ByLawyers News and Updates

Assisting clients to manage their affairs – All states

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Assisting clients to manage their affairs

With the threat and uncertainty surrounding the Coronavirus many practitioners will be asked to prepare documents assisting clients to manage their affairs should the need arise.

By Lawyers commentary and precedents for Wills, Powers of Attorney, Guardianship and Directives across every state of Australia are available to help practitioners to respond to these requests.

In brief:

  • A will provides for the administration and distribution of a person’s property in the event of their death.
  • A power of attorney enables a person to empower someone they trust to conduct their legal and financial affairs on request. However, this power ceases should the principal lose capacity to authorise its use. This power can be witnessed by any adult.
  • An enduring power of attorney enables a person to empower someone they trust to conduct their legal and financial affairs without specific authorisation should the principal become unable to conduct their own affairs. Note: This power requires specific witnessing.
  • An enduring guardian or a medical power or an advance care directive. These powers are similar to an enduring power of attorney in that they allow a person to choose someone they trust to manage their health and lifestyle decisions, but not their financial affairs, should they become unable to do so themselves.

Helpful resources

The By Lawyers Wills publications provide detailed retainer instructions which can also be signed as an informal will in emergency situations should the need arise. Otherwise a will should be witnessed by two uninterested parties over the age of 18. The By Lawyers publication provides signing clauses for wills by handicapped, blind, non-English speaking and illiterate testators.

Detailed signing instructions are available and can be emailed to the client with the will should personal attendance at the office be difficult or undesirable.

The guides contain a full suite of wills for single people, people with a partner and for people with blended families. There are testamentary trust wills as well as international wills.

Practitioners will also find a full suite of the other important estate planning documents, for both financial and health & lifestyle matters.

There are practical and detailed commentaries to assist the practitioner to quickly and efficiently advise their clients on any issue of concern to them.  The retainer instructions and ‘to do’ lists ensure thorough and complete attention to all relevant considerations.

For further information

Please don’t hesitate to contact us at askus@bylawyers.com.au

Guardianship – VIC

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Changes to guardianship legislation in Victoria commence on 1 March 2020.

The Guardianship and Administration Act 2019 repeals and replaces the Guardianship and Administration Act 1986 from 1 March 2020.

Described by Attorney-General Jill Hennessy as ‘the biggest changes to Victoria’s guardianship and administration laws in more than 30 years‘, the amendments are aimed at ensuring greater protections for adults with a disability who have impaired capacity to make and participate in decisions that affect their lives.

As a result of the new legislation commentaries in the following By Lawyers Guides have been updated:

  • Probate;
  • Letters of Administration;
  • Wills;
  • Powers and Advance Care Directives;
  • County Court – Acting for the plaintiff and Acting for the defendant;
  • Magistrates Court – Acting for the plaintiff;
  • Supreme Court – Acting for the plaintiff and Acting for the defendant; and
  • Personal Injury.

When announcing the amendments, the Attorney General stated that: ‘The changes reflect a more modern understanding of decision-making capacity and disability, and ensure that a person’s will and preferences are followed where possible and appropriate.’

The updates to our Guides were overseen by our highly experienced author Rossyln Curnow.

By Lawyers are committed to always keeping our subscribers up-to-date.

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.

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.

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