Millie Phillips, once Australia’s richest woman, creates chaos over her Will

Millie-Phillips

Millie Phillips, the head of International Mining Corporation, made her fortune through nickel.Source:News Corp Australia

The dirty laundry of a wealthy Sydney family has been aired in court during a battle over the colourful 90-year-old matriarch’s multimillion-dollar fortune.

Millie Phillips was once considered to be Australia’s richest woman, according to The Sydney Morning Herald , and today she has an estate worth up to $110 million.

Mrs Phillips, who migrated to Australia from Poland as a child, is a self-made woman, originally setting up a boarding house in Ashfield in Sydney’s inner west in the early 1960s after borrowing a modest sum of money.

At the time, the Holocaust survivor was a single mother of three young children following the implosion of her marriage.

Then, in 1968, she invested in a tin mine, and ended up amassing staggering wealth during the nickel boom and becoming the head of International Mining Corporation.

Now she’s worth tens of millions, and has lucrative assets including a sprawling property in Kurrajong Heights near the Blue Mountains, paintings, business interests and other valuables.

But the question of who to leave her millions to is a complicated one.

Mrs Phillips has two surviving adult children who are aged in their early 60s, Sharonne and Robert.

Her third child, Lynette, died in 1978 after setting herself on fire in an act of “self-immolation” outside the United Nations headquarters in Geneva, Switzerland.

The young woman was a member of the controversial Ananda Marga religious sect – the same group that was initially linked by police to the 1978 bombing of the Sydney Hilton Hotel.

At some point over the years, Mrs Phillips and her son had a serious falling out, and today they have little to “no relationship”, the court heard.

Her relationship with her surviving daughter also became strained after Sharonne and Robert discovered in September 2017 that their mother had secretly transferred their sister’s remains from Sydney to a cemetery in Israel.

As a result, the court heard the relationship between mother and daughter had “not been easy”.

Then, in April 2018, Mrs Phillips had a stroke that left her needing “a high degree of care for daily living” which she receives at a nursing home in Rose Bay, where news.com.au understands she remains in a stable condition.

But Mrs Phillips repeatedly refused to sign a will before her stroke, leaving the division of her massive fortune up in the air, a Sydney court has heard.

In legal documents seen by news.com.au, stunning details of the extent of the family feud are revealed.

Before her stroke, Mrs Phillips had already decided she did not want her son to inherit anything, due – at least partly – to a dispute over a property in Bronte in Sydney’s east.

But she did want to leave some money for his five children, as well as her daughter Sharonne and her 25-year-old son, Anthony Small, and other friends, relatives and organisations.

However, she was concerned about ruining her grandson’s drive and ambition with a large inheritance, telling a lawyer: “You hear about rich grandchildren who don’t do anything with what they’ve been given and waste it and others do good with it.”

Mrs Phillips was repeatedly warned by her legal representatives that if she did not sign a will, her estate would be divided between her two adult children after her death despite her wishes.

She repeatedly clashed with her lawyers, which Mr Small conceded could have been the result of her “quarrelsome personality”.

But he disputed the finding made by a judge that his grandmother was “given to bouts of paranoia” or had a “paranoiac fear that she was being manipulated by others attracted by her wealth”.

THE BATTLE

The court heard that in May 2017, Robert Phillips visited his mother at her request, only to be told “you didn’t stop the Bronte sale and you are not my son”.

However, she also asked to see her son’s five children, although a meeting with some of them “did not go well”.

Then, in February 2018, Mrs Phillips arranged a dinner with Mr Phillips’ five children at Tetsuya’s Restaurant.

But during the dinner, Mrs Phillips gave “an unpleasant speech”, telling those grandchildren, “I don’t know any of you people” and words to the effect of “you’ve all missed out considerably, and Anthony will do a lot better”.

Despite this, some of them continued to meet up with their grandmother, and the court heard that spending time with them was a great source of “pride and joy”.

THE OUTCOME

Earlier this month, the NSW Court of Appeal ruled in favour of an application made by Mr Small to create a will on his grandmother’s behalf based on earlier versions of her will.

Mr Small’s application under the Succession Act was not opposed by any other member of the family, and now Robert Phillips will inherit nothing, although each of his five children will receive $1 million each.

Mrs Phillips’ former housekeeper and friend will receive $250,000 and her sister $500,000.

Sharonne Phillips will inherit $5 million while Mr Small will receive a $25 million property near Bathurst in NSW including a Bunnings store which generates around $1 million annually.

The mother and son will also share the Kurrajong Heights property and a number of paintings, while the rest of Mrs Phillips’ estate will be divided between Israel’s Tel Aviv University, Sydney’s Jewish Museum and the Millie Phillips Jewish Fund.

Mr Small told news.com.au he believed a good outcome had been achieved.

