Case update -adult children challenging a parent’s estate

It is an unfortunate fact of life that family relationships break down – and as a result, the aggrieved family member may alter their Will to remove the other family member as a beneficiary, or only leave them with a nominal gift – even if it is their child.  Whilst it is every person’s right to prepare a Will which reflects their wishes, the excluded person may have the right to make a family provision claim for an entitlement under the Will.

In a recent family provision case (Smith v Smith [2016] NSWSC 1077), the Supreme Court of New South Wales held that 2 of the deceased’s adult children were entitled to grants of $90,000 and $100,000 (when their initial grants under the Will were $30,000 each).

The circumstances of this particular case were as follows:

  • the deceased had 3 adult children – two sons and a daughter;
  • the first son had been estranged from his father for approximately 7 years, although over that time, the son had sent approximately 10-15 text messages to his father, but with no response;
  • the daughter had been estranged from her father for approximately 19 years, although over that time, she had made some attempts to contact her father, but with no success;
  • the second son had a close relationship with the father, caring for him in the last few weeks of his life before he passed away from bowel cancer;
  • in his Will, the father left a bequest of $30,000 to his first son, a bequest of $30,000 to his daughter, some other bequests to grand-children, with the balance of the Estate to be gifted to his second son.

LPPAfter hearing evidence from all parties regarding the difficulties of their relationship with their father, their current financial circumstances, their future financial needs, and the size of the Estate, the Court noted that the breakdown in the relationship was highly likely due to the deceased’s difficulty personality, noting that the children’s limited attempts to contact their father were unsuccessful.  The Court also noted that there was no demonstration by the children of ill-temper or violence towards their father.

Noting the children’s various financial needs, the Court increased the grants to $90,000 and $100,000 respectively (from the initial grants of $30,000).

Interestingly, the Court’s reported decision made reference to a number of comments made by various Judges over the years as to what is an appropriate provision:

Minds may legitimately differ as to the provision that should be made … [W]hat is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight: Grey v Harrison [1997] 2 VR 359 per Callaway JA at 366-367

It involves

… an intuitive assessment: Kay v Archbold [2008] NSWSC 254 per White J at 126

As to what is an appropriate provision can only be determined on a case by case basis, taking into account all relevant facts and circumstances.

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Please contact Shire Legal if you have any questions about drafting a Will to exclude certain family members, or questions about making a family provision claim.

An earlier blog by Shire Legal in relation to family provision claims can be seen here.

 

8 common mistakes to avoid when drafting your Will

When preparing a Will, it is crucial that it is prepared in accordance with the relevant laws – in New South Wales, that law is the Succession Act 2006.  Otherwise, your Will is at risk of being an invalid document, or even capable of a number of different interpretations if not worded correctly, and therefore once you have passed away, your family may not be able to rely upon it as evidence of your wishes as to how you would like your Estate to be distributed.

Common mistakes found in Wills that are home-made, or even Wills that are made using a pre-filled document purchased online, are as follow.

Handwritten Will

Leaving your Estate to your spouse and your children, but not nominating any other beneficiaries

It is an unfortunate possibility that your spouse and your children will pass away at the same time as you.  And if you have not nominated any other beneficiaries in your Will, then you will be considered to have died intestate.

To avoid this, we always recommend that you nominate at least one more group of beneficiaries – whether it is your siblings, closest friends, or even a charity – so that there is at least one person or entity that can receive your Estate in the event that the main beneficiaries have passed away before, or at the same time as, you.

Appointing your spouse as your executor, but not nominating any other executors, or nominating the wrong executors

As per the above example, there is always a risk that your spouse will pass away at the same time as you.  Therefore you should have at least another person, or even 2 more people, nominated as your alternate executors.

The executor is responsible for the administration, distribution, and carrying out of your wishes as set out in your Will.  It is an important job, so you need to appoint someone who is able and willing to take on the role.

Keep in mind, too, that if your Estate will be gifted to your children once they turn a nominated age, then the executor usually also fulfils the role of trustee, and has the responsibility of looking after the assets held in trust for the children until they reach the nominated age.  So considering that the trust relationship may last for a significant period of time if your children are quite young at the time of your death, it may not be appropriate for you to, say, appoint your parents as the executors, because there is an increased risk that they will pass away before being able to fulfil their duties as trustee – it would be more appropriate for you to, say, appoint a sibling or friend as the executor.

Making specific gifts

If you want to leave a specific gift, such as your car or your home, to a beneficiary, then it is risky referring to the specific car (e.g. by detailing the make, model and registration plate) or the specific property (e.g. by its address).  If you no longer own that specific car or property at the time of your death, the gift would fail.  Rather, it is recommended that you describe such assets with reference to the type of asset it is – that is, “any motor vehicle I own at the time of my death” or “my principal place of residence at the time of my death”.

