Giving away any estate bequest and then becoming bankrupt in the next two years can result in Insolvency Service clawing back the gift. It needed High Court intervention to force disclosure of what happened to bequests received by now bankrupt Wayne Gerard Koedyk from his late parents’ estates.
The death of his mother in 2019 triggered distribution of some $615,000 from Mr Koedyk’s parents’ estates following sale of the family home. For each estate, Mr Koedyk is named as executor and beneficiary as to a one-quarter share.
The High Court was told Mr Koedyk was bankrupted in May 2021, three months short of the second anniversary of his mother’s death. In the mandatory financial disclosure subsequently provided to Insolvency Service, Mr Koedyk disclosed he did receive a bequest from his mother’s estate stating: ‘I have relinguished my share in favour of my children.’
Evidence was given that Mr Koedyk has proved evasive in providing details of the amounts and circumstances in which any bequests were passed on to his children.
Justice Wilkinson-Smith ordered Mr Koedyk to file in court a full account of all assets and funds passing through his hands as executor of both his parents’ estates.
On bankruptcy, Insolvency Service took control of all of Mr Koedyk’s assets, including his rights as an estate beneficiary. It is entitled to stand in the shoes of Mr Koedyk as a beneficiary and demand information from Mr Koedyk as an executor, seeking disclosure of his actions as executor, Justice Wilkinson-Smith ruled.
Insolvency Service needs this information to determine timing of any supposed gifts by Mr Koedyk of his inheritances to his children. If within the statutory two year claw-back period, his children can be forced to surrender the gifts received.
Official Assignee v. Koedyk – High Court (15.5.24)
24.124