“I think the will is a good reflection of my grandmother’s wishes, (as) a Holocaust survivor who narrowly escaped the Nazis in the 1930s and held a lifelong passion about fighting anti-Semitism,” he said.

“It was this shared passion and my immense respect for my grandmother which motivated me to bring the application initially. I am glad that I have been able to honour her in this way and that her legacy will be upheld.”

He said he and his mother had “always been a big supporter” of Mrs Phillips’ philanthropy, and that he pair remained “incredibly close”.

“The dispute largely arose because my grandmother suffered a stroke before she had time to get her affairs perfected to her standards, and was unhappy with some of the actions of her solicitors in forming the initial draft,” Mr Small said.

“I and others have gone to great efforts to ensure she receives the respect she deserves after working so hard and having such an impact as a self-made woman who has given so much service to the community through her businesses and extensive philanthropy despite immense adversity.”

THE EXPERT

According to wills and estates special counsel Joanne Carusi from Barry Nilsson Lawyers, the main issue in this case was Mrs Phillips’ failure to get her affairs in order before her stroke rendered her incapacitated.

“If you don’t have a will, you die intestate, which means the state determines how your estate will be divided through a formula set in every state,” she told news.com.au.

“It is vitally important to have not only a will but also an enduring power of attorney. If you lose capacity and are in a coma (for example) you need a trusted person to make those decisions for you medically and financially, which is revoked upon death.

“Delays are dangerous in estate planning – that was the problem here.”

MILLIE PHILLIPS’ SCANDALS

Mrs Phillips’ messy family life isn’t the only scandal she has been involved with over the years.

In 1974 she was charged with insider trading, although the case was later dropped.

In 2008, an inquest into the death of Donald Fairbairn, a patient at Mrs Phillips’ Yagoona Nursing Home, was held after a nurse allegedly injected him with 10 times his prescribed dose of insulin, The Sydney Morning Herald reported at the time.

The court heard Mrs Phillips “verbally attacked” Mr Fairbairn’s daughter, telling her, “This is your fault we’re having this inquest. He was old and going to die … You’re not going to get any money – he was worth nothing. He was old and sick anyway.”

Mrs Phillips was banned from attending the rest of the inquest.

And in December 2017, Mrs Phillips’ nursing homes lost their government accreditation, with the Blue Mountains Gazette reporting the Ritz Nursing Home at Leura failed 30 of 44 performance markers.

‘Safety must come first in family law’: Legal groups reject merger plan

Family-law-reformA coalition of more than 60 legal organisations has urged the federal government to abandon a plan to scrap the Family Court as a stand-alone entity, warning that a proposed courts merger risks the safety of child and adult victims of family violence.

Attorney-General Christian Porter is at loggerheads with the country’s peak body for the legal profession, the Law Council of Australia, over his controversial plan to merge the specialist Family Court of Australia with the lower-level Federal Circuit Court.

The FCC hears some family law disputes alongside a raft of other cases, including migration matters.

In an open letter to Mr Porter, released on Monday, more than 60 organisations including the Law Council and peak bodies Women’s Legal Services Australia, Community Legal Centres Australia and National Aboriginal and Torres Strait Islander Legal Services urged the government to return to the drawing board on family law reform.

“The safety of children and adult victims-survivors of family violence requires increased specialisation,” the letter says. “The proposed merger serves only to undermine that important need.”

The signatories say “safety must come first in family law” and they “welcome further consultations on alternative models of structural, holistic reform to benefit children, families and victims-survivors of family violence”.

“We prefer a model that retains a stand-alone specialist superior family court and increases family law and family violence specialisation,” the letter says.

Nerita Waight, co-chair of National Aboriginal and Torres Strait Islander Legal Services, said the reforms would “disproportionately impact the most vulnerable including Aboriginal and Torres Strait Islander children and families who need the most support”.

In a report released in April, the Australian Law Reform Commission said the majority of family law cases in federal courts now involved violence, child abuse or other complex factors.

It said up to 70 per cent of parents in family law proceedings reported their children had been exposed to family violence, and almost one in five said they had safety concerns either for themselves or their children, or both.

In a speech in August, Mr Porter rejected claims the merger would lead to a loss of specialisation or  spell “the end of the Family Court”, and said the court would continue to exist as a division of the new Federal Circuit and Family Court.

Under his initial plan, existing Family Court judges would have been housed in division one of the new court but no further judges would have been appointed to that division. In a bid to secure crossbench support for his plan, he agreed to a permanent “floor” of 25 judges in division one.

Angela Lynch, spokesperson for Women’s Legal Services Australia, said the lack of a stand-alone specialist court would make it “much easier” for future governments not to replace specialist judges.

“Government-commissioned inquiry after inquiry has recommended increasing specialisation in both family law and family violence, including the recent Australian Law Reform Commission  review of the family law system,” she said.

