RMBL Decision Makers Dinner - August 2026

The Owies Family Trust

The Victorian Court of Appeal in Owies v JJE Nominees Pty Ltd [2022] VSCA 142 found that a corporate trustee had failed in its fundamental duty to its beneficiaries, and removed it from office. The trust at the centre of the dispute was a family discretionary trust established in 1970 by a husband and wife, both medical professionals, and by the time the matter reached the Court of Appeal it held assets worth more than $23 million.

The couple had three children, but over the years two of those children became estranged from their parents. For almost a decade, the corporate trustee (controlled by the parents and the one favoured child) made distributions of trust income to the family each year while systematically ignoring the two estranged children entirely. No inquiry was made into their financial circumstances. No consideration was given to their position as beneficiaries.

When the excluded children finally went to court, the trustee's defence was straightforward: the trust deed granted absolute discretion, and absolute discretion meant it could distribute to whoever it chose. The Court of Appeal disagreed, finding that absolute discretion is not, in fact, absolute. A trustee exercising a discretionary power must genuinely consider the interests of all beneficiaries, every time a decision is made, regardless of the personal relationships (or the absence of them) between the controllers of the trust and the people it was established to benefit. The trustee was removed. An independent trustee was appointed in its place. The distributions that had been made to the favoured family members were found to be voidable.

The Lessons

1. The words "absolute discretion" in a trust deed do not mean a trustee can simply ignore a beneficiary because the family has a difficult relationship with them.

Every year, at every distribution resolution, the trustee must genuinely turn its mind to the position of every person named as a beneficiary — including the estranged ones, the difficult ones, and the ones nobody wants to think about. If your trust deed names family members you have stopped speaking to, that is a conversation to have with your adviser now, not a problem to leave for your children to inherit.

2. The appointor is the person in the trust structure with the power to remove and replace the trustee. In this case the appointor was the instrument through which one branch of the family maintained control and excluded the others.

Who holds the appointor position in your trust? What happens to that position when you die or lose capacity? Is it documented in your estate plan?

3. A family trust is a legal structure with legal obligations, not a vehicle for expressing your preferences about your children.

The governance of that structure (the decisions about who receives what, and when, and why) needs to reflect genuine consideration of everyone it was established to benefit. And those decisions, and the reasoning behind them, need to be documented. A trustee who cannot demonstrate that it considered all beneficiaries is a trustee that a court can remove.

My recommendation is that you speak to your accountant, your financial planner, and your estate planning lawyer about how your trust is governed, who controls it now, and what the succession plan looks like for both the trustee and the appointor positions.

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The 2nd wife left out of the Will

The Supreme Court of Victoria in Wielicki v Millar [2026] VSC 12 considered what happens when a long marriage is simply left out of a will entirely.

A man and a woman married in 2006 and remained together for eighteen years. Throughout that marriage, the husband's health steadily declined - ultimately terminally. His wife, a medical professional, responded by reducing her working hours and restructuring her career to care for him.

When he died in 2024, his estate was worth approximately $1.5 million. Under his will, not one cent of it passed to his wife. Everything went into a testamentary trust for the benefit of his daughter from his previous relationship.

His wife made a family provision claim, arguing with considerable force, that eighteen years of marriage and years of personal sacrifice in caring for a seriously ill husband had created a moral obligation - one the will had completely failed to honour. The court agreed, finding that the deceased did have a moral duty to provide for his wife. But it dismissed her claim anyway. The reason was financial need. Victorian law requires an applicant for family provision to establish not only that a moral duty existed, but that they are in a position of financial need. The wife had her own assets well in excess of $6 million. The court noted that it is not the role of the court to rewrite a will in order to reward conduct that was meritorious, however genuinely meritorious it was. That is the job of the person making the will, and it must be done while they are still alive to do it.

The Lessons

1. A testamentary trust, however carefully drafted, is not a neutral legal instrument. It is a decision about who matters and who does not. A husband who used a testamentary trust to direct his entire estate to his daughter from a previous relationship made a deliberate choice to exclude his wife of eighteen years from any benefit. That may have been entirely consistent with his intentions and entirely within his legal rights. But his wife did not know the trust existed. She did not know what it said. She did not know why she had been excluded. Whatever his reasons were, they died with him. The document was legally sound. The conversation that should have accompanied it never happened.

2. There are limits on family provision law as a safety net. Many people assume that a long marriage creates an automatic legal entitlement to a share of the estate. It does not - at least not without financial need. It requires both a moral duty and a demonstrated need. Where a surviving spouse is financially independent, the court will not intervene simply because the outcome feels unjust.

If you are in a second relationship and you have made deliberate decisions about how your estate will be structured, those decisions need to be explained, ideally while you are both alive and able to discuss them.

3. A testamentary trust that passes assets to children from a first relationship, bypassing a surviving second spouse, is a legitimate and frequently appropriate planning tool. But it carries risks if it is not handled with transparency.

Consider whether your current partner knows your testamentary trust exists and understands its purpose. Consider whether your adult children from your first relationship understand the competing claims your partner may have. Consider whether the people most affected by your plan have had any opportunity to understand it, let alone respond to it. And consider, more broadly, whether your estate plan reflects the actual relationships in your life as they exist today, not as they existed when you last updated your will. Speak to your estate planning lawyer about whether your current testamentary intentions are clearly documented, appropriately structured for your blended family circumstances, and — most importantly — understood by the people they will affect most.