When someone passes away, their will (if they have one) and the laws of succession usually determine how their assets are distributed. But what happens if a person moves assets out of their estate before death — potentially leaving dependants or loved ones with little or nothing?
This is where the unique Notional Estate provisions under the Succession Act 2006 (NSW) come into play. This legal mechanism allows certain assets to be treated as if they were part of the deceased’s estate, even though they weren’t owned by them at death, so that the court can make Family Provision Orders if needed.
What Is Notional Estate in NSW?
A notional estate is made up of assets that are not technically part of the deceased’s estate at death but can be “clawed back” for the purpose of meeting a Family Provision Claim.
In other words, if someone transferred assets before death — possibly to avoid them forming part of their estate — the Supreme Court of NSW can order that those assets be included for distribution purposes.
The aim is fairness: preventing individuals from sidestepping moral obligations to dependants or close family by moving property or restructuring ownership before they die.
Types of Property That Can Form a Notional Estate
Notional estate in NSW can cover a wide range of assets, regardless of whether they are located in NSW or overseas. Examples include:
- Jointly held property where ownership passes automatically to the surviving joint tenant on death.
- Superannuation death benefits or life insurance payouts, especially where the deceased controlled the nomination.
- Family trust interests where the deceased could have distributed assets to themselves before death.
- Assets gifted or transferred for less than market value within three years before death.
Why Does NSW Have Notional Estate Laws?
The policy purpose is to prevent unfair outcomes in Family Provision cases. It ensures that eligible claimants — such as spouses, children, or financial dependants — are not left with nothing purely because assets were moved before death.
It does not automatically reverse transactions or create new ownership rights. Instead, it gives the court a discretionary tool to restore balance where otherwise an unjust result would occur.
Importantly, notional estate rules only apply if:
- The claimant is eligible under the Succession Act.
- The court finds they have not been adequately provided for.
Only then will the court consider including non-estate assets.
Do Other States Have Notional Estate?
New South Wales is the only Australian state with notional estate laws. While law reform bodies in Victoria and Tasmania have considered them, they decided against introducing such laws, citing concerns over:
- National succession law consistency.
- Increased legal complexity.
How Commonly Is Notional Estate Used?
Although there are no precise statistics on its use, the numbers suggest it is significant. Of around 1,500 probate and succession cases filed each year in NSW, roughly two-thirds involve Family Provision claims. Notional estate is often a central consideration in these disputes.
Case Example: Boyd v Roberts [2024] NSWSC 1310
This case illustrates how notional estate works in practice.
Peter Roberts died intestate (without a will), leaving a second wife, Kerrie, and an adult daughter from a previous marriage, Eliza. Most of his wealth was held in joint bank accounts and superannuation, leaving little in his sole name.
Although there was some evidence Peter wished to leave something to Eliza, nothing was formalised. Kerrie inherited the joint bank account via survivorship, and the superannuation was outside the estate.
The court:
- Determined superannuation should remain with Kerrie for her income needs.
- Ordered $450,000 from the joint account (a notional estate asset) be paid to Eliza in instalments.
This decision balanced both parties’ financial security and applied the notional estate provisions to achieve fairness.
Key Takeaways for Estate Planning
- Notional estate is not a guaranteed solution — it requires court involvement and is discretionary.
- It exists to prevent injustice when assets are shifted away from the estate before death.
- For those with complex family circumstances or significant non-estate assets — such as superannuation, trusts, or jointly held property — careful estate planning is critical.
A well-structured plan can help:
- Ensure your wishes are followed.
- Reduce the risk of court disputes.
- Protect loved ones from legal uncertainty.
📞 Need advice on notional estate or Family Provision claims?
Intergen’s experienced succession law team can guide you through your options and help you put the right strategies in place.
Disclaimer: This article is general information only and not legal advice. You should obtain personalised legal advice for your circumstances.
