Asset Rich But Income Poor

The 2009 Victorian Supreme Court case of Unger v Sanchez was famous for opening up the door for claims by non-relatives, a door which Government legislation has tried to close again since 1 January 2015.

That aspect of the decision in Unger v Sanchez is the subject of another case study concerning claims by non-relatives.

Another aspect of that decision concerned the issue of financial need.

The task of the court is often to measure or balance the financial needs of the people in the will against the financial needs of the people claiming they should have been included in the will. This, of course, gives the court a wide discretion.

In this particular case, Mrs Unger had such a worthy claim that her case has opened up the door (thought to have been closed) for claims by non-relatives.

But Mrs Unger’s claim had another obstacle. She and her husband were relatively financially comfortable, especially compared with the next-of-kin, a sister living just above the poverty line in Spain.

However, although Mrs Unger and her husband were asset rich, they had prudently organised their affairs so that their yearly income was modest so as not to excite too much attention from the taxman.

In these circumstances, the Court had no hesitation in making a substantial award in favour of Mrs Unger to assist her to supplement her small income.

The case has wider implications, particularly for farmers who are notoriously often asset rich but income poor.

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