Australia has eight sets of succession laws, not one. For wealthy families, one difference stands out. In New South Wales, the court hearing a family provision claim can treat certain property outside the estate as part of it. This is called notional estate. Victoria has no general equivalent.
What notional estate means
In NSW, the court can designate property that has left, or never entered, the deceased’s estate. Examples include gifts and transfers made in the years before death, jointly owned property that passed by survivorship, and some superannuation and trust interests. That property can then be used to pay a successful claimant. Planning that moves wealth outside the estate does not necessarily put it beyond a claim in NSW.
The Victorian position
In Victoria, family provision orders are generally made out of the deceased’s estate: the assets that pass under the will or on intestacy. Property held in a discretionary trust, passing by survivorship, or paid directly from a super fund to a nominated beneficiary is generally outside the claim’s reach. That makes structure and ownership decisions especially powerful in Victoria. It also means a claimant may challenge the structures themselves, for example by arguing that an asset was held on trust for the deceased.
Why domicile and location matter
- Where the deceased was domiciled generally determines which law governs movable assets such as shares and bank accounts.
- Where land is located generally determines which law governs it. A NSW property can be exposed to NSW rules even if the owner lived in Melbourne.
- For families based overseas, the Australian assets may be the only part of the estate an Australian claimant can reach. The type of asset, and the state it is in, can change the outcome.
What advisers should do
- Know which states a client’s assets are in, and where the client is domiciled.
- Do not assume that strategies used in one state work in another.
- Plan on the assumption that someone will challenge the estate, and take advice on the specific structures before relying on them.
Frequently asked questions
What is notional estate in New South Wales?
Notional estate is property outside a deceased person’s estate that a NSW court can treat as part of the estate when deciding a family provision claim. It can include gifts and transfers made in the years before death, jointly owned property that passed by survivorship, and some superannuation and trust interests. That property can then be used to pay a successful claimant.
Does Victoria have notional estate rules?
Victoria has no general equivalent of the NSW notional estate rules. Family provision orders in Victoria are generally made out of the deceased’s estate, meaning the assets that pass under the will or on intestacy. Property in a discretionary trust, jointly owned property passing by survivorship and super paid directly to a nominated beneficiary are generally outside a claim, although a claimant may challenge the structures themselves.
Can a NSW property be exposed to NSW rules if the owner lived in Melbourne?
Yes. Land is generally governed by the law of the place where it is located, so a property in New South Wales can be exposed to NSW family provision rules, including notional estate, even if the owner lived in Melbourne. Movable assets such as shares and bank accounts are generally governed by the law of the place where the deceased was domiciled.
Can moving assets out of my estate protect them from a claim?
It depends on the state. In Victoria, assets held outside the estate are generally beyond a family provision claim, although a claimant may attack the structure itself. In NSW, the court can designate property that has left the estate as notional estate. Families with assets in more than one state should plan on the assumption that someone will challenge the estate.
Chua Tan Associates advises families, executors, trustees and their professional advisers on estate planning, estate administration and estate disputes, in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal advice. Victorian law unless stated otherwise.
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