Beware the Notional Estate in NSW Estate Planning – Part 2

April 18, 2021

In part two of our series on Notional Estates, we discuss how certain assets can be vulnerable to a Notional Estates order even if you live outside of NSW.

I live in Queensland so how does this affect me?

Queensland does not have the same provisions in the succession legislation regarding Notional Estates.  If an eligible person brings a family provision application in respect of a deceased’s estate, any Queensland-based assets cannot be made notionally part of a deceased estate by the NSW Supreme Court, provided that the assets were held by a Queensland-based trust or company for more than 3 years prior to your death.

However, if you live in Queensland but have NSW-based assets then those assets are potentially at risk of being included in a Notional Estates order.

What is a NSW-based asset?

When we refer to a NSW-based asset, we don’t just mean an asset that is physically located in NSW, for example, a farm at Boggabilla or a house in Moree.  It can also include an asset which simply has some sort of connection to NSW.

Examples of NSW-based assets for a non-NSW resident include:

• Your entitlements in your superannuation fund if the fund’s registered or “head” office is in NSW.
• Your shares in a company (of which you are the sole-shareholder) if the company’s registered address is in NSW. People generally engage their accountant to set up a company and the accountant’s address is generally used as the company’s registered address.  If your accountant is based in Moree or Inverell, then your company may well be a NSW registered company.
• Assets held in a family trust (of which you are the sole trustee or appointor) if the trust was established in NSW. This is likely to be the case if you used a NSW-based accountant or lawyer to set up the trust.
• Bank accounts which were originally opened in NSW and whose BSB is related to a bank branch in NSW.

How do I safeguard my assets from a Notional Estates order?

The most important thing you can do is to engage in good and careful estate planning with an experienced estate planning lawyer.  This will help minimise the risk of a family provision claim being brought against your estate by a disgruntled family member and your assets being exposed to a Notional Estates order.

For more information, please contact a member of our estate planning team at Fox and Thomas.