a loan be established between the parties, effectively a family loan on paper? Then when the estate is up for grabs it shows the father as owing money to the children..... Does there have to be an actual cash transfer of money or can this be done in writing with a solicitor?

 

[Terry_w]

Its not your property so not much you can do. Fake loans - can't see how that can help. Purchasing = cash in dad's hands = an asset up for grabs. But he could easily spend it.

 

[TMNT]

This is sounding worse and worse!

Any opinions on my options? Or should the children "buy" the real estate in his name at MV or can a loan be established between the parties, effectively a family loan on paper? Then when the estate is up for grabs it shows the father as owing money to the children..... Does there have to be an actual cash transfer of money or can this be done in writing with a solicitor?

I have no idea what the solution is but thats why so many men in this country arent getting divroced because once they have assets in their name, and one tart comes along, they can lose it all or well aobver 50% in as little as 6months to two years , and still be affected after being taken to the cleaners

maybe terry could suggest some realistic options

 

[Terry_w]

In This situation a testamentary discretionary trust would have worked well for the first parent. This way the surviving parent wouldn't inherit and those assets would be much more protected and available for the children.

So anyone with assets should consider forming a discretionary trust in the will to leave assets to.

Care should be taken with super too..

 

[ritchie77]

Thanks Terry,

I have spokenabout TT before and will defenitely be making a testamonary will for myself!

What about transferring property without cash actually changing hands? ie gifted or advanced somehow? Would incur stamp duty which would be quite significant

What about putting a mortgage or caveat on the property??

 

[ritchie77]

The main issue is in her validating a claim as she has access to his house

ie - have letters in her name at his address as the father is elderly and poor english so maybe doesnt keep a close eye on mail etc... This could be fairly substantial evidence I would think? The father does not beleive she would do that though and does know what mail is addressed to his house (at least thats what he thinks )

 

[kathryn d]

Put a lock on the mailbox....and not allow the cleaner to have access?

You will see if any mail is coming in her name..if so, you stop it now...the cleaner is fired.


My former husband, had a similar problem. His mum died, and then his dad's 'house keeper' and him got engaged. She was widow in her 80's and he was about 90 at the time.
My ex and his siblings did not like this, as they saw her as a gold digger (wanting to leave money to her children)..so they requested their father give them their inheritance before they married.
The father did.
The marriage didn't last.
I'm not sure if they were divorced or not, when he died earlier this year.(age 98)

 

[Terry_w]

Thanks Terry,

I have spokenabout TT before and will defenitely be making a testamonary will for myself!

What about transferring property without cash actually changing hands? ie gifted or advanced somehow? Would incur stamp duty which would be quite significant

What about putting a mortgage or caveat on the property??

under value transactions - s76 Succession Act
http://www.austlii.edu.au/au/legis/nsw/consol_act/sa2006138/s76.html

What will the mortgage secure? What interest will the caveat notify?

 

[Terry_w]

The main issue is in her validating a claim as she has access to his house

ie - have letters in her name at his address as the father is elderly and poor english so maybe doesnt keep a close eye on mail etc... This could be fairly substantial evidence I would think? The father does not beleive she would do that though and does know what mail is addressed to his house (at least thats what he thinks )

Think ahead a few years on her trying to establish her claim of being a spouse or in a "close personal relationship"

(3) For the purposes of this Act, a
"close personal relationship" is a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.

She would probably use
- mail
- photos
- affidavit evidence from others that they were seen together
- joint bank accounts (if any)
-

This reminds me of a case where a young Chinese guy ran this argument when his older female flat mate died. He failed, but if you can find the case you can see how he ran the argument and what evidence was used. I think it was NSW Supreme Court about 5 years ago

 

[ritchie77]

Good points/advice above. I think the ideal solution in this scenario is:

Lock on the mailbox
Make sure she is only coming round once a week
Check she is not taking any pictures of them together
Get father to make a video or sign affidvait advising he is not in any kind of relationship with her (could do this every 6 months if it would add any value?)
Convince him to live with one of his children - this may be a while away!

Probably no point putting a mortgage or caveat on the property if father is getting notihing in value in return for the mortgage - this could likely be argued and challenged.....

Hi Terry - I had a look for some old cases but no luck... Usual story though weve all seen this before just trying to be proactive... Maybe nothing you can do and it will be all about disproving her claims if she does in fact make a claim on his estate down the track

 

[Terry_w]

Affidavit would be good though as once a person is gone they can no longer give evidence in person, but can give evidence via affidavit. Shoud make sure it is in admissible form.you have to be careful about undue influence allegations down the track.

see
Ye v Fung (No 3) [2006] NSWSC 635