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Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
Costly fight over water rights highlights need for well-drafted will
A brother and sister’s fight over the water rights to their deceased parents’ rural property highlights the importance of a well-drafted will to avoid costly confusion.
Rodney Troy was bequeathed rural property valued at about $120,000 and his sister, Deborah, property worth around $1.9 million, when their mother, Florida, died, aged 91, in 2019. Their father and Florida’s husband, Thomas, died in 2015.
The deceased couple, who had been married for 50 years, lived and farmed in Murrabit, Victoria, which is more than 300 kilometres north-west of Melbourne. Their 540-hectare property was divided over three titles.
A dispute arose about whether Rodney’s share also included shares worth more than $500,000 that entitled use of water from the nearby Murray River.
Andrew Meiliunas, an associate director of lawyers Nevett Ford, says: “This case highlights, yet again, the importance of a well-drafted will to avoid confusion and disputes down the track.”
Lawyers say there has been a big increase in the number of disputes about wills, with about 60 per cent of claims brought by adult children. Most of the other disputes involve partners, or ex-partners, of the deceased.
An intergenerational transfer of about $3.5 trillion by 2050 is adding to the potential for disputes among family members, lawyers add.
Rodney worked on the farm with his parents from when he left school in about 1980, aged 16. The Victorian Supreme Court was told he worked 12-to-14-hour days, seven days a week, for 10 months a year. He earned 12.5 per cent of the farm’s profits.
The disputed water sourced from an irrigation channel was used for the farm located in a major citrus-growing region. A licence is needed to use rural water, even if a farm’s owner has a water entitlement or allocation.
“It’s possible the will-maker assumed the water rights would have been gifted with the property,” says Meiliunas. “But for the avoidance of any doubt, a simple clause in the will making that clear would have avoided a Supreme Court dispute.”
The court had to consider whether the shares should go with the son’s property or form part of the daughter’s “residuary” estate – any part of an estate that has not been distributed to heirs through a last will or testament.
Justice Steven Moore found the water shares were gifted to the son, ruling the court is entitled to sit in the testator’s armchair. “When seated there, however, the court is not entitled to make a fresh will for the testator merely because it strongly suspects that the testator did not mean what he has plainly said.”
According to State Trustees, a government-backed company providing financial and legal services, testators should avoid confusion by listing assets in categories, including their value and whether there is a mortgage or loan.
A professionally drafted will that clearly indicates the final wishes of the testator can also avoid expensive disputes and delays.
