16 August 2019

After the farm is bought

Wills, Powers, Estates & Family Provision Claims
Federal

Asked

Wills - Gifts with income and liabilities

Where a beneficiary has been specifically gifted property and there is a share-farming agreement in place attached to the property, is the beneficiary liable to pay the rates, water and insurance under the share-farming agreement and also entitled to the share-farming income from the date of death?

Answered

Thank you for the question.

Review the share-farming agreement which may include a clause on the consequences of the death of a party.

The By Lawyers Estates commentary states:

Specific gifts do not carry interest but carry immediate income. All income produced by the property that forms the gift from the date of death belongs to the beneficiary. It follows that the liabilities for the subject property are payable by the beneficiary.

Mentor is not aware of any modern authority; however, Mackie in Principles of Australian Succession Law cites Shaw v Marten [1901] 1 Ch 370 on the point.

Regards

Mentor