Not specifying a guardian for your children

Under the Guardianship of Infants Act 1916 (NSW), the surviving parent becomes the guardian, unless there are exceptional circumstances or orders in place (e.g. the deceased parent has sole custody).  If the other parent is no longer alive, or able to care for your children, and if you have not nominated a guardian in your Will, then the most suitable person to be the children’s guardian would need to apply to the Family Court for a parenting order under Part VII Division 5 of the Family Law Act 1975 (Cth), to grant them the right to care for the child.  Of course, making an application to the Court could be avoided by nominating a guardian in your Will.

What does your Estate consist of?

Jointly held assets may not be able to be gifted under your Will.  Take this scenario – you own a property with Family Member A as joint tenants, but you would like Family Member B to inherit your entire Estate.  You will be only able to gift to Family Member B those assets that are owned in your name outright, or owned with someone else but as tenants-in-common (in which case you have a distinct share in the ownership).  The rules around joint tenancy provide that upon the death of a joint tenant, the remaining joint tenants automatically become the owners of the property, despite what is provided for in your Will.  Therefore in the above scenario, Family Member A would become the sole owner of the property upon your death.

Not keeping your Will up to date

We always remind clients to revisit their Will every few years, to make sure that it remains current and relevant.  Have any named beneficiaries passed away since you drafted your Will?  Has there been a breakdown in relationships which may warrant appointing different beneficiaries?

The Will has not been signed and witnessed correctly

Not only must a Will be worded correctly, and cover all necessary points, but it must also be signed and witnessed correctly.  Too many times we see Wills that clients have prepared previously themselves, which have not been signed correctly, which have been witnessed by a named beneficiary, or which have been subsequently amended and “initialled” at the time of the amendment – the client believing that such an amendment is valid.

Where is the original Will?

Even if the Will has been drafted, signed and witnessed correctly, it’s not worth anything to anyone if no-one can find it after you pass away.  Ideally, the original Will should be kept in a fire-proof safe, and the location shared with your named executors – as well as some other trusted family members.  Shire Legal is able to hold its clients’ Wills and other important documents in its safe custody, at no charge.

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It is for the above reasons that it is so important to ensure that when drafting your Will, you obtain proper legal advice and have the Will prepared by a lawyer.  Otherwise you run the risk that it is not a valid document, and your Estate may not be gifted in accordance with your wishes.

If you have questions about planning your estate, contact the team at Shire Legal on 9526 3444 or info@shirelegal.com.au

The importance of appointing an enduring guardian

The Grattan Institute has just released a report “Dying Well” noting that although 70% of Australians want to die at home, only 14% end up doing so, with the rest passing away in hospital or aged care facilities.  The report encourages policy and attitudinal change to assist people to “die well” – at home and in home-like environments, surrounded by family, friends and effective services.

Palliative care

Interestingly, the report encourages the wider use of “advanced care plans”, by which someone can give instructions as to the type of health care they wish to receive if they become so seriously ill that they are no longer able to give such direction.

At this stage, advanced care plans have no legal status in NSW – there is no “advanced care plan” legislation nor a prescribed form to use.  At best, the NSW Department of Health has published its Advance Planning for Quality Care at End of Life Action Plan 2013-2018.

The Plan notes that the hierarchy of who can consent to medical treatment for a person incapable of doing so for themselves is as follows (Guardianship Act 1987 (NSW)):

  • the patient’s lawfully appointed guardian (such as a guardian appointed pursuant to an Appointment of Enduring Guardian);
  • If there is no guardian, the patient’s spouse;
  • If there is no spouse, a person who has care of the patient;
  • If there is no such person, a close friend or family member.

It is important to note that only guardians appointed through formal means are permitted to make end-of-life decisions, such as withdrawing life-sustaining treatment (FI v Public Guardian [2008] NSWADT 263).  Hence why appointing an Enduring Guardian is so important.

Both the community and health professionals need to discuss more openly the limits of health care and people’s wishes to die at home.  Without systemic policy change, it is unlikely that such discussions will occur or that services will be reoriented to meet people’s preferences for dying.

– Grattan Report “Dying Well”

Contact Melissa Lammers on 9526 3444 or mlammers@shirelegal.com.au for further information.

Leaving a relative out of a Will

WillFor a whole variety of reasons, some clients choose to leave close family members out of their Wills.  Sometimes it’s because of a long-standing family conflict, sometimes because they feel that a particular family member does not need as much financial assistance as other family members.

Anyone who wishes to do this must understand the laws of succession, which provide that if certain people are left out of a Will, then they have the right to apply to the Court for appropriate orders.