Mr Porter says the merger will improve efficiency in cases and help clear a backlog of about 20,000 matters, a claim disputed by the Law Council.

He attempted to pass a bill to give effect to the merger before the May 18 election but was unable to win sufficient support from the Senate crossbench to bring on a vote.  Mr Porter announced in August he would revive the plan and the legislation is expected to be reintroduced to Parliament before the end of the year.

In a speech last week,  Law Council of Australia president Arthur Moses, SC, accused the federal government of adopting a “stubborn and wrong-headed approach to family law” that will hurt children and families.

Mr Porter retaliated by saying “Arthur Moses’ approach falls into Einstein’s definition of madness – doing the same thing over and over again and expecting a different result”.

On Sunday Mr Moses said “the time has come for Attorney-General Porter to stop making derogatory remarks against those who oppose this misconceived and wrong-headed proposal”.

“Rather he should listen and engage in a mature manner with those raising concerns as they know this area of the law better than any member of the government. It is too important to get wrong,” he said.

Death duties (Inheritance taxes) in Australia are Inevitable, says expert

Death duties (Inheritance tax) in AustraliaAustralian taxpayers are “bound to” be hit with an inheritance tax, a financial adviser has said, pointing to similar policies in the UK and US.

Chief of financial advice firm Stanford Brown, Jonathan Hoyle, said an inheritance tax was an inevitability in Australia as the country’s current position was unusual and unsustainable.

“The UK has very punitive rates of inheritance tax, I’m sure they’ll come here. In Europe we’re seeing [a] wealth tax… it’s bound to happen,” he said, naming inter-generational envy a problem.

“The Coalition’s decision to limit the amount of tax-free superannuation is the start of making super less attractive for everybody but particularly the very wealthy and we expect to see many more measures that will limit the amount of money in tax-free super.”

The next step will be an inheritance tax.

He said that as an adviser, he works with high net-worth clients who begin considering their retirement in great detail in their 50s.

“Retirement planning is a three-decade process – for couples in their 50s, this [plan] is going to last a long, long time.

“One of the things that’s probably going to happen [during their retirement] is an inheritance tax. That’s about 40 per cent in the UK, so you’ve probably got to get used to the idea that there will be an inheritance tax here.”

Australia abolished death duties in 1979 due to their relatively low exemption thresholds, poor consideration for the effects of inflation and the challenges they could place on widows and family businesses like farms.

While the United Kingdom’s 40 per cent inheritance tax rate is high, those in Japan face 55 per cent levies. However, in Italy the tax rate is relatively lower at just 4 per cent.

A fatally unpopular ‘policy’

While Hoyle believes an inheritance tax in Australia is inevitable, it’s politically unpalatable.

This year’s election saw the Labor Party hit with misinformation over incorrect claims it had plans to introduce the tax, despite it having no such policy.

Treasurer Josh Frydenberg claimed the Labor Party had plans to introduce the policy.

“Given Labor is already proposing to tax Australians from the cradle to the grave, it is certainly not out of the question that Labor would consider taxing people beyond the grave,” Frydenberg said in January.

A scare campaign on Facebook also went viral, with Labor ultimately writing to the social media platform asking it to take action on the viral content.

Current Inheritance Tax in Australia

According to the Australian Taxation Office website, “There are no inheritance or estate taxes in Australia.” However, the site also states that “There may be some tax obligations for beneficiaries, depending on the nature of any distribution they may receive.”

According to H&R Block, if you reside in Australia and you receive inheritance money from abroad, beneficiaries do not need to pay additional taxes unless specified by the executor. However, if you end up investing any of the income that you receive from the estate, your earnings may end up being taxable.

Even though Australia currently does not have an inheritance tax, there are some specific financial transactions that may still be taxed. Following an individual’s death, his or her estate could keep making an income from things like interest on savings accounts, capital gains from asset sales, or dividends from stocks. In these cases, a trust tax return will be due on any of the income that is taxable, and the tax has to be handled by the beneficiaries or the executor named in the will. A trust tax return must be filed every year until the estate is fully administered, meaning all assets have been distributed to the beneficiaries. If the estate is resolved during the year of death, there are some exemptions from the trust tax return if the income thresholds are low enough.

It is also important to note that inheritance law will vary between territories and states throughout Australia. You should get in touch with your local Public Trustees office to determine the rules that apply to your territory or state.

Individuals who live in Australia and are unclear of their taxation responsibilities can check the Australian Taxation Office’s website. You should also contact a qualified accountant to have all of your questions answered and to ensure you pay any necessary taxes when they are due.

What Can I do to Minimise Taxation on my Inheritance?

There are actions you can take to minimise the impact of having to pay tax on your inheritance.

The first action to take is to seek expert legal advice on the potential taxation that you may be required to pay on your inheritance.

