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David Robert Raymond Napoli v Joan Mary Napoli and Carole Anne Wood as executors and trustees for the estate of the late Mario Robert Napoli [2023] NSWSC 606

David Robert Raymond Napoli v Joan Mary Napoli and Carole Anne Wood as executors and trustees for the estate of the late Mario Robert Napoli [2023] NSWSC 606

In recent case of David Robert Raymond Napoli v Joan Mary Napoli and Carole Anne Wood as executors and trustees for the estate of the late Mario Robert Napoli [2023] NSWSC 606, the Court considered a clause in a will which purportedly declared that a property owned by the deceased was in fact held by him on trust for his mother.  

The Facts

The clause stated that the property had been held on trust for his mother as she had purchased the property from him to assist him and his wife purchase another property. 

At the time the will was made, the deceased had been diagnosed with a terminal illness and was separated from his wife and going through a family law property settlement.  The issue made administration of his estate difficult for his executors as it was not clear whether or not this property was to form part of the estate or what should be done with it. 

The Proceedings

The deceased’s children brought proceedings for declarations in the Supreme Court of New South Wales that the whole of the property was held legally and beneficially by the deceased, and that his mother held no beneficial interest in the property.   

All relevant parties including the deceased’s children (the Plaintiff), the executors (the Defendants), the deceased mother and ex-wife supported the declarations sought.  The deceased’s mother gave evidence that whilst she had gifted the deceased a sum of money, there was never an agreement for her to purchase the property.  The deceased’s ex-wife was also supportive of the declarations being made.  

The court found that the relevant clause did not create a trust in favour of the deceased’s mother, as there was no evidence of any intention to create the trust.  There was no written document recording the trust as is required by law where property is concerned. The other potential explanation for the clause was that it was included in an attempt to exclude the property from the matrimonial asset pool available for division. 

This case demonstrates that where there is any intention to hold property held on trust for another, it should be appropriately documented. Trust documents can also be recorded against the title of a property so that when it is sold, the proceeds are directed to the party who holds the beneficial interest.

For example, we recently handled an estate matter where the deceased had transferred the title of a property to two of his children, however it was always intended that they would hold the property on trust for him.  The trust was appropriately documented and registered against the title so that the property was dealt with and distributed as part of the estate.  

 

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