Under the Succession Act 2006 the following people are defined as “eligible persons” who can make a claim of your Estate:

  • your spouse (wife or husband) (including de facto spouse)
  • your child (including child of your de facto relationship at the time of death)
  • your former spouse (including former de facto spouse)
  • your grandchild (if at any time was wholly or partially dependent on the deceased)
  • a dependent (that is, any person who was at any time wholly or partially dependent on you and was at any time a member of your household)
  • a close friend (that is, any person who was in a close relationship with you at the time of death)

The Court then decides whether or not there has been adequate provision made for the “eligible person”, taking into account various factors, including:

  • the size and nature of your Estate
  • the financial circumstances of the eligible person (claimant), including his or her spouse
  • the financial circumstances of all other beneficiaries to the Estate
  • the relative earning capacity of the claimant and beneficiaries
  • your relationship with the claimant
  • the responsibilities and obligations owed by you to the claimant (debts, etc)
  • any contributions made by the claimant to the acquisition, conservation or improvement of your Estate (funding, support, etc)
  • the contributions made by the claimant to the personal welfare of the deceased (medical bills, house modifications, etc)
  • the provision that was already made to the claimant (gifts, etc)
  • the conduct and character of the claimant (criminal record, etc)
  • the conduct and character of the beneficiaries
  • evidence of your testamentary intentions

It is important that if you wish to leave someone out of your Will, despite the risk that they will make a claim on your Estate, then you should prepare a statement explaining your reasons for leaving them out of the Will.  The statement can either be prepared as a clause within your Will, or as an entirely separate document which is kept with your Will but which will not surface unless a claim is made by the aggrieved person.

Shire Legal welcomes Kimberley Glissan

Shire Legal is proud to announce that Kimberley Glissan has joined its team of lawyers.

LPP

Kimberley is an experienced senior lawyer with a strong background in complex litigation.  She brings a combination of legal skill and commercial and business experience to Shire Legal, having had 19 years’ involvement in law as well as previous business experience in the U.S.A. in commercial management and publishing for international corporations and in the cruise industry.

Accordingly, she understands the requirements of small and large business clients.  She has experience in negotiating and litigating contracts, alternative dispute resolution of commercial disputes, as well as construction and administrative law.  She has detailed knowledge of the law of wills and estates and a continuing interest in Elder Law.

Personally, she is careful and compassionate and enjoys working to ensure her clients achieve their desired outcomes.

Kimberley has a Bachelor of Laws and a Bachelor of Arts from the University of Wollongong, and is currently studying a Masters of Applied Law with the College of Law, in the area of Wills, Probate and Estate Planning.

Kimberley can be contacted on 02 9526 3444 or by email kglissan@shirelegal.com.au

Who can see the Will?

WillClients often ask us who is entitled to see a copy of a Will (and obtain a copy of the Will) once the testator has passed away.

The answer can be found in section 54 of the Succession Act 2006 (NSW), which provides a list of categories of persons entitled to inspect the Will:

  • anyone named in the Will (whether or not they are named as a beneficiary)
  • anyone who is named or referred to in an earlier Will as a beneficiary (even if they are not named in the latest Will)
  • a parent, guardian, spouse, defacto partner or child of the deceased
  • a parent or guardian of any child referred to in the Will or who would be entitled to a share of the deceased’s estate if they had died intestate (ie without leaving a Will)
  • any person who would be entitled to a share of the estate if the deceased had died intestate
  • any person (including a creditor) who has or may have a claim at law or in equity against the estate
  • any attorney who held an enduring power of attorney given by the deceased
  • any person who had formal management of the deceased’s affairs under certain legislation

The NSW Registry of Births Deaths & Marriages created a Will Register whereby testators could register the details and whereabouts of their original Will.  However the Registry was discontinued in January 2013, although searches can still be made for Wills registered prior to that date.

Please contact the team at Shire Legal if you have any questions.

Why should I make my will “in contemplation of marriage”? We aren’t planning on getting married ….

….  well, not just yet anyway.

When drafting Wills for clients who are in long term relationships, we always suggest inserting a clause stating that the Will is “made in contemplation of marriage”.  And sometimes the client will respond by stating that they don’t plan on getting married, that they will get married eventually but not just yet etc., so why should they worry about such a clause?

It is crucial to consider the effect of section 12 of the Succession Act 2006 (NSW), which states that:

(1) A Will is revoked by the marriage of the testator.

There are exceptions to this, being:

  • a gift made to your partner; and
  • appointing your partner as your executor.

The rest of your Will, however, would be revoked.  So if you wanted to leave a sum of money or a particular piece of jewellery to a friend or relative, this gift would have no effect.  And further problems would arise if after you married, your new spouse passed away and was not able to take under your Will.  You would effectively die intestate (that is, without a valid Will).

So, even if you are not contemplating getting married, it is always wise to insert a clause stating that the Will is made in contemplation of marriage so that these issues can be avoided just in case you do end up taking a quick trip to Las Vegas!