A woman in Shanghai, China recently made headlines when she cut her children out of her Will and instead elected for the major beneficiaries of her fortune to be her cats and dogs. Her reasoning? Her children no longer visited her while her pets were always there for her.
This is not a novel situation.
Had she lived in Victoria, she would have been advised that she couldn’t leave her wealth to her pets, but there may be other steps she could take to ensure they were appropriately cared for following her death.
On a practical level, a gift left in a will to a pet directly would fail.
Unfortunately for many pet lovers out there, the position of the law is that a pet is a ‘chattel’ or ‘personal property.’ This means that practically, a pet cannot own property or be a beneficiary of a Will – even though they are very much part of the family!
If the Will does not provide for other beneficiaries in the event a gift cannot take effect, the most likely outcome is that the default statutory intestacy laws would apply instead. These laws operate to distribute your estate to your next of kin, and apply where you do not leave a Will, or your will is unable to effectively deal with your estate.
This may be very different to how you envisaged your estate being distributed. In addition to your wealth potentially passing to the very people you meant to exclude, it may also mean that your pet doesn’t end up being looked after by the right person or in the way you expected after your death.
To avoid this, some alternative options to ensure your pet/s are taken care of after your death include:
Succession law in Victoria is largely guided by the principle of ‘freedom of testation’. This means that subject to certain limitations like not being able to leave assets directly to pets, a person largely has the freedom to make a Will that leaves their property as they please.
This freedom is however qualified by the risk of challenge to a Will or estate by disappointed family members.
Under Victorian law, certain “eligible persons” (as defined by the Administration and Probate Act 1958) can make a claim seeking provision or additional provision from your estate, if they can establish that you had a moral obligation to provide for him and did not discharge that obligation by your will. This is known as a family provision claim.
Importantly, a moral obligation is usually assumed in the case of spouses, partners and children. There is no equivalent moral obligation to provide for one’s pets (although many people naturally wish to do so).
A willmaker who prioritises their pets over immediate family members in their Will therefore runs the risk that their estate may up end up defending a claim from one or more disappointed family members.
However, this does not mean that your Will should not consider the future care and well-being of feathered, furry or scaly family members after your death, if this is important to you. In this situation, it is important to consider your objectives carefully and obtain specific legal advice when making your Will.
This will enable you to plan appropriately, to ensure that:
The Wills, Estate Planning and Structuring team at Moores is one of the largest in Australia and we can help you prepare your Will to ensure that everyone in your family is cared for, including your beloved pets.
Please contact us for more detailed and tailored help.
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Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.
In recent decades, family trusts have become a popular vehicle for Australians to protect and grow their wealth, owing to the flexibility, asset protection and tax efficiency advantages they provide. However, the succession and control of trusts on the death of the original family members who established them is often poorly understood and inadequately planned for, despite the sometimes significant assets at stake.
Trusts hold assets externally from an individual. Those assets do not pass in accordance with the will of the person who established or controls the trust.
The governing document of a trust is a trust deed. The trustee of a trust is bound to act in accordance with the trust deed. Key considerations when considering succession of family trusts as part of an overall succession plan include:
As circumstances change, a trust deed needs to be flexible enough to permit it being changed to meet those circumstances, but often they are not.
Often a trust deed will provide a mechanism for a trustee to vary its terms but the extent to which these variation powers are permissive or restrictive varies from trust to trust and sometime does not exist at all. But can a trust deed be varied if the trust deed is silent on a power of variation? In some circumstances the beneficiaries may be able to consent to changes. In others, the Court’s assistance may be required.
The Court has the power to vary the terms of trusts1, and this was highlighted in two judgments: W E Pickering Nominees Pty Ltd & Ors v Pickering & Ors [2016] and Re The Pickering Family Trusts [2024] stemming from the same subject matter.
Two brothers, Ted and George, operated a large and successful business through a unit trust. The units of that trust were held respectively by two discretionary family trusts; ‘Ted’s Trust’ and ‘George’s Trust.’
Ted’s Trust named Ted, Ted’s wife, their children, and their grandchildren as beneficiaries. George’s trust followed suit for his own family. Ted died in 2012. George died in 2020.
For business and tax planning reasons, the trustee and existing beneficiaries of each trust sought to expand the beneficiary class beyond those named in the trust deeds.
The trustees and adult beneficiaries were able to agree on amendments to the trust deeds; however, neither trust deed gave the trustee the power to vary the deed or expand the classes of beneficiaries. The trustee and beneficiaries required the assistance of the Court to give effect to their proposed amendments to the trust.
In the 2016 case, the trustee and adult beneficiaries requested three variations to the trust deed:
The Applicants argued that the Court had power under sections 63 and/or 63A of the Trustees Act 1958 (Vic) to give effect to the variations sought. The Court declined to do so, saying that ‘conferring on the trustee a power to vary the terms of the trust is neither expedient nor in the management or administration of trust property’2. Additionally, the Court was not persuaded that it was authorised to use section 63A to ‘grant a general power to amend or a power to appoint an appointor.’3
The matter returned to Court and the expansion of the class of beneficiaries was re-addressed.
A new arrangement was proposed which would name the beneficiaries and potential beneficiaries of one family trust as beneficiaries and potential beneficiaries of the other. It was reasoned that a reduction in potential entitlement in one trust should be expected to be accounted for by an increase of potential entitlement in the other trust.4
By applying to Court together, each trustee gave undertakings as to how the trusts would be administered, and those representations gave rise to further possible financial benefits for beneficiaries for whom the Court’s consent was required.5
The Court accepted that the new arrangement was beneficial to the beneficiaries for whom its consent was to be extended and that it was a proper and fair one.
Too often trusts and other entities are established to own substantial family wealth without proper consideration of whether the trust deed and other key documents are fit for purpose, flexible enough to change as circumstances change, and work within the broader succession plan.
Once established, it is critical that ongoing specialist advice is sought to ensure that the trust’s “settings” can do the job that is desired of it.
Moores has one of the largest specialist estate and trust law teams in Australia. Our team is a market leader in designing and implementing complex succession and wealth planning solutions and resolving disputes concerning trusts and estates.
1 Trustee Act 1958 (Vic), s63A.
2 W E Pickering Nominees Pty Ltd & Ors v Pickering & Ors [2016] VSC 71, paragraph 77-78.
3 Ibid, paragraph 60.
4 Re The Pickering Family Trusts [2024] VSC 5, paragraph 84.
5 Ibid, paragraph 92.