Notional Estate in NSW: Why Estate Planning Can Be Different from Queensland

Estate planning can become more complicated when a person has family, property or financial arrangements connected with both New South Wales and Queensland.

One important difference is that NSW has a statutory notional estate regime. In appropriate circumstances, the Supreme Court of New South Wales can treat certain property transactions or assets no longer owned by a deceased person as available for a potential family provision order.

Queensland does not have an identical notional estate regime. This distinction can affect how gifts, trusts, superannuation, jointly owned property and other assets should be considered when preparing or reviewing an estate plan.

What is notional estate in NSW?

In plain English, notional estate is property that may be brought into consideration for a family provision claim even though it is not part of the deceased person’s actual estate at the date of death.

The regime is contained in Part 3.3 of the Succession Act 2006 (NSW). It is designed to prevent the family provision legislation from being defeated by transferring or diverting assets before death.

For example, a deceased person may have:

• Given substantial assets to one family member before death;

• Transferred property to a trust;

• Changed ownership of property from sole ownership to joint tenancy;

• Directed superannuation death benefits away from the estate;

• Arranged for life insurance or other benefits to pass directly to another person; or

• Distributed assets from the estate before a family provision claim was resolved.

These arrangements do not automatically become notional estate. The statutory requirements must be satisfied, and the Court must determine whether an order is appropriate.

The relevant legislation is available through the NSW Succession Act 2006.

When can the NSW Court make a notional estate order?

A notional estate order is not a general power to recover assets for every creditor or disappointed beneficiary. It operates specifically within the NSW family provision framework.

Generally, the Court must be considering a family provision order, or certain related costs orders. The Court must also be satisfied that using property outside the actual estate is necessary or appropriate, such as where:

• The deceased left no actual estate;

• The actual estate is insufficient to provide adequate provision for an eligible applicant; or

• Adequate provision should be made in a way that requires access to property outside the estate.

The Court will generally consider the actual estate first. Notional estate is relevant where the available estate cannot adequately meet the provision ordered, or where the statutory circumstances otherwise justify using property outside the estate.

A notional estate order cannot simply be used to pay ordinary debts, funeral expenses or unrelated liabilities. Its purpose is connected to family provision proceedings.

What is a relevant property transaction?

A key concept in the NSW regime is the relevant property transaction.

Broadly, this concerns an act, omission or transaction that results in property being held by another person or subject to a trust, where the deceased did not receive full valuable consideration.

This can include:

• An outright gift of cash, shares or real property;

• A transfer at less than market value;

• Settling assets on a trust;

• Altering rights connected with an existing trust;

• Changing ownership arrangements;

• Failing to take an action that would have caused an asset to form part of the estate; or

• Certain benefits paid or transferred on or after death.

The timing of the transaction is also important. The legislation contains different provisions concerning transactions occurring within three years before death, within one year before death, and on or after death. The relevant test depends on the circumstances, including issues such as intention, moral obligation and whether the deceased had an obligation to provide for the potential applicant.

The Court does not treat every ordinary lifetime transaction as an attempt to defeat a claim. The particular facts, value of the asset, timing, relationship between the parties and purpose of the transaction may all be relevant.

How can gifts and property transfers be affected?

Gifts are a common part of family life. Parents may assist an adult child with a house deposit, transfer an investment property or provide financial support during their lifetime.

A genuine lifetime gift is not automatically invalid merely because it reduces the estate. However, in NSW, a significant gift or undervalue transfer may need to be considered as part of the broader estate plan.

The risk may be greater where:

• The transfer occurred shortly before death;

• The deceased retained control or use of the property;

• The transfer was made for substantially less than market value;

• There was an eligible person who may later bring a family provision claim;

• The transaction appears designed to reduce the estate; or

• The deceased had a stronger obligation to provide for a potential claimant than to complete the transfer.

Property transfers also require separate consideration of stamp duty, capital gains tax, land tax, mortgage arrangements and capacity issues. Estate planning should not treat a transfer as merely a succession strategy without considering these consequences.

