Estate planning aims to provide certainty, preserve family wealth, and support generational transition. Where family relationships deteriorate, these arrangements may become the subject of litigation.
McLennan v Kennedy [2026] NSWCA 102, by his tutor, illustrates the legal complexities that can arise when elderly parents seek to reverse established succession plans following changes in family relationships.
Background: Long-Term Family Succession Planning
Malcolm John McLennan (Plaintiff) and Susan Karen Jeannine McLennan (“Karen”) spent almost sixty years building a substantial family asset base that included investment properties, discretionary trusts, family companies, a self-managed superannuation fund, and their family home.
As part of their succession strategy, the plaintiff and Karen progressively transferred responsibility and control to their son, Ruskin Dudley McLennan (First Defendant). By 2014, the first defendant was managing the family’s financial affairs, holding directorships in family companies, acting under powers of attorney, and serving as the corporate trustee of significant family trusts.
The plaintiff’s and Karen’s estate plan clearly intended that the first defendant would assume stewardship of the family’s wealth and business structures after their deaths.
Further Steps in Succession Planning
In 2020, the plaintiff and Karen took further steps to confirm the first defendant’s position. Transferring the role of appointor for the Lakshmi Pty Limited (Second Defendant) to the first defendant, giving him control over significant trust assets. They also transferred ownership of the family home at Bombi Road, MacMasters Beach, to the first defendant, retaining a right of residence for life. These transactions were consistent with the broader succession strategy developed over an extended period.
Change in Family Relationships
Following Karen’s death in 2022, family dynamics changed. The plaintiff’s daughter, Susannah Larissa McLennan (“Susannah”), became more involved in his life and subsequently moved in with him. The plaintiff came to believe that the first defendant had taken advantage of him and that the succession arrangements unfairly favoured him over other family members.
The plaintiff revoked the first defendant’s powers of attorney and guardianship appointments, appointed Susannah in their place, and executed a new will excluding the first defendant and his family. The plaintiff sought to reverse the earlier transfers of control of the second defendant and ownership of the Bombi Road property to the first defendant.
The Unconscionable Conduct Claim
McLennan v McLennan [2025] NSWSC 1603 concerned the plaintiff’s proceedings against the first and second defendant, to set aside:
(1) a deed of appointment by which the plaintiff nominated the first defendant in his place as the appointor of a discretionary trust referred to in the relevant trust deed as “the McLennan Family Trust”, and
(2) a transfer to the first defendant of the plaintiff’s interest in a property at Bombi Road, Macmasters Beach, NSW, which the plaintiff John owned as joint tenants with his late wife, Karen, who died in 2022.
The plaintiff also brought a claim for provision out of Karen’s estate under Part 3 of the Succession Act 2006 (NSW).
Key Legal Issue
The central question is whether these transactions were the product of the first defendant’s unconscionable conduct, as the plaintiff now alleges, or whether they were valid and deliberate steps taken by the plaintiff and Karen as part of a considered succession and estate-planning strategy.
At its core, the case reflects a common tension in family wealth structures: arrangements that once appeared sensible and consensual become contested when family relationships deteriorate, and the original planners seek to regain control of assets they previously transferred.
Parker J found that neither the Deed of Appointment nor the transfer of the Bombi Road property was unconscionable and dismissed the plaintiff’s family provision claim.
(1) refused to set aside a deed of appointment made between the first defendant and the second defendant, by which the plaintiff nominated the first defendant in his place as the appointor of a discretionary trust referred to as “the McLennan Family Trust” (the Lakshmi Trust) in the relevant trust deed;
(2) refused to set aside a transfer to the first defendant of the plaintiff’s interest in a property at Bombi Road, Macmasters Beach, NSW, which the plaintiff had owned as joint tenants with his late wife, Karen, who died in 2022;
(3) rejected a claim for provision out of Karen’s estate in the plaintiff’s favour under Part 3 of the Succession Act 2006 (NSW) (Succession Act): the plaintiff had sought the first two orders from the court below on several grounds. Ultimately, the only one he pursued was that the transactions should be set aside because he had entered into them as a consequence of Ruskin’s unconscionable conduct.
If accepted, these arguments would have permitted the Court to set aside the transactions and restore control of the assets.
McLennan by his tutor Kennedy v McLennan [2026] NSWCA 102
The plaintiff, by his tutor Martyn Xavier Kennedy, appealed, contending that Parker J ought to have found that both transactions were unconscionable because:
(1) The purpose of both transactions was to ensure that the plaintiff and Karen’s daughter, Susannah, would be unable to make a claim on their estates.
(2) Given the value of the estates, neither transaction was necessary to achieve that purpose;
(3) both transactions involved the loss of control over substantial assets for little or no consideration;
(4) The plaintiff did not receive any independent “evaluative advice” on the merits of the transactions; the advice received was confined to their legal effect;
(5) the instructions to proceed with the transactions emanated from the first defendant, who had an interest in obtaining control and ownership of the assets to the exclusion of Susannah;
(6) Contrary to the findings of Parker J, it should be inferred that the plaintiff was emotionally dependent on the first defendant because of their relationship.
Why the Court Rejected the Claim
The Court of Appeal unanimously dismissed the appeal.
The evidence showed that the plaintiff and Karen made a conscious and rational decision over many years for the first defendant to assume control of the family trusts and ultimately inherit the family home.
There was no evidence that the first defendant pressured, manipulated, or persuaded his parents to enter into the transactions.
The Court found no significant cognitive decline that prevented the plaintiff from understanding his actions. The transactions achieved the outcome that the plaintiff and Karen intended at the time.
The Court emphasised that both parents understood that:
- Transferring the appointorship permanently removed the plaintiff’s ability to control the trust.
- Transferring the Bombi Road property gave the defendant ownership while preserving their right to occupy the property during their lifetimes.
Those consequences were not concealed; they were the purpose of the transactions.
The Role of Legal Advice
A significant aspect of the decision concerns the role of professional advice.
The plaintiff argued that he had not received evaluative advice about whether the transactions were wise or beneficial.
The Court rejected any suggestion that the law requires a particular form of advice before a transaction can withstand scrutiny.
The relevant question was whether the plaintiff had the opportunity to obtain advice and understand the legal consequences of his actions.
Given his education, business experience, and cognitive capacity, the Court concluded that the plaintiff was capable of assessing the transactions. McLennan by his tutor Kennedy v McLennan [2026] NSWCA 102 confirms that legal advice is important for removing ignorance of the legal consequences of a transaction. It does not require a lawyer to advise whether a decision is commercially sensible or morally desirable.
Practitioners can support clients by providing plain language explanations of proposed arrangements and their implications. Where appropriate, solicitors should confirm the client’s understanding in writing, for example by asking the client to summarise their intentions or by having the client sign a written acknowledgement of key risks and outcomes.
However, clients are sometimes reluctant to provide written acknowledgements due to privacy concerns, a desire for informality, or discomfort with what may feel like legalistic procedures. In such cases, practitioners may address client hesitancy by explaining the protective purpose of written acknowledgements, reassuring clients that these measures serve to record their wishes and safeguard their interests. Where written acknowledgements are not possible, practitioners should take detailed file notes recording the advice given, the client’s responses, and any reasons for refusing to sign.
Clear communication and documentation of advice and instructions will help practitioners and clients ensure that estate planning decisions are defensible if challenged in the future.
Practical Implications for Estate Planning Practitioners
McLennan by his tutor Kennedy v McLennan [2026] NSWCA 102 provides several practical lessons for solicitors and estate planning advisers.
Comprehensive file notes remain critical. Practitioners should document instructions, discussions regarding family relationships, succession objectives, and the client’s understanding of the consequences of proposed transactions. Key documentation points may include:
– Details of the client’s instructions, including any changes and reasons for those changes
– Discussions about family dynamics, beneficiaries, and any possible sources of conflict
– Notes about why certain individuals are included or excluded from succession plans
– The client’s explanation of their succession objectives and long-term intentions
– Questions and responses to confirm the client’s understanding of the legal and practical effects of proposed transactions
– Evidence of the client’s mental capacity at key decision points
– Observations regarding the presence or absence of potential undue influence
– Confirmation that the client had the opportunity to seek independent legal or financial advice
– A summary, in the client’s own words, of the intended arrangements and any acknowledged risks
Practitioners may use these points as a checklist during client consultations and during file note preparation to support robust, defensible estate planning. Where available, practitioners should consider using standardised templates or checklists provided by their firm, professional bodies, or industry associations. If no such resources are available, it may be beneficial to develop a tailored checklist or template based on the key documentation points identified above to promote best practice and ensure consistency across matters.
Where significant assets or control structures are transferred, it is important to confirm that the client understands these decisions may be difficult or impossible to reverse.
Evidence of capacity and independent decision-making remains central to defending subsequent challenges.
Courts are reluctant to revisit estate planning decisions solely because a parent later changes their mind or family relationships deteriorate.
Conclusion
Succession planning involves decisions regarding control, trust, and stewardship of family wealth. Where such decisions are made deliberately, with advice, and by individuals capable of understanding their consequences, courts generally uphold them.
A subsequent change in intention, even in the context of family conflict, will rarely overturn a carefully considered estate planning strategy. The law protects vulnerable persons from exploitation and respects the autonomy of those who make informed decisions regarding their assets.
Key Practitioner Takeaways:
– Document all instructions, reasoning, and changes clearly and comprehensively in file notes.
– Assess and record testamentary capacity and the absence of undue influence at all key decision points.
– Confirm that clients understand the implications of their arrangements and obtain written acknowledgements where appropriate.
– Encourage or facilitate independent legal or financial advice, particularly where potential conflicts or vulnerability issues arise.
– Remain alert to changing family dynamics and proactively address possible sources of dispute in succession plans.
– Use the principles of disclosure, early communication, and cooperation to clarify issues and potentially resolve disputes before litigation.
Adherence to these practices supports the development of robust, defensible estate plans that can withstand future challenges.
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