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101 Succession Answers – NSW

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Following an author review new cases have been added and other enhancements made to the By Lawyers Reference Manual 101 Succession Answers (NSW).

Nobarani v Mariconte [2018] HCA 36

This case supports the requirement of an ‘interested’ party wishing to challenge the validity of a will to show that they have rights which will be affected by the disputed grant of probate or administration.

Re Estates Brooker-Pain and Soulos [2019] NSWSC 671

Considerations regarding disclosure of documents and information in contested probate proceedings were extensively discussed. This case analysed the applicable law, practice and procedure in the context of applications to set aside subpoenas and notices to produce which called for documents relating to the making of the disputed wills. This included solicitors’ notes and files. The interplay between subpoenas, the court’s Practice Note SC Eq 11 and case management orders was examined in detail.

The court addressed the determination of ‘legitimate forensic purpose’ in such cases, especially where pleadings had not closed and the issues in dispute were uncertain. This decision has therefore been added to the By Lawyers Reference Manual 101 Subpoena Answers too.

The court also commented on the practice of sending ‘Larke v Nugus’ letters to ‘…a person involved in the preparation or execution of a will…[seeking] disclosures about the circumstances in which a will was prepared or executed’.

Application of NSW Trustee & Guardian; Estate of Dudley Keith Vaughn [2019] NSWSC 850 and In the Estate of Hansie Hart [2019] ACTSC 317

These two recent cases each dealt with issues relating to the presumption of death.

Gregory Joseph Mills as trustee v Julie Elizabeth Mills and Ors [2018] NSWSC 363

This case is instructive as to the considerations the court applies when giving judicial advice and determining construction issues on testamentary trusts.

Finnegan & Anor v Garner & Ors [2019] QSC 100

Here the estate faced claims which, if they were resolved by litigation would result in the estate being consumed by legal costs. The court noted, at [10], that:

It is the duty of trustees of the estate not to embark upon expensive litigation which will have the effect of depleting the estate. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand Gummow ACJ, Kirby, Hayne and Heydon JJ said that: “a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings.”

Koellner v Spicer [2019] NSWSC 1571

On a family provision claim, an adult child with a medical condition and meagre financial resources was awarded a 35% legacy from the reasonably small estate even though the deceased had expressly excluded him on the basis they had no relationship.

Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843

The court emphasised, including by reference to the ‘overriding principles’ of the Civil Procedure Act, the duty on parties to contain costs in family provision litigation. The court heavily criticised disproportionate costs being incurred.

 

Like all By Lawyers Reference Materials, 101 Succession Answers (NSW) is updated regularly to cover developments in case law and procedure.

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.

Homemade wills – NSW

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The Supreme Court of NSW recently considered homemade wills in Jones v Robinson & Ors [2019] NSWSC 932.

Particularly in question was the appropriate interpretation where ambiguity existed in the document.

The Court affirmed the ‘well accepted’ principles from Justice Isaacs in Fell v Fell (1922) 31 CLR 268 on the construction of wills and further noted that:

‘With any homemade will the language used will often be informal, but the plain meaning of words should not be ignored. Moreover the instrument has to be viewed as a whole. Inaccuracies or inconsistencies should be looked at so as to best preserve a testator’s intention and that approach should be a predominant consideration in the construction of the instrument’.

In determining that the testator’s failure to deal with the residuary of her estate did not create an intestacy, the Court stated that ‘The mere fact that the creator of a homemade will did not contemplate every legal contingency or the potential of residue does no more than highlight that the maker is not a lawyer’.

Of course the mere fact that ambiguity existed and an expensive court case was required to resolve it, tends to support the value of wills drafted by lawyers over homemade wills. The By Lawyers Wills publication contains carefully drafted wills precedents, a library of additional clauses and practical commentary written by experienced lawyers, to assist practitioners who are preparing wills for their clients. The By Lawyers Wills publication also includes the By Lawyers Reference Guide 101 Succession Answers – to which Jones v Robinson has now been added.

Wills commentary – VIC

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The By Lawyers Wills commentary in our Victorian Wills publication  has been updated with the following recent cases:

The discussion of costs in the commentary has also been updated in line with The Practitioner Remuneration Order, revised as at 1 January 2019.

The Land Tax section in the commentary has also been updated with regard to:-

  • Administration may be deemed by SRO to have been completed in many circumstances even where the land has not been distributed/transferred to beneficiaries – LTX Trust Form 18 Deceased estate – which relates to both commencement and completion of administration
  • All transferees of residential property in Victoria must complete a Digital Duties Online form purchaser statement.

We are grateful for the assistance of Roz Curnow, our learned Victorian Wills & Estates author, with these commentary updates.

