WOULD $5.2M make you update your legacy documents?

THERESE Rein, wife of federal Labor leader Kevin Rudd, bought shares with a market value of $5.2million from the estate of her dead business partner for a tenth of their worth.

When the executors of the estate tried to stop the sale, Ms Rein took them to the Queensland Supreme Court until they relented, a month ago.

Ms Rein filed a lawsuit last July in which she argued that Frances Jane Edwards, a former nun and physiotherapist who helped establish Ms Rein's successful company Work Directions Australia, now known as Ingeus, had agreed to sell her 5200 shares in the company if she died.

Ms Rein and Edwards - the founding shareholders in the company - signed an agreement on or about May 22, 1998, declaring that their shares would be sold to the other, for a pre-determined price of $100 a share, if either of them died.

Under the agreement, if Ms Rein had predeceased her partner, her beneficiaries would have received the same amount.

Ingeus had revenues of $175million last year and employs 1300 people in 66 offices worldwide. The company is the third-largest provider of services to the federal Government's Job Network Agency.

Edwards had been ill for more than 10 years when she died, of cancer and renal failure, on January 21 last year. She was 74, and had never married. Edwards's will - which she actioned two days before her death but was too ill to sign - left the bulk of her estate to her sister, Martha Sirovs.

Within weeks of the Supreme Court granting probate to three executors, Ms Rein gave notice, on June 21, of her intention to buy the Ingeus shares in accordance with the agreement and sent a cheque for $520,000 and a share transfer form the following day.

When the executors blocked the sale, Ms Rein asked the court to enforce the terms of the original agreement and award her costs. Ms Rein - who resigned as chair of Ingeus last year but remains on the board and is understood to now have 13,000 shares in the company - withdrew the lawsuit on January 23.

She last night told The Australian the dispute was resolved out of court when the executors agreed to sell the shares for $520,000. "That agreement was upheld to the letter and honoured and the matter was resolved."

The Australian understands Ms Rein owns 13,000 shares in Ingeus worth $13 million, according to a KPMG valuation from June 2004 filed with the court.

The executors, in a defence filed in the court, had disputed the terms of the agreement, and argued Ms Rein had altered the company so much since 1998 the agreement had become void.

Since Edwards signed the agreement, the company has been renamed, three other directors - including former Queensland premier Wayne Goss - had been appointed to the Ingeus board, shares had been sold to nine other parties and the company was no longer a proprietary company. Furthermore, a new constitution filed in 2002 also departed from the terms of the 1998 agreement.

The executors also noted that Edwards's role in the company had changed and the company's profitability had increased, as had the value of the company and its shares, which, at June 30, 2004, were worth approximately $1000 - 10 times as much as listed in the agreement.

Ms Sirovs said yesterday "there is really no problem with the whole situation" but otherwise would not comment on Ms Rein's pursuit of the shares.

The executors' solicitor, Harrold Littler, confirmed the matter had been resolved out of court.

THE AUSTRALIAN FEBRUARY 21, 2007 | Sean Parnell, Brisbane

Australia faces a growing battlefield over the distribution of deceased estates as more complex family arrangements trigger post-death conflicts, and a “sense of entitlement” by family members results in expensive fights over small amounts.

Special counsel at Paxton-Hall Lawyers Sharon Winn said that, in Queensland alone, 80 to 90 small estate family provision claims were lodged in the Supreme Court every month.
Small estates were those valued at about $500,000 and based around a primary asset such as a house.

Ms Winn said disputes were commonly between a second spouse and children from a first marriage, but the large number also reflected changing social attitudes and greater knowledge of court challenge options through legal firms advertising no-win, no fee.

“We’re seeing a distinct change in the estate dynamic,” she said. “People nowadays are more materialistic and have more assets worth more money, so families want their share.

“There (also) seems to be a societal shift to towards a greater sense of entitlement.”

The comments followed the release of a national report this week calling for community and legal re-education to redress the growing cost of conflict and family fracturing off the back of will disputes.

The research, conducted jointly by the University of Queensland, QUT and Victoria University, found 74 per cent of family challenges to wills were successful, but the disputes were known to drain the entire proceeds of an estate.

Further clues to the issue emerged yesterday with the release of survey findings by law firm Slater and Gordon suggesting most Australians did not support funds being left to non-family members. This reinforced the findings of the university report, which found a strong sense of entitlement to “family money” in Australia.

Earlier Slater and Gordon research showed more than a third of Australians had experienced conflict over distribution of assets from an inheritance.

The new research, based on a survey of 2000 people, found 63 per cent of people did not believe that a non-relative was entitled to a significant inheritance even if they visited someone regularly, helped with daily tasks and celebrated holidays together.

Slater and Gordon senior estate planning lawyer Rod Cunich said people needed to be mindful when they were drafting wills of the potential to create family disputes after their death.

“Clearly, these new figures show that the majority of people feel that assets should stay in the family,” he said. “I see quite often many people who don’t have family, or aren’t close to their family members, so they choose to leave their assets to people who they have forged a strong relationship with — and that’s well within their rights.

“But we must remember that in Australia children have the right to contest a Will, so a willmaker should be very clear and concise about how their assets are to be distributed, why, and the likely consequences.”

Ms Winn suggested parties should avoid emotional distress and save money by exploring other settlement avenues such as mediation.

“What people don’t understand is (that) the legal fees surrounding these seemingly small cases can be upwards of tens of thousands of dollars, and that’s before it’s even been to court,” she said. “These cases are labour-intensive, and the same administrative procedures and standard responses need to be followed, no matter how small the estate.”

THE AUSTRALIAN, APRIL 10, 2015, Shane Rodgers, Queensland editor