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NSW Is Beneficiary Entitled to the Lump Sum Accommodation Deposit?

Discussion in 'Wills and Estate Planning Law Forum' started by Stephanie Leong, 11 January 2018.

  1. Stephanie Leong

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    Hi,

    I would like to know - if a will states that all the monies lodged in the testator's name is to be deposited with any financial institution, does it mean the beneficiary of the will (who is gifted all monies) is entitled to the lump sum payment in deposit made to an aged care home?

    The refund accommodation deposit from the aged care home is like an amount loaned to the facility until such time the person in care is deceased or departs from the aged care facility.

    I have been told that this refund amount is considered to be residue of the deceased estate, however, the asset was always in the form of cash and not converted to another form of asset.

    Any help on this would be greatly appreciated. Thanks in advance.
     
  2. Rob Legat - SBPL

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    It appears you're a little mixed up in your thinking.

    When the testator deceases, during the course of the administration of the estate, the accommodation deposit will be refunded to the executors who must then place the funds into an account with a financial institution. It is available in the division of the estate from the pool of assets - only forming part of the reside if there is anything left over after discharging any specific bequests.
     
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  3. Stephanie Leong

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    Thank you for your reply to my question. I understand that it will be part of the estate, however, which class does this belong to as there are only 2 specific bequests in the will - ie. 1. Real Estate property and 2. all monies deposited in the deceased name with any financial institution?

    Given that the lump sum payment to the aged care home was a deposit held in trust and the agreement was to be refunded upon vacating the aged care home, does it fulfil the bequest of "monies" held in an account?
     
  4. Rob Legat - SBPL

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    I think I understand what you're saying, and take it to mean: There is a specific bequest in the will that says all funds deposited with a financial institution are to go to X. Is X entitled to the aged care home deposit as part of the specific bequest?

    To answer that question: Probably no. The aged care home is unlikely to be considered a 'financial institution', and even if the funds are placed with a financial institution by the home they are unlikely to be held by the institution in the testator's name. The deposit is not an amount 'lent' to the home, it is a security put up by the tenant to guarantee their performance under the contract.
     
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