Introduction

The forfeiture rule is a critical legal principle in New South Wales that prevents individuals from benefiting financially or otherwise from unlawfully causing the death of another person. This rule, ensures that justice is served by barring offenders from inheriting from the deceased’s estate, whether through a will or intestacy. It applies not only to direct benefits but also to indirect gains, such as through life insurance policies or other entitlements.

This guide provides essential information and practical guidance on the forfeiture rule, focusing on its application in contested wills and estates. It explores key aspects such as the legal foundation of the rule, how it affects inheritance rights, and the role of executors in navigating these complex situations. By understanding the forfeiture rule, individuals involved in estate planning or disputes can better appreciate its implications and the need for informed legal advice.

What the Forfeiture Rule Is in NSW Wills & Estates

Definition and Legal Foundation

The forfeiture rule is a legal principle that prevents a person who has unlawfully caused the death of another from benefiting financially from that death. This principle is supported by both common law and the Forfeiture Act 1995 (NSW).

Under the Forfeiture Act 1995 (NSW), the Supreme Court of NSW can decide whether to apply or modify the rule based on several factors:

Factor Considered by the Court	Description / Relevance
Conduct of the offender	Examines whether the killing was premeditated or accidental.
Conduct of the deceased	Considers any actions by the deceased that may have contributed to the situation.
Impact on other beneficiaries	Assesses how applying the rule affects other involved parties and their inheritance.
Other relevant matters	Includes considerations such as the offender’s mental illness or broader public policy.

Importantly, the rule applies even if the offender is not criminally convicted, as the burden of proof in civil cases is lower (on the balance of probabilities).

The Rule’s Context in Wills & Estates

The forfeiture rule specifically applies to wills, contested wills, and cases of intestacy (where there is no will). If a beneficiary or potential beneficiary unlawfully causes the death of the testator, they are barred from inheriting any part of the estate.

This prohibition includes:

• Direct benefits: The offender cannot inherit under the will or through intestacy laws
• Indirect benefits: The offender’s relatives or others connected to them may also lose their entitlements if they indirectly benefit from the unlawful act

For example, if a person is convicted of unlawfully killing their spouse, they cannot inherit from the spouse’s estate, even if they are named as a beneficiary in the will. Similarly, if a beneficiary kills another beneficiary, they may lose their share of the estate, which would then pass to other beneficiaries.

The rule also applies in cases where the offender is found not guilty by reason of mental illness. Courts may still apply the rule if justice requires it, considering factors such as the nature of the killing and the offender’s mental state.

In summary, the forfeiture rule is a critical legal principle in NSW that ensures justice and fairness in the distribution of estates, preventing individuals from benefiting from their unlawful actions.

Application of the Forfeiture Rule in Contested Wills

Unlawful Killing & its Impact on Inheritance

The forfeiture rule plays a significant role in contested wills, particularly when unlawful killing is involved. This legal principle ensures that individuals who unlawfully cause the death of another person cannot benefit from the deceased’s estate, either directly or indirectly.

The forfeiture rule applies in cases where a beneficiary has unlawfully caused the death of the testator or another beneficiary. This includes situations involving murder, manslaughter, or other unlawful acts that result in death. For example, if a person is convicted of murdering their spouse, they would be barred from inheriting any property or benefits under the spouse’s will.

Key considerations in such cases include:

Circumstance	Application of the Forfeiture Rule
Murder	The rule applies absolutely, and the offender is entirely precluded from inheriting.
Manslaughter	The court may modify the rule based on the specific circumstances, such as the absence of intent.
Mental Illness	If the offender is found not guilty by reason of mental illness, the court may still apply the rule if justice requires it.

Preventing Direct and Indirect Benefits

The forfeiture rule is not limited to direct benefits, such as inheritances. It also applies to indirect benefits, such as those that pass to the offender through another person, like a relative.

For instance, if a beneficiary is disqualified under the forfeiture rule, any share that would have passed to them may instead be:

• Distributed among other beneficiaries
• Held in trust

The court’s primary goal is to ensure that the offender does not profit from their unlawful actions, while also protecting the interests of other beneficiaries.

If you are involved in a contested will or have concerns about the forfeiture rule, it is essential to seek legal advice to understand your rights and obligations.

Key Factors for Applying the Forfeiture Rule

Conduct of the Offender & Deceased

Courts in NSW consider the behaviour and actions of both the offender and the deceased when determining whether to apply the forfeiture rule. This includes examining the nature of the killing, the relationship between the parties, and any provocation or circumstances leading to the death.

For instance, if the deceased was a victim of prolonged domestic violence, the court may view the offender’s actions differently than a premeditated killing. Additionally, the court assesses whether the offender showed remorse or if there were any mitigating factors, such as mental illness, that may have influenced their actions.

Key factors include:

Factor	Guiding Question for the Court
Nature of the killing	Was the act premeditated, spontaneous, or accidental?
Conduct of the deceased	Did the deceased provoke the offender or contribute to the circumstances?
Offender’s mental state	Was the offender suffering from a mental illness or acting under duress?
History of violence	Were there prior incidents of violence or abuse between the parties?

