Q: When is $3 million not enough?
A: When you are the secret daughter of a mining magnate.
Michael Maynard was a Western Australian mining billionaire who died in 2012, survived by his fourth wife and three adult children.
Olivia Mead, dubbed by the media as Maynard’s secret daughter, was born in 1995 to a woman with whom Maynard had a relationship but hadn’t married. As she grew up, Olivia Mead did not have a close relationship with her father, seeing him only sporadically. Maynard did not provide Olivia or her mother with any material support other than the legislated child support requirements. Olivia Mead challenged Maynard’s will, alleging that she was not left adequate provision in the will.
Maynard had set up a trust for Olivia, in which she was left $3 million. To put this inheritance into perspective, the three children from his marriage were each left about $400 million.
Did Olivia Mead have the right to challenge the will?
The children of a will maker have the right to challenge a will if they haven’t been ‘adequately provided’ for in a will. In this case, the judge remarked: “what is adequate depends on the circumstances of the case - the size of the estate, the nature of the relationship between the claimant and the deceased, the claimant's present circumstances and other legitimate claims.”
As the daughter of Maynard, Olivia Mead did indeed have the right to challenge the will.
The trust for Olivia Mead
Maynard established a trust specifically for Olivia, in which he specified that she would receive a property worth about $700,000 and cash and property worth up to $3 million. The trust would give the inheritance to Olivia on the date she turned 30 and included some idiosyncratic terms and conditions. The trustee of the trust was a solicitor whom Olivia Mead had never met, but who had total discretion and control of the trust.
The Judgement
The judge was heavily critical of the terms of the trust, which would have denied Olivia Mead anything had she been convicted of drink driving or if she changed her religion. Until the age of 30, Mead had absolutely no say in the operation and discretion of the trust. The judge points out that: “But this [trust] structure does not guarantee the plaintiff $3 million. There is a real prospect she might get nothing.”
The judge was also critical of the choice of trustee, a man whom the plaintiff had never met yet exercised almost total financial control over her.
The judge relied on actuarial evidence to determine what Olivia Mead would need in provision for her lifetime. He did reject Olivia’s assertions that she needed provision for a $250,000 guitar, saying : “No one needs a guitar of that value - particularly a 19-year-old girl who is not now and never will be a professional musician and who has not had guitar lessons for some years.” However, the judge did go on to say that he felt Olivia was not a greedy or narcissistic individual, but rather a 19-year-old girl who had let her imagination run wild.
Ultimately, the judge awarded Olivia Mead the sum of $25 million, which was due to be paid within 60 days. The figure was based on the actuarial evidence, but the judge admitted that it was largely a discretionary sum, saying:
“The one factor which has influenced me most is the size of the estate. This award will set up the plaintiff and her children and perhaps their children for their lives. Wisely invested the fund will provide enough income so the plaintiff and her relatives will never want for anything again. All that against a background of the award making no difference whatever to the position of the other beneficiaries.”
What can we learn from this?
Will makers are obliged by the law to make adequate provision for family members, including spouses, children, grand-children, step-children and in some cases others who might be ‘dependent’ upon them.
And the larger the estate the greater the chances of an applicant being entitled to more. Sometimes the wisdom is not what's in the will, but in how the wealth is owned.
Bryan Mitchell is an Accredited Specialist in succession law (wills and estates including estate planning).