Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
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.
High Court decision puts cat among inheritance pigeons
Legal disputes about inheritances caused by spoken promises are expected to increase following a High Court decision that upheld a farm manager’s claim to the property of a leading academic and former head of the ABC.
When coupled with the trillion-dollar transfer of wealth from Baby Boomers, born between 1946 and 1964, to their children and grandchildren, undocumented promises made during COVID-19 and the increased number of blended families, then the most likely outcome will be an accelerating growth in legal challenges.
Andrew Meiliunas, an associate director of the law firm Nevett Ford, says: “The High Court decision enables a claim to be made when a person makes a single representation to another party which is relied on to that party’s detriment and the reliance can be reasonably expected.”
He adds that the promise applies even if there are no additional acts of encouragement by the promisor, who makes the promise, or knowledge of reliance or detriment to the party bringing the action.
The High Court ruling involves the family of former ABC chairman, Australia’s first female English professor and first female chancellor at Sydney University, Dame Leonie Kramer, losing a dispute about a verbal promise that their property manager would inherit the family farm.
David Stone, manager of the 100-acre farm owned by Dame Leonie, claimed he was told by her husband, Harry, that the property would be his upon their death.
When Dame Leonie died in April 2016 (her husband predeceased her by 29 years), the Colo property, which is in bushland northwest of Sydney, was left to her daughter Hilary, who was an executor of the will.
Stone claimed Dame Leonie and her husband had said that since about 1975, the property would be left to him on condition he kept working there, despite him receiving less income than in comparable jobs. The Kramer family had owned the property for about 40 years.
The High Court upheld that Stone’s evidence had been “devoid of embellishment” and that the promise of the inheritance had been made to “supplement what would have otherwise been an inadequate income”.
The court also found it would be “unconscionable” if the deceased estate was not bound by this promise.
In reviewing an agreement, the court will examine the relationship between parties, whether the promise was relied on to the detriment of the person receiving the promise and whether it would be unconscionable if the deceased estate was not bound, lawyers say.
Anna Hacker (pictured), client director at Pitcher Partners, says: “People need to understand the consequences of what they have agreed to. Making mistakes can cost hundreds of thousands of dollars in legal costs.”
She says the terms of an agreement need to be negotiated and discussed with other family members affected by the decision.
“It should be reflected in the wills of the people making the gift,” adding a recommendation that independent legal advice about whether what was said amounts to an agreement.
In addition, there needs to be regular reviews and updates of succession plans, clear communication with affected parties and inclusion of promises into formal estate planning.
Hacker says: “Those being promised a gift should have some corroborative evidence, such as a witness to the agreement. That might involve contemporaneous records of conversations and the conduct of both parties. Also, have supporting evidence about the value of the detriment.”
For example, it could involve a person relying on a promise to their detriment, such as working for lower wages in the expectation of some later compensation; financial investments made on the basis of a promise; or adverse impact on educational opportunities or lifestyle.