Impact on Beneficiaries & Public Policy

The court also evaluates how applying the forfeiture rule would affect other beneficiaries and whether it aligns with public policy. This evaluation includes considering the financial and emotional impact on innocent parties, such as children or other dependents of the offender.

Public policy considerations ensure that the rule is applied in a way that maintains fairness and justice in society. By balancing these factors, courts aim to achieve a just outcome that reflects both legal principles and the broader interests of justice.

Key considerations include:

Consideration	Guiding Question for the Court
Effect on other beneficiaries	Would applying the rule leave dependents of the offender without financial support?
Proportionality	Is the forfeiture of inheritance a fair and proportionate outcome for the offence committed?
Public perception	Does applying or modifying the rule uphold community standards of justice and fairness?
Alternative outcomes	Are there other ways to distribute the estate fairly without rewarding the offender’s wrongdoing?

The Executor’s Role in Applying the Forfeiture Rule

Determining the Rule’s Application

The executor plays a crucial role in determining whether the forfeiture rule applies when a beneficiary is involved in unlawfully causing the death of the testator or another beneficiary. This process requires careful assessment of the circumstances surrounding the death and thoughtful evaluation of whether the rule should be applied.

Key steps the executor may take include:

Executor’s Step	Description
Assessing the evidence	Reviewing the facts of the case, including criminal charges or convictions, to determine if the rule is applicable.
Seeking legal advice	Consulting with legal professionals to understand obligations and implications due to the rule’s complexity.
Obtaining a court order	Applying to the Supreme Court for a declaration, as seen in Re Settree Estates; Robinson v Settree [2018] NSWSC 1413 (“Robinson v Settree (2018)”), especially if the application is disputed.

For example, in the case of Robinson v Settree (2018), the executor sought a court order to apply the forfeiture rule after the defendant unlawfully killed the testator. The court ultimately made a conditional forfeiture order, allowing the defendant to receive a reduced share of the estate.

Redistribution of Estate Assets

Once the forfeiture rule is applied, the executor must redistribute the estate assets among the remaining beneficiaries. This process ensures fairness and prevents the offender from benefiting either directly or indirectly from their unlawful actions.

When redistributing assets, the executor must consider:

Consideration	Executor’s Action
Identifying remaining beneficiaries	Determining who is legally entitled to a share of the estate after the offender is disqualified.
Adjusting distributions	Modifying the asset distribution plan to reflect the removal of the offender’s share.
Protecting other beneficiaries	Acting in the best interests of all beneficiaries by ensuring the redistribution is fair and transparent.

For instance, in cases where a beneficiary is disqualified under the forfeiture rule, the executor may need to redistribute the offender’s share among other beneficiaries or hold the share in trust for other parties.

By carefully navigating both the application and redistribution process, the executor ensures that the estate is administered in accordance with the law and the principles of justice.

Modification & Discretionary Application of the Forfeiture Rule

Mental Illness & Unintended Outcomes

The forfeiture rule in NSW may be modified in cases where mental illness or unintended outcomes are involved. Under the Forfeiture Act 1995 (NSW) courts have the discretion to adjust the rule’s application if justice requires it. This is particularly relevant when an offender is found not guilty by reason of mental illness.

For example, in Robinson v Settree (2018), the court made a conditional forfeiture order, allowing the offender to receive a reduced share of the estate held in trust. This decision balanced the public policy of preventing unjust enrichment with the offender’s mental health and dependency on social security.

Judicial Discretion in Modifying the Rule

Courts in NSW have significant discretion to modify the forfeiture rule based on the specific circumstances of each case. This discretion is exercised to ensure fairness and justice, particularly in cases involving manslaughter or where the offender’s actions were not entirely premeditated.

For instance, in Wang v Estate of Wang; Lu by his tutor Fang v Lu [2021] NSWSC 717 (“Fang v Lu (2021)”), the court modified the forfeiture rule to allow the husband to inherit the estate after being convicted of dangerous driving causing the wife’s death. The court considered both the financial contributions of the husband and the modest size of the estate in making this decision.

By allowing for modifications, the court ensures that the forfeiture rule is applied flexibly, balancing the need to prevent unjust enrichment with the practical realities of each case.

Conclusion

The forfeiture rule is a critical legal principle in New South Wales that ensures individuals who unlawfully cause another person’s death cannot benefit from the deceased’s estate. This rule, applies to both direct and indirect benefits, such as inheritances or life insurance proceeds. The Forfeiture Act 1995 (NSW) provides courts with the discretion to modify the rule’s application in cases involving mental illness or other mitigating circumstances. Executors play a crucial role in determining whether the rule applies and redistributing estate assets fairly among remaining beneficiaries.

If you have questions or need assistance navigating the complexities of the forfeiture rule or any other aspect of wills and estates, contact the experienced wills & estates lawyers at PBL Law Group. 

Frequently Asked Questions