Informal wills – VIC

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The threshold allowing the Registrar to deal with informal wills pursuant to the powers under s 9 Wills Act 1997 has been increased from $150,000 to $1,000,000.

Rule 2.09(b) of the Supreme Court (Administration and Probate) Rules 2014 has been amended by the Supreme Court (Chapters II and III Miscellaneous Amendments) Rules 2019.

The Registrar may exercise the powers of the Court under s 9 if satisfied by affidavit that all persons who would be affected consent to those powers being exercised by the Registrar, or, if consent is not given, the deceased person died leaving property not exceeding $1,000,000 in value.

The amendment comes into effect on 25 March 2019.

The commentaries in the By Lawyers Victorian Estates publication for both Probate and Letters of Administration can provide assistance with informal wills.

Attempts to expressly disinherit eligible persons – 101 Succession Answers NSW

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The recent case of Re Estate McNamara [2018] NSWSC 1661 reinforces the position that attempts by testators to expressly disinherit eligible persons in wills do not prevent the eligible person from either bringing a Family Provision claim, or from succeeding in an application for provision, or additional provision, from the testator’s estate. At 55 Lindsay J comments:

Upon an examination of the facts of the case from that perspective, and viewing the totality of the relationships between the deceased and her sons and their respective families, the deceased’s testamentary disclaimer of an intention to benefit the plaintiff is not an absolute bar to the making of a family provision order in his favour. 

The deceased provided an extensive and clear direction in her will that her adult son not receive provision out of her estate. Notwithstanding this express intention, the adult child was awarded $75,000 out of the estate, although that sum was severely limited given the circumstances – see at 66:

Had the plaintiff had a consistent, supportive and loving relationship with his parents, (more particularly, his mother) throughout his life he would have a greater claim to his mother’s bounty than he has now.

The court’s discussion in McNamara should be considered by practitioners when drafting wills for clients who are seeking to disinherit eligible persons. Clients should be advised that any such attempt may not be effective and by providing instructions to draft such a will they may only serve to burden their estate with the costs of Family Provision litigation.

The By Lawyers 101 Succession Answers (NSW) reference guide has been updated to include this case.

New precedents – Wills creating single testamentary discretionary trust

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Helpful new precedents have been added to all By Lawyers Wills publications for an individual, or a couple, to establish a single testamentary discretionary trust.

These precedents augment our existing precedents which create multiple testamentary discretionary trusts and make for faster and easier drafting where only one testamentary discretionary trust is required.

The new precedent, which is found in the Wills creating testamentary discretionary trust folder, was suggested by a subscriber. We love receiving feedback from firms who use our precedents and we are pleased to provide additional precedents where required.

 

New article by Donna Cooper on Wills and POAs – VIC

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By Lawyers is pleased to be able to share with you Donna Cooper’s article, Should you hand over a copy of a will to an attorney under power?, published in the Reference material folder in our Will, Powers and Estates VIC publications.

Donna’s article commences:

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 a 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?

Donna’s article considers:

  • the duty of confidentiality a solicitor owes to the principal;
  • the application of the Powers of Attorney Act 2014 (Vic) to various scenarios;
  • the options available to a solicitor when approached by an attorney seeking access to the principal’s will; and
  • guidance including the 2013 Succession Laws Report from the Victorian Law Reform Commission and Ethics Committee Ruling R4839, published in 2015 by the Law Institute of Victoria’s Ethics Committee.

Donna Cooper is an Ethics Consultant with ethics4lawyers and an Australian legal practitioner. Donna’s very practical and considered article first appeared in the Institute of Legal Executives September-October 2018 journal, The Legal Executive.

Wills – Avoiding family provision claims

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Clients often require advice on avoiding family provision claims, when considering their estate planning.  New commentary has been added to the By Lawyers Wills Guides concerning the issues that should be considered when drafting a will in circumstances where a family provision claim against the estate of the testator appears possible.

This new commentary considers two common issues raised by testators when giving instructions for wills:

  1. How to leave their estate to their partner and prevent children or step children from making a claim on the estate; and
  2. How to leave the estate to their partner, whilst ensuring their children by a prior relationship are benefited on the death of that partner.

The commentary discusses some general principles from the cases and provides a range of likely outcomes for a number of classes of claimants under family provision legislation, which will assist practitioners when they are advising clients who are deciding how to distribute their estates to best avoid a potential claim.

In essence, while there is no absolute way of avoiding a family provision claim by an eligible person against a testator’s estate, appropriate consideration when preparing a client’s will can minimise the prospects or quantum of any claim, or at least ensure the testator has a clear understanding of the issues.

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