As set out in earlier posts, and with thanks to the Television Education Network, today’s post considers the above mentioned topic in a ‘vidcast’ at the following link - https://youtu.be/sVKhCJ87BpI
As usual, an edited transcript of the presentation for those that cannot (or choose not) to view it is below –
Mr Pratt allegedly died with a wife, some kids with that wife, and then perhaps two other spouses that were based in New South Wales. Those two spouses then made various challenges against Pratt’s estate.
One of the challenges related to assets owned via a family trust.
The structure involved a trustee company that had no individual shareholder.
The shareholder of the trustee company was another trust. That trust was ostensibly for Richard Pratt. The parties accepted that this was the case and that he had ultimate control of the trust beneficially and probably legally.
Importantly, that trustee company was setup in Victoria.
The trustee company was then a trustee of a standard family trust, other than this point, and that is Richard Pratt himself was not a potential beneficiary of the trust.
This trust then owned shares in a holding company.
That holding company was also a Victorian-based company.
That holding company owned 100% of the shares in a further subsidiary company. That subsidiary company owned New South Wales property, being I think an apartment where one of the additional spouses was living at Richard Pratt’s expense.
The argument of the spouse focused on the fact that in New South Wales, if you’ve got any asset in New South Wales, even if you died in another jurisdiction, the notional estate provisions can apply.
Like many business owners, Richard Pratt didn’t have many assets that passed under his will. Thus, there wasn’t a lot to be gained from trying to challenge the will, unless the notional estate provisions applied. If they did, then assets of the trust (being the shares in the company group that owned the apartment) would essentially be deemed to form part of the will.
What the court did was went through the notional estate provisions and methodically stepped through each aspect of the structures Pratt had put in place.
Despite the apartment being located in New South Wales, the structure used meant there was nothing else that created a nexus between the deceased, being Mr Pratt, and the New South Wales notional estate rules. In other words, the assets could not be attacked.
** for the trainspotters, ‘Beat It’ should need no introduction - watch hear (sic) and ask yourself if you can sing the chorus without swapping the lyrics to ‘eat it’ (also watch Weird Al’s remake below) -
MJ - https://www.youtube.com/watch?v=oRdxUFDoQe0
Weird Al - https://www.youtube.com/watch?v=ZcJjMnHoIBI