Movie exposes real-life pitfalls of estate planning
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THE recent Australian film, Kangaroo Island, offers more than just entertainment according to Mildwaters Byrth Lawyers & Conveyancers estate planning specialist Mrs Kylie Mildwaters.
“I watched it recently because it had been so popular and I wanted to see what all the fuss was about,” Mrs Mildwaters said.
“It walks through one of the most common, and painful, estate planning scenarios I see in my practice.”
The film follows Lou Wells, who left Kangaroo Island years ago to pursue acting in Hollywood, while her sister Freya stayed behind. After their mother’s death, their father Rory manages the family waterfront property. When Rory gathers the family to announce he’s leaving the property to Freya, Lou is devastated. It’s not about money but her connection to home.
“By the end of the movie, you learn that Rory had already transferred the property to Freya during his lifetime,” Mrs Mildwaters explained.
“The property never fell into his estate at all.
“It’s a move with very real legal and financial consequences.”
Mrs Mildwaters said many people wrongly assume the law automatically splits everything equally between children when a parent dies without clear instructions about who gets what.
“It’s one of the most common misconceptions I come across in my work,” she said.
“If Rory had left the property in his estate without transferring it first, Lou wouldn’t have been able to make a constructive trust claim because no promises were made to her.”
However, Mrs Mildwaters noted Lou could have made a claim for “further provision” under South Australia’s Succession Act 2023, arguing she was left without adequate provision for her maintenance or education, if her financial circumstances justified it.
“Rory’s decision to transfer the property beforehand shut that door entirely,” she said.
But Mrs Mildwaters warned the film makes lifetime transfers look deceptively simple.
“Transferring land during your lifetime can trigger a significant stamp duty bill and capital gains tax liability,” she said.
“If you leave land through your will, the capital gains tax obligations generally roll over to the beneficiary — meaning there’s nothing to pay until they sell the property, and no stamp duty either.”
She said sometimes the upfront cost is worthwhile.
“If a family member makes a claim against the estate, the legal costs can end up being even more expensive,” Mrs Mildwaters said.
She emphasised that estate planning intersects with tax law, family law, property law and trust law in complex ways that can be difficult to anticipate.
“Given the many moving parts involved, it pays to work with a specialist committed to keeping their knowledge current,” she said.
Mrs Mildwaters is a full member of STEP — the Society of Trust and Estate Practitioners — a worldwide organisation for specialists in this field.STEP membership requires demonstrated expertise and ongoing specialist education, ensuring members stay current with constantly changing tax rules and government approaches.
“Being part of STEP means I have access to a network of other experts I can draw on when a particular situation calls for it,” she said.
Mrs Mildwaters invited anyone facing estate planning decisions to contact Mildwaters Byrth for a consultation to discuss their specific circumstances; see advert for contact details.