For example, in the case of inheriting the family home, a sale of the property within 2 years can ensure that you are not liable for any Capital Gains Tax. Other actions can be taken to minimise your taxation exposure and an expert Wills and Estates Lawyer will be able to walk you through the options available to you.

You can also take actions to minimise any taxation that your beneficiaries may be liable to pay. This can include checking your superannuation policies on what beneficiaries are included in the definition of “dependent” and therefore not liable to pay any tax if they inherit your superannuation funds. It may also include exploring options on setting up a Trust for your beneficiaries which can also minimise the amount of taxation payable.

Related Family Law Judgments

 

Invitation to make a submission – Inquiry into Australia’s Family Law System

joint-committee-family-lawOn 19 September 2019, the Parliament established the joint-committee-family-lawJoint Select Committee on Australia’s Family Law System. The committee is to present its final report by 7 October 2020.

I am writing to draw your attention to the inquiry and to invite you or your organisation to make a submission to this inquiry. Submissions are due by 18 December 2019.

A copy of the committee’s terms of reference is attached and further information on the committee’s inquiry is available on the committee’s website. There is no requirement to address the full terms of reference in your submission, and you may choose to comment only on the terms of reference that are of interest or relevance to you.

As the committee is seeking to publicise its work as widely as possible, we would appreciate you referring this letter of invitation to any colleague or organisation you think would like to contribute to the inquiry. The committee has also developed a submission template for individuals to assist them in making a submission to the inquiry and address the terms of reference.

The committee prefers submissions to be submitted online. Alternatively, submissions may be sent by email to familylaw.sen@aph.gov.au as an attached Adobe PDF or MS Word format document, or in hard copy to the address below. E-mailed and hardcopy submissions should include your name, phone number and postal address (in the email, not the submission) so that we can verify them and/or contact you.

Please note that on receipt, submissions become committee documents and are made public only after a decision of the committee. Publication of submissions includes uploading them to the internet where they are available to the public, including to the media and other interested stakeholders.

The committee will normally make submissions public unless there is a request for confidentiality. If you would like your submission, or part of it, to be kept confidential, please make this request clear in the submission.

Any person making a submission must not release the submission without the approval of the committee. Submissions are covered by parliamentary privilege; however the unauthorised disclosure of a submission is not protected.

Information on Senate Committees, including notes to assist in the preparation of submissions is available at: http://www.aph.gov.au/Parliamentary_Business/Committees/House/Making_a_submission

If you have any questions about making a submission, or about the inquiry more generally, please contact the Committee Secretariat on familylaw.sen@aph.gov.au or on (02) 6277 3439.

Yours sincerely
Ann Palmer
Committee Secretary

 

Terms of Reference
That a joint select committee, to be known as the Joint Select Committee on Australia’s Family Law System, be established to inquire into and report on the following matters:

  1. ongoing issues and further improvements relating to the interaction and information sharing between the family law system and state and territory child protection systems, and family and domestic violence jurisdictions, including:
  2. the process, and evidential and legal standards and onuses of proof, in relation to the granting of domestic violence orders and apprehended violence orders, and
  3. the visibility of, and consideration given to, domestic violence orders and apprehended violence orders in family law proceedings;
  4. the appropriateness of family court powers to ensure parties in family law proceedings provide truthful and complete evidence, and the ability of the court to make orders for non-compliance and the efficacy of the enforcement of such orders;
  5. beyond the proposed merger of the Family Court and the Federal Circuit Court any other reform that may be needed to the family law and the current structure of the Family Court and the Federal Circuit Court;
  6. the financial costs to families of family law proceedings, and options to reduce the financial impact, with particular focus on those instances where legal fees incurred by parties are disproportionate to the total property pool in dispute or are disproportionate to the objective level of complexity of parenting issues, and with consideration being given amongst other things to banning ‘disappointment fees’, and:
  7. capping total fees by reference to the total pool of assets in dispute, or any other regulatory option to prevent disproportionate legal fees being charged in family law matters, and
  8. any mechanisms to improve the timely, efficient and effective resolution of property disputes in family law proceedings;
  9. the effectiveness of the delivery of family law support services and family dispute resolution processes;
  10. the impacts of family law proceedings on the health, safety and wellbeing of children and families involved in those proceedings;
  11. any issues arising for grandparent carers in family law matters and family law court proceedings;
  12. any further avenues to improve the performance and monitoring of professionals involved in family law proceedings and the resolution of disputes, including agencies, family law practitioners, family law experts and report writers, the staff and judicial officers of the courts, and family dispute resolution practitioners;
  13. any improvements to the interaction between the family law system and the child support system;
  14. the potential usage of pre-nuptial agreements and their enforceability to minimise future property disputes; and
  15. any related matters.
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