When “Mum owns the house”… but doesn’t Lessons from Application of Burns [2026] NSWSC 413

Inherit Team
4 days ago
2 min read

Estate planners often assume title equals ownership. This case is a reminder that equity may say otherwise.

The facts (in brief)

A son and his partner funded the purchase of a property for his mother to live in. The understanding was simple:

They paid for it
It was put in her name
It would “come back” to them on her death

Early documents supported that:

A will left the estate to them
An enduring power of attorney was granted

But later:

The son died
The relationship broke down
The mother changed her will, leaving everything to her grandchildren
She described the property as a “gift”

The executor sought judicial advice on who should receive the sale proceeds.

The competing positions

Estate (grandchildren):

The property was in the mother’s name
The funds were a gift
Her later will and intentions should prevail

Michelle/Executor:

The property was always intended to beneficially belong to her and the son
The mother was effectively holding it for them

The decision

The Court held the executor was justified in distributing the proceeds to Michelle, based on a common intention constructive trust.

Why?

Three key points:

Common intention: The parties intended the property to “come back”
Reliance: The son and Michelle funded the purchase
Unconscionability: It would be unfair for the estate to deny their interest

Crucially, Later changes of mind did not undo the earlier arrangement.

Why the estate lost

A will cannot defeat an existing equitable interest
Calling it a “gift” later didn’t change what was intended at the time
Legal title ≠ beneficial ownership

Key Lessons for Practitioners

Estate planning advisors should take the following practical steps from Application of Burns:

Document intentions contemporaneously: Ensure clients record agreements about beneficial ownership at the time property is acquired, preferably in writing and supported by solicitor file notes.
Recognise risks in informal family deals: Arrangements relying on “it will come back to you in my will” can create constructive trusts that bind future estates, even if later wills attempt to benefit different beneficiaries.
Value contemporaneous evidence over later statements: Courts prefer evidence created near the time of the transaction. Later changes of mind or family disputes carry less weight.
Address underlying equitable interests when updating wills: Before preparing new wills, thoroughly investigate any prior family contributions to major assets and consider whether constructive or resulting trusts may exist.
Consider foreign investment and title issues: Where properties are placed in Australian names to comply with foreign buyer rules, ensure the equitable arrangement is properly documented and reflected in estate planning documents.
Seek judicial advice where uncertainty exists: Executors and advisors can obtain s 63 Trustee Act protection when faced with competing claims based on historical family agreements.

In conclusion, Application of Burns reminds us that estate planning is not only about drafting the latest will but also about uncovering and managing equitable interests created years earlier. Review your current client files for similar family-funded property arrangements and consider whether additional documentation or advice is required to protect all parties.

Take action today: schedule a trust and equity audit for your high-net-worth clients to ensure their estate plans align with both their current wishes and any historical understandings.