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Application of the Intestacy Rules: Son ends up with family business before father died: Application of the Intestacy Rules

A father and son had each a half share of a family business which they ran, and the father

insisted upon keeping his half share separate because he wanted to benefit the rest of his

family in his Will. By various means the son ended up taking control of the family business,

arguing with the father, and eventually he ended up with full ownership, for nothing. He had

paid for half, but he claimed that the half, formerly owned by the father, was effectively a

gift.

The father had made a Will leaving everything to his other four children and nothing to the

son he shared the business with. The father remarried, but he and his wife were killed in a car

accident on their honeymoon, and he died without a Will.

The circumstances were such that the new wife being deceased has no claim to challenge the

Will, and all of the assets were in her husband’s name anyway. As a result of the Intestacy

Rules the son would take a ¼ share of all the other assets in addition to the family business.

What can the other family do?

Comments by Terry Johansson, Specialist Lawyer

The four children who do not have the family business can contest the Intestacy Rules,

similar to a contest of the Will, alleging that the Intestacy Rules do not treat them fairly.

They would need to show that the brother got more than his fair share of the overall family

assets because of the manipulation of the father’s business, and the Court would take into

account as to whether he had earned the other half of the business. If the son with the

business could show that he had paid for everything, and that there was no unjust enrichment

of any description, then the claim by the other four may fail unless there are assets apart from

the family business. In reality it would probably settle without a court hearing.

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