The Falkholt Tragedy and the Possible Inequity on the Distribution of the Family’s Estates
For many, it will be difficult to ever forget the tragic circumstances surrounding Home & Away actress Jessica Falkholt's death, having passed away following a car accident that also killed her mother, father and sister. A significant lesson that can be taken from the Falkholt family tragedy is the very real need to have your financial affairs in order, especially with regard to a legally valid Will which adequately covers all scenarios, including a calamity such as a complete family wipe-out.
When Coleman Greig's Wills and Estate Planning lawyers are making Wills for clients with young children, it's a 'no brainer' for us to assist the client in making provisions for someone else in the event that the unthinkable does happen, and the entire family perishes in an accident. What the Falkholt tragedy has helped to reinforce is the fact that it isn't just parents with infant or adolescent children who need to have a comprehensive Will.
It is for this reason that our advisors will always ask of those clients with adult children: 'do you ever travel together, or is it likely that you ever will travel together?' If the answer is 'yes', then we urge the client to think carefully about who to nominate as substitute executors and default beneficiaries.
Hypothetically, let's suppose that sisters Jessica and Annabelle Falkholt didn't make Wills (which is highly probable as they were unmarried and in their 20's) and that their parents, Lars and Vivian, made the usual husband and wife Wills which:
- Appointed each other as executors, and one (or both) of their daughters as substitute executors; and
- Left their entire estates to each other, then their daughters equally, and if one or more of their daughters didn't survive, then their grandchildren would take their deceased's mother's share.
Wills along the above lines would be likely to result in a significantly imbalanced distribution of the Falkholts' estates between Lars' and Vivian's respective sides of the family. To explain why, we must first look at the timing of when the members of the Falkholt family died:
- Lars and Vivian died on Boxing Day 2017 in the same motor vehicle accident;
- Their daughter, Annabelle died 3 days after the accident; and
- Their daughter, Jessica died 21 days after the accident.
When 2 people die together and the order of death cannot be determined, the law presumes that the eldest died first. See Section 35 Conveyancing Act 1919 which provides:
"In all cases where two or more persons have died under circumstances rendering it uncertain which of them survived, the deaths shall for all purposes affecting the title to any property be presumed to have taken place in order of seniority, and the younger be deemed to have survived the elder."
Let's assume that Lars was older. This would mean that any and all assets jointly owned by Lars and Vivian would be passed on to Vivian by virtue of survivorship. Those jointly held assets, along with Vivian's other assets (e.g. superannuation, motor vehicles etc.) would then be passed down in accordance with Vivian's Will.
Annabelle and Jessica both died without leaving children, and neither survived Lars and Vivian by 30 days - both of which points are important to note, as Section 35 Succession Act 2006 provides:
"If a disposition of property is made to a person who dies within 30 days after the testator's death, or, if that or another period for survival appears in the will, within the period appearing in the will, the will is to take effect as if the person had died immediately before the testator."
As such, the provisions in Lars and Vivian's Wills fail. There is neither a substitute executor nor a beneficiary, thus the laws of intestacy are invoked.
Who inherits Lars' Estate?
Here, "Lars' estate" essentially refers to assets that he did not jointly own with Vivian, with the answer being that Lars' 3 siblings in Sweden would be set to inherit his estate.
On being forced to deal with intestacy, Chapter 4 of the Succession Act 2006 prescribes who would be entitled to inherit Lars' estate. This chapter prescribes a 'pecking order' for those potentially eligible to inherit a deceased estate:
Not applicable: Vivian is deceased;
- Children (and their lineal descendants)
Not applicable: Jessica and Annabelle are both deceased, leaving no children of their own;
Not applicable: Lars' parents are both deceased;
Solution: As the above options are void, Lars' 3 siblings who reside in Sweden would each be entitled to inherit a 1/3rd share of his estate.
Being equally entitled to his estate, Lars' siblings have the right to apply for Letters of Administration with the Will Annexed, although with this said, as they reside outside of Australia, they would need to appoint someone as their attorney within NSW, for the purposes of making the application on their behalf.
Who inherits Vivian's Estate?
Working through the above pecking order, we are able to come to the conclusion that Vivian's only sibling, who resides in NSW, would be the sole beneficiary. This sibling would thus be entitled to apply for Letters of Administration with the Will Annexed.
Who inherits Jessica and Annabelle's estates?
Simply put, both Lars and Vivian's aforementioned siblings would each stand to inherit _ of their nieces' estates. Within this particular set of unfortunate circumstances, we must again look to the laws of intestacy, and go through the process of elimination in order to uncover who within the family would be entitled to become the inheritor of the sisters' estates.
This is how it might play out:
- Spouse/De-facto Partner
Not applicable: Neither Jessica nor Annabelle had a spouse or de-facto;
- Children (and their Lineal Descendants)
Not applicable: Neither Jessica nor Annabelle had children;
Not applicable: Both Lars and Vivian are deceased;
- Brothers and Sisters (or their issue)
Not applicable: Jessica survived Annabelle by 18 days, but the provisions of s107 Succession Act 2006 provide that beneficiaries need to survive by 30 days;
Not applicable: No surviving paternal or maternal grandparents;
- Aunts and Uncles
Solution: Vivian and Lars' four siblings are each entitled to inherit one quarter of Jessica and Annabelle's estates.
Being equally entitled to Jessica and Annabelle's estates, Lars and Vivian's siblings have the right to apply for Letters of Administration in relation to both nieces' estates, although those siblings residing outside of Australia would need to appoint a local attorney to make the application on their behalf, or perhaps consent to Vivian's sibling making the application alone.
In summary, without knowing the extent of the family's assets or how they held them (there may well have been a family trust in the mix), one can only guess what the end result will be. On the basis of our hypothetical study, Vivian's only sibling is likely to inherit far more than Lars' 3 siblings.
In conclusion, the fact that the above result may not have been what Lars and Vivian intended, nor what Jessica and Annabelle might have intended, shows just how important it is for anyone with assets to have a valid Will which adequately covers all scenarios, including a potential calamity such as what sadly occurred with the Falkholt family's situation.
If you have a query relating to any of the information provided in this article, or you would like to speak with one of our Wills and Estate Planning lawyers with regard to your Will, please don't hesitate to get in touch with: