ByLawyers News and Updates

Family provision claims – SA

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The new By Lawyers Family Provision claims – SA Guide has received its first update. A recent Supreme Court case on joinder has been added.

A solicitor might receive instructions from a potential claimant after the client receives notice, as a person with an interest in the estate, from another claimant who has already commenced proceedings. Plaintiffs in Family Provision claims are required under the Inheritance (Family Provision) Act 1972 to serve other potential claimants with the proceedings.

Those potential claimants may then make an interlocutory application within 28 days of service, seeking to be joined as a plaintiff under s 8(7) of the Act. That section provides that the court may, ‘if satisfied that it is just and expedient to do so’, permit joinder of further claimants at any time prior to the final determination of the proceedings.

The recent Supreme Court case of Columbus v Efstathis & Ors [2019] SASC 149 makes it clear that in considering such an application, the court will in effect need to be satisfied that the applicant has reasonable prospects of success.

In that case the court found there was no reasonable prospect of the applicant, a grandchild of the deceased, establishing any moral obligation on the part of the deceased to have made provision for the applicant out of the estate. Leave for the applicant to be joined as a claimant was therefore refused.

In the course of its determination, the court reviewed the case law on the status of grandchildren with Family Provision claims, affirming the NSW Supreme Court decision of Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 in finding that ‘as a general rule a grandparent does not have a responsibility to make provision for a grandchild in his or her testamentary disposition’.

This useful case has been added to the Family Provision claims – SA Commentary on page 25 under Acting for a potential claimant.

Testamentary capacity

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Testamentary capacity was considered in a recent Victorian Supreme Court case.

The court found In the Matter of the Will and Estate of Joyce Helen Greer, deceased [2019] VSC 592 that the then 95-year-old testator had capacity. Her will in which she made no provision for one of her two adult sons was admitted to probate.

Of importance in the court’s decision was evidence from the lawyer who took the instructions and drew the will. This was not the testator’s usual solicitor. Her long-term solicitor, one of the executors of the will, had referred the testator to another solicitor, a specialist in wills. He had taken comprehensive instructions and made appropriate notes. He also sought a medical report from the testator’s usual doctor.

The evidence of the testator’s doctor impressed the court and it was preferred to evidence from expert medical practitioners led by both parties. The experts gave opinions based on records, but had not seen the testator.

One of the experts noted a ‘…general consensus amongst experts that capacity is task specific and that individuals with cognitive impairment may retain capacity to do many tasks. Even if [the testator] had been suffering from a degree of executive impairment affecting, for example, her ability to regulate her behavior in a social setting, it did not necessarily follow that she lacked testamentary capacity‘. That is an important point for solicitors taking instructions from will makers to bear in mind.

The case includes, at [126] – [133], an analysis of the cases on proof of testamentary capacity. The court noted that ‘The proof required to establish testamentary capacity does not need to eliminate all doubt and a residual ‘doubt’ does not necessarily exclude the existence of testamentary capacity‘.

The statement of Kirby P in Re Griffith (1995) 217 ALR 284, 294 that the freedom of testation includes the freedom to be ‘unfair, unwise or harsh with one’s own property’ was also cited with approval.

This useful case on testamentary capacity has been added to the By Lawyers 101 Succession Answers (NSW) publication. This valuable resource is found in the Reference Materials folder in the Wills, Estates, Family Provision Claims, and Powers of Attorney, Appointment of Enduring Guardian and Advance Care Planning guides.

Suspicious circumstances – Wills – All states

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Suspicious circumstances surrounding the drafting and execution of a will were considered in a recent NSW Court of Appeal case.

The validity of a will can be challenged by those who have standing. These include the people who are affected by it or a previous will. They may suspect the testator lacked the capacity to make the will, or that it was executed under duress, or other suspicious circumstances.

Where a will is executed under apparently suspicious circumstances the onus of proving that nothing untoward occurred is borne by the person propounding the will. Probate will not be granted unless the propounder allays those suspicions.

In Mekhail v Hana; Mekhail v Hana [2019] NSWCA 197 at [147] the Court of Appeal considered the onus had not been discharged, despite the primary judge having granted probate of the will.

The suspicious circumstances in that case included the instructions for the will and a power of attorney having not come from the testator/principal, an unexplained variation of the instructions, the description of the executor/beneficiary as the testator’s ‘daughter’ when they were in fact unrelated, the unwarranted urgency and the subsequent transfer of the testator/principal’s residential property to the attorney for nominal consideration. The case was also complicated by the attending solicitor’s decision to destroy an original file note and create a more detailed version some months later, after having also acted for the attorney regarding the transfer of the property.

The mechanical treatment of the suspicious circumstances doctrine by the first instance judge in this case led the Court of Appeal to suggest ‘a preferred approach’ at [164]-[173], although the court observed that the limits of the doctrine ‘can scarcely be regarded as settled’.

Practitioners should take care to observe and inquire about any apparently suspicious circumstances surrounding the instructions for and the execution of wills and other personal documents. Properly identifying the client is a basic precaution, but enquiring about relationships and motivations may also be warranted. Confirming instructions with the client in the absence of those who might benefit from the documents is also prudent. Clear, accurate, detailed and contemporaneous file notes are always advisable.

This interesting case has been added to the By Lawyers 101 Succession Answers (NSW) publication.

Condition and finding – All states

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A new precedent with example content has been added to all By Lawyers Estates guides. The example content is for an affidavit regarding the condition and finding of a will.

Such an affidavit may be required to satisfy the court as to any issues surrounding the condition an original will is in, or the circumstances by which it was found. This affidavit may be lodged either with an application or in response to a requisition when applying for a grant of probate, or a grant of letters with the will annexed.

This new precedent provides extensive example wording addressing the issues of the will’s condition and finding. The content encompasses evidence to be given by an employee of the firm, the executor, a subscribing witness, or another person who has knowledge of how, for example, marks upon the will are not an indication of revocation.

As with all By Lawyers ‘example content’ precedents, the relevant form can be found immediately above the new precedent on the matter plan. The example content can be modified as required and pasted into the appropriate place in the form.

Family Provision – Widows claims – NSW

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New commentary, including an entry specific to Widows claims, has been added to the Family Provision section of the By Lawyers Reference Guide 101 Succession Answers.

Case note

These enhancements reflect the recent Court of Appeal decision in Steinmetz v Shannon 2019 NSWCA 114. In that case, the Court of Appeal overturned the decision of a single judge where the court had refused to make further provision for the widow of a testator. The deceased left the bulk of his $6,650,000 estate to the adult children of his first marriage. The will gave the widow only an annuity of $52,000. The couple had been together for 28 years.

The Court of Appeal found that leaving a 65-year-old widow, who is capable of managing her own affairs, reliant for the rest of her life on quarterly payments by the children of her deceased husband’s first marriage, with one of whom there had been historical tensions, rather than placing her in control of her own resources, was not an appropriate form of provision. Instead, the Court of Appeal ordered that the widow receive a legacy of $1,750,000, in addition to the annuity.

The judgment includes a detailed analysis of the leading cases on widows claims. Additionally, it considers how the court should balance the competing imperatives of the deceased’s testamentary freedom and the legislative requirements for provision to be made for eligible persons. In considering the applicant’s need for maintenance, education and advancement, the Court of Appeal also acknowledged the relevance of the non-financial needs of the applicant, such as her desire to relocate to a bigger town for better access to medical care.

Publication update

The new section in 101 Succession Answers discusses this Court of Appeal decision and widows claims generally. There have also been related and incidental enhancements made to other sections of the publication. The interactive alphabetical contents list has been updated accordingly to maintain the easy access to content which is the hallmark of all By Lawyers reference guides.

Reference materials

101 Succession Answers covers Powers of Attorney, Appointments of Enduring Guardian, Wills, Estates and Family Provision. This valuable By Lawyers reference guide is located in the Reference Materials folder on the matter plan in each of those publications.

Should you hand over a copy of a will to an attorney under power?

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By Donna Cooper, Ethics4lawyers

Consider the following common ethical dilemma: You have a long standing elderly client whose adult son telephones to say that he’s moving his mother into a nursing home and would like to come in to collect a copy of her will from your office this afternoon. You know the adult son and you are aware of the fact that he is the sole attorney under power for his mother as well as the sole executor of her estate. He tells you that his mother has recently lost capacity and is not capable of managing her affairs. Should you hand over a copy of the will to him when he arrives this afternoon?

‘A power of attorney will not give automatic access to the principal’s will’

The solicitor owes a duty of confidentiality to the principal regarding the principal’s affairs, including a duty to maintain confidentiality over the contents of the principal’s will. The solicitor also holds the physical will document as baliee. The principal-attorney relationship (in common law jurisdictions) has its roots in agency, which is a fiduciary relationship created by equity. Whether or not the attorney (as agent for the principal) is exercising a valid power which is within the scope of the original instrument is the subject of this ethical dilemma.

‘The role of a representative is not an unregulated one nor is the representative’s power unfettered. Many jurisdictions have codified legal and ethical responsibilities such as obligations to act honestly and with reasonably diligence; to exercise powers according to the terms of the instrument and the ascertainable wishes of the principal; to avoid conflict transactions; to keep records; and to keep property separate.’

The Powers of Attorney Act 2014 (Vic) provides that a person ‘may authorise an eligible attorney to do anything on behalf of the person that the person can lawfully do by an attorney.’ There are limitations on this however, for instance, an attorney cannot vote in an election on behalf of a principle, or consent to the marriage of a principal, or make/revoke a will. Given the previously mentioned fiduciary duty of confidentiality owed by the solicitor to the principal regarding the principal’s will, the logical conclusion is then that the attorney is not entitled to see or deal with the principal’s will unless the principal has authorised it, or it is relevant to the management of the principal’s affairs.

The Powers of Attorney Act 2014 (Vic) relevantly states that –

s.21(2) If an attorney under an enduring power of attorney is making a decision about a matter on behalf of a principal who does not have decision making capacity in relation to that matter, the attorney must –

(a) give all practicable and appropriate effect to the principal’s wishes; and …

(c) act in a way that promotes the personal and social wellbeing of the principal, including by …

(iii) respecting the confidentiality of confidential information relating to the principal.

In the above scenario, the request for a copy of the will appears to be to ensure the attorney gives effect to the principal’s (testamentary) wishes by not selling an asset which may be specifically gifted in order to fund her nursing home stay.

Some solicitors may accept the explanation of the attorney and hand over the copy will without making further enquiries. This is not recommended. (A move by a client into a nursing home does not of itself indicate incapacity.)

Making further enquiries is particularly important when there is a suspicion that an attorney could be seeking to abuse their power in some way.

As Ken Aitken states in his classic article ‘Enduring Powers and Wills’:

‘The purpose for which a general or an enduring power of attorney is given is to enable the attorney to manage the principal’s affairs. Any exercise of the power not directed to that end, although it may fall within the language of the instrument, is nevertheless, ultra vires and ineffective.

The principal’s will does not normally have relevance to the management of the principal’s affairs. The attorney cannot alter or revoke the will or make a new will.

The request is [for production of the original will] on the face of it, beyond the power conferred on the attorney. It should be declined unless the attorney can justify the request by satisfying the practitioner that production or inspection of the will, or providing information about its contents, is required for the purpose for which the power of attorney has been granted, namely management of the principal’s affairs.

Inspection of the will or giving information about its contents may be justified where an attorney contemplates the sale of the principal’s assets and wishes to know whether any of the assets is the subject of a specific devise or bequest… The practitioner should judge whether the attorney’s requirements can be met by providing a copy of the will, permitting an inspection of it or providing information about its contents… Unjustified handing over of the will or disclosure of its contents may be a breach of the duty owed by the practitioner to the principal.’

This leaves the attorney with the following options:

  • To hunt around his mother’s house for a copy of the most recent will;
  • To make an application to VCAT for an order for production of a copy of the will (or its original) whereupon VCAT will likely require the attorney to produce a satisfactory reason for wanting it.

It may seem rather ‘over the top’ to require an attorney who appears to have the best interests of the principal at heart, to trot off to VCAT to obtain an order for production of a copy of the will. In some circumstances, a solicitor may be satisfied that there is no intended abuse of the power and may be satisfied that the request is a legitimate one made by the attorney. Queensland Law Society have suggested that a solicitor may in some circumstances, provide verbal advice to the attorney as to whether an asset is subject to a specific gift in the will, but notes that this may create more problems than it solves.

The Victorian Law Reform Commission in 2013 in its Succession Laws Report stated ‘the Commission believes an application to VCAT is more appropriate than giving the holder of the will a power to inform substitute decision makers about the content of a person’s will. A legal practitioner who holds a person’s will is doing so on a strictly confidential basis.’

The guidance provided by Ken Aitken in his article back in 1999 is still considered good advice now, in that the request by the attorney ‘should be declined unless the attorney can justify the request by satisfying the practitioner that production or inspection of the will, or providing information about its contents, is required for the purpose for which the power of attorney has been granted, namely management of the principal’s affairs.’ [Emphasis added.]

More recently, the Law Institute of Victoria’s Ethics Committee considered this issue in an Ethics Committee Ruling R4839 published in 2015:

‘A law firm acted for an elderly lady in various matters.  Over time, the client conveyed very sensitive and confidential information about her fractured family to her lawyers.  She subsequently lost capacity.  One of her sons held an Enduring Power of Attorney (Financial) and demanded that the lawyers release his mother’s “titles, documents, papers and files”. Initially this included her will, but the request for the will was withdrawn.  The certificate of title to her house was released to the attorney’s solicitors to ensure that it was not sold without his knowledge.  However, the demand by the attorney to release all of the other papers and files relating to his mother, including the will file, appeared to be beyond power.  The lawyers were of the opinion that their elderly client would never authorise them to directly release any information to any members of her family, given the sensitivity of the family relationships.  The attorney appeared to consider that his role as representative of his mother permitted him to stand entirely in the shoes of the mother and that he was entitled to instruct the lawyers to do anything that his mother might have instructed.

Ruling

In the opinion of the Ethics Committee and on the information presented

  • The lawyers’ fiduciary duty is to their former client, the donor. An attorney may represent the donor client, but the attorney does not replace the donor client in the client’s relationship with the lawyer.
  • The lawyers retain residual duties to ensure the protection of its former client’s confidential information.
  • The lawyers are entitled to refuse to release the papers, documents and files it holds on behalf of the donor as requested by her Attorney.  (This includes the will and the will file.)’

In 2013, the Law Institute of Victoria Council approved Powers of Attorney Guidelines (which currently require updating post the introduction of the Powers of Attorney Act 2014 (Vic)) but which relevantly state regarding this particular issue:

‘Practitioners who have been requested by the donor to hold his or her will for safe custody are sometimes requested by an attorney to hand over the original will to the attorney. Upon receiving such a request, the practitioner should confirm that it is the wish of the donor to hand over the will to the attorney. If the donor lacks capacity to instruct the practitioner, then, as a general principle, the practitioner should not hand over the original will to the attorney. However, where the practitioner considers that an attorney has made a bona fide request for a certified copy of the will, the practitioner should provide the attorney with either a certified copy of the will or relevant part of the will, or advice as to the content of the relevant part of the will.

For example: the sale by an attorney of a donor’s property which has been specifically devised under a will raises the question of whether or not ademption applies should the property be sold during the lifetime of the donor. For this reason, a request by an attorney for a copy of the donor’s will may be legitimate.’

In our view, a solicitor should review the executed power to see if it is valid and unrevoked (and ensure that there are no contrary conditions contained in the power) and whether it expressly allows the attorney to obtain a copy of the will. If so, then a copy may be provided. If not, then the solicitor should not simply hand over the copy without further verification from the principal-client herself.

If the solicitor determines (through his/her own personal enquiries) that the principal has in fact lost capacity, then this poses an ethical problem for the practitioner. In these circumstances, the duty of confidence over the client’s documents (as set out in Rule 9 of the Australian Solicitors Conduct Rules (‘ASCRs’)), including safeguarding the contents of the will, is the primary fiduciary duty of the solicitor, and must be balanced against the solicitor’s other fundamental ethical duties, namely the requirement to act in the best interests of the client as set out in rule 4.1.1.

If the attorney is not able to satisfy the solicitor that his request for a copy of the will is for a purpose for which the power of attorney has been granted, in our opinion, the solicitor should decline to provide it. However, if the detail requested by the attorney is obviously in the best interests of the principal (ie the client) then giving the required detail may be justified under rule 4.1.1.

There may also be some merit for a solicitor to suggest to a will maker, at the time of making a will, that the will maker provide a written direction to the solicitor that, in the event of losing capacity, a copy of the will could be made available to the named executor(s) upon his/her/their written request.

This can be a tricky area to navigate, and the proper action in any given case will turn on its facts. We recommend obtaining some advice before taking any steps.

Other useful resources:

Seniors’ Rights Victoria, Assets for Care: A guide for lawyers to assist older clients at risk of financial abuse (2012).

https://assetsforcare.seniorsrights.org.au/assetsforcare/wp-content/uploads/Assets-for-Care.pdf

Tip Box

Donna Cooper is an Ethics Consultant with ethics4lawyers and an Australian Legal Practitioner. Donna was previously the Manager of the Ethics & Professional Practice Department at the Law Institute of Victoria and Secretary to the Law Institute’s Ethics Committee.

Donna enjoys assisting legal practitioners with their ethical challenges. ethics4lawyers is available to provide telephone or written ethics advice to lawyers and conveyancers. Call us on (03) 9098 8644 or email admin@ethics4lawyers.com.au.

Fees Update – Supreme Court Probate Office – VIC

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New probate filing fees

On 30 September 2018 the Supreme Court (Fees) Regulations 2018 introduces new filing fees for the Supreme Court of Victoria’s probate office.

The By Lawyers Victorian Estates Guide have been updated to reflect these changes.

NSW – Estates – Can a beneficiary be evicted?

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In the recent case of Kennedy v Kennedy [2018] NSWSC 1087 Davies J struck out a defence and granted liberty for the executors to obtain default judgement and issue a writ of possession where one of five adult beneficiaries had been residing in the deceased’s house for about two years since the date of death, despite being requested by the executors to vacate. His Honour observed that:

[7] In my opinion the defences filed by the defendant do not disclose any defence to the claim by the executors. Where there is no lease in place, except if a claim was made in the nature of some form of constructive trust, it is doubtful if there could be any defence to the right of the executors to get in all of the estate property including by obtaining possession of the land.

It is the duty of the executor or administrator to get in the estate. If necessary the executor or administrator can apply to the court for a declaration and/or a writ of possession.

This applies where a beneficiary is in occupation of real property owned by the estate without permission and refuses to vacate.

This case has been added to the Estates chapter of By Lawyers 101 Succession Answers (NSW).

ACT – Estates – New commentary

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Our ACT Estates publications have been enhanced to include new bespoke precedents – Costs agreement – Probate and Costs agreement – Letters of Administration, which can be found in folder A. Getting the matter underway in each of the respective publications.

These estate specific costs agreements are customised to suit an estate matter:

  • listing the work typically carried out;
  • listing fees and expenses typically incurred;
  • detailing for handy reference in a schedule the Supreme Court filing fees;
  • also providing in a schedule the solicitor administration costs that may be applicable.

With so much less work required these custom costs agreements will save you time on every estates matter.

The commentary in both Probate and Letters of Administration on distribution of the estate has also been enhanced to include a new section When can an executor safely distribute? covering the procedural requirements in the ACT to ensure the executor or administrator is protected.

WA Estates – Subscriber feedback prompts enhanced precedents and commentary

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At By Lawyers we love hearing from our subscribers about content that might improve our publications. A recent subscriber query brought to our attention that, while our WA Estates publication included precedents for notice and consent forms where an application is not made by all executors for probate, it is also sometimes necessary to have the equivalent for letters of administration.

This query prompted a review of the WA Estates Guide by our editorial team, after which By Lawyers have now published the following new or enhanced precedents:

  • Notice and consent forms for persons entitled to apply for Letters of Administration;
  • Consent form where there is no guarantee;
  • Letters to accompany such forms;
  • Letter to beneficiary re executor’s claim for commission;
  • Motion to dispense with the requirement for guarantees;
  • Motion for revocation of grant of probate or administration.

We have also enhanced our WA Estates commentaries with new content including:

  • Who is a beneficiary?
  • Solicitors dealing with beneficiaries when acting for the estate;
  • Challenge to the will by a beneficiary;
  • Vesting of a beneficiary’s interest in an estate;
  • Right to a copy of a will and inventory of assets.

By Lawyers always endeavour to be responsive to our subscribers’ needs. We hope that these improvements will assist not only the firm which prompted them, but all users of our WA Estates Guide.

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