Trusts and notional estate

Trust structures can provide asset protection, flexibility and succession benefits. A testamentary trust created under a Will may also assist with the management of an inheritance for children or vulnerable beneficiaries.

However, a trust does not automatically place assets beyond scrutiny in NSW family provision proceedings.

If property was transferred to a trust as a relevant property transaction, the Court may, in appropriate circumstances, consider whether that property can be designated as notional estate. The outcome depends on the trust structure, the transaction, the timing and the statutory requirements.

This does not mean that every asset held by a family trust becomes part of a deceased person’s estate. A person’s role in a trust must be examined carefully. The person may be:

• A trustee;

• A director of a corporate trustee;

• An appointor or principal;

• A potential beneficiary; or

• Someone who contributed assets to the trust.

Each role can have different legal consequences. Trust deeds, amendments, financial records and transfer documents may all need to be reviewed.

Superannuation and life insurance

Superannuation is often treated separately from a person’s Will. The superannuation fund trustee generally determines who receives a death benefit, subject to the fund rules and any valid binding death benefit nomination.

A superannuation benefit paid directly to a dependant may not form part of the deceased’s actual estate. In NSW, however, certain superannuation death benefits and related arrangements may potentially be considered under the notional estate provisions if the statutory requirements are met.

The same issue can arise with life insurance proceeds, joint assets and other benefits that pass outside the estate.

This is why a Will alone is not a complete estate plan. An effective review should consider:

• The Will;

• Superannuation binding death benefit nominations;

• Life insurance beneficiaries;

• Joint ownership arrangements;

• Trust documents;

• Company structures;

• Loans and financial agreements; and

• The intended treatment of each beneficiary.

How is Queensland different?

Queensland’s succession framework is principally governed by the Succession Act 1981 (Qld). Queensland provides a family provision process for eligible persons who believe adequate provision was not made for their proper maintenance and support.

However, Queensland does not have a regime identical to NSW notional estate legislation. A Queensland family provision claim is generally directed to the deceased’s actual estate and assets or rights that the estate legally controls or can recover.

That does not mean that transactions in Queensland are irrelevant. A transfer may raise other legal issues, including:

• Lack of testamentary or decision-making capacity;

• Undue influence;

• Fraud;

• Breach of trust;

• Invalid execution;

• Unconscionable conduct; or

• A legally enforceable debt or equitable claim.

Those are different legal questions from the NSW statutory notional estate process.

As a result, a strategy that may be relevant to a NSW estate cannot simply be assumed to operate in the same way in Queensland. The location of real property, the place of administration, the deceased’s residence, the governing documents and the nature of the asset may all affect the analysis.

What happens if a person owns property in both states?

Owning property in Queensland and NSW requires coordinated estate planning.

Real property is generally subject to the law of the place where the property is located. The administration of the deceased estate and the treatment of other assets may involve additional jurisdictional considerations.

A person with interstate property should consider:

Practical estate planning steps

People with family or assets connected to Queensland and NSW should consider:

• Making a professionally drafted Will;

• Reviewing the Will after major life changes;

• Obtaining advice about gifts and transfers before completing them;

• Checking superannuation and insurance nominations;

• Reviewing trust deeds and control arrangements;

• Recording the ownership of real property and other major assets;

• Considering the position of spouses, children, former partners and dependants; and

• Keeping copies of important documents where the executor can locate them.

Lightning Legal provides Wills and estate planning services, including professionally drafted Wills, testamentary trusts and related estate planning documents. The firm also provides jargon-free guidance for clients in Queensland and those with interstate circumstances.

General information only

This article provides general information about NSW and Queensland succession law as at 11 September 2026. It is not legal, financial or tax advice and does not determine whether a particular asset can be designated as notional estate.

The application of the NSW regime depends on the facts, the relevant statutory provisions and the evidence available. Anyone considering a gift, trust, superannuation nomination, property transfer or interstate estate plan should obtain tailored advice before taking action.

A properly coordinated estate plan can help identify risks early and reduce uncertainty for executors and beneficiaries.