Mitchells Solicitors https://mitchellsol.com.au We're on your side. Fri, 22 Sep 2023 04:12:51 +0000 en-AU hourly 1 https://wordpress.org/?v=6.4.3 https://mitchellsol.com.au/wp-content/uploads/2018/02/cropped-favicon-1-32x32.png Mitchells Solicitors https://mitchellsol.com.au 32 32 The Perils of Executor Disputes and the Importance of Choosing Wisely https://mitchellsol.com.au/the-perils-of-executor-disputes-and-the-importance-of-choosing-wisely/ https://mitchellsol.com.au/the-perils-of-executor-disputes-and-the-importance-of-choosing-wisely/#respond Fri, 22 Sep 2023 04:12:50 +0000 https://mitchellsol.com.au/?p=2880 Estate administration can be an intricate and emotionally charged process, which is only exacerbated when disputes occur among executors. The recent Queensland case of Re Franks [2021] QSC 134 is a real-life example highlighting the challenges of estate administration and how the process can be disrupted when executors don’t agree.

William, a testator, passed away in July 2020, leaving behind a will dated January 2018. The will designated Jennifer and Peter as executors, with Patricia initially being the third executor before she renounced her role. There were 31 beneficiaries named in the will, including a sister, five adult children, and multiple grandchildren.

The main issue in this case was the profound disagreement and conflict between the two remaining executors, Jennifer and Peter. These disputes revolved around crucial aspects of estate administration, from the sale of assets to the payment of insurance premiums and the handling of unpaid rates and liabilities, and even the need to open an estate bank account.

The estate’s complexity made matters even more difficult. It included real estate properties, a boat, shares, farming equipment, vehicles, and a commercial fishing license. Legal disputes arose within the family, with David, a beneficiary, filing an application for further provision from the estate, further delaying the administration process. Ultimately, they had been unable to reach a consensus on how to administer the estate.

As a result, Jennifer initiated legal proceedings to remove both herself and Peter as executors of the will. She believed that their inability to cooperate effectively and efficiently in managing the estate necessitated their replacement.

One critical concern for the court was the potential conflict of interest between Peter, acting as an executor, and his personal interests in relation to potential liabilities to the estate. This raised questions about the impartiality of his estate management. Furthermore, the court was concerned that Peter had initiated actions without consulting Jennifer, and in certain instances, proceeded with his own proposals even in the absence of consensus with Jennifer.

In light of the ongoing conflicts, lack of cooperation, and the inability to reach a consensus on vital estate administration matters, the court decided to appoint an independent administrator. This decision was guided by the best interests of the estate and its beneficiaries, despite the testator’s initial choice of executors. The potential cost of an independent administrator was deemed necessary to address the administration challenges effectively.

This case illustrates just how significant the repercussions of choosing the wrong executors can be. It can lead to arguments, legal battles, and delays in asset distribution, which can ultimately strain family relationships and increase the financial burden on the estate.

Selecting the right individuals as your executors is not a decision to be taken lightly. It requires careful consideration of their qualities, capabilities, and their ability to work harmoniously. By choosing wisely, you can safeguard the efficient and accurate execution of your final wishes, minimise potential conflicts, and provide your loved ones with peace of mind during an emotionally challenging time.

When planning your estate, consult with an experienced solicitor who specialises in wills and estates, who can guide you in making the right executor choices and ensure that your assets are managed and distributed as you intend. Your choice of executors can leave a lasting legacy of ease or difficulty for your loved ones, making it a decision that deserves thoughtful attention.

Written by Sally Scott


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Leaving Your Success Story To The Next Generation (And Their Spouses). Aronis v Aronis [2022 ] QSC 39 https://mitchellsol.com.au/leaving-your-success-story-to-the-next-generation-and-their-spouses/ https://mitchellsol.com.au/leaving-your-success-story-to-the-next-generation-and-their-spouses/#respond Tue, 14 Jun 2022 23:25:31 +0000 https://mitchellsol.com.au/?p=2289

Meet the Aronis family, the very definition of a success story. George and Maria emigrated to Australia in 1959 along with their son Peter and their daughter Matty and purchased a small corner shop with a flat above to live in and where Matty worked when she was not in school.

By the early 1970’s the Aronis family empire had grown considerably enabling George and Maria to stop working. The Aronis family now owned a large number of assets including three local Fish and Chip stores and several rental and commercial buildings. The two Aronis children had other jobs but still continued to work in the family business on evenings and weekends until the mid 70’s when Peter retired from the QLD police force and worked for the family business full time managing the previous rental properties along with new properties the Aronis family continued to buy.

In 1984 George and Maria began to think about what would happen to the family dynasty when they died and made mirror wills appointing each other as the executor and if they were both to die, to their children Matty and Peter in equal shares. Then in a further will in 1991 Maria made a further will appointing her son Peter and his wife Theodora as executors and leaving all her estate to them.

George died in 1993 and Peter died in 2015 leaving the Aronis matriarch, her daughter and daughter in law embroiled in conflict around the two younger Aronis’ entitlement to the family empire.

The first legal move was made by the daughter in law Theodora who alleged that her husband Peter was the beneficial owner of five of the Aronis properties under an understanding in the late 1970’s and that any income derived by the properties were the property of Peter and more importantly his estate and not the Aronis family. She maintained that as a result of this understanding Peter had managed the properties for no salary, cleaning and maintaining the properties and paying George and Maria’s private expenses.

Both Maria and her daughter Matty denied these allegations. Matty pointed to her parents’ 1984 will that left all property in the family to her and Peter in equal shares and confirmed that she too had made a number of financial contributions to the properties, including loan repayments, on a number of the properties.

Maria died shortly after the claim was filed but not before filing an affidavit with the court confirming that the alleged conversation Theodora referred to never took place and changing her will to leave her whole estate to her daughter Matty.

Whilst the trial was ongoing, Matty made a separate application to the court to remove the caveats Theodora had asked to be placed on the seven properties contained in Maria’s will as she needed the income from these properties in order to financially be able to fight these allegations. The Judge allowed the caveats to be removed and Matty was then able to make five counter claims against Theodora in respect of rental income on properties that she believed had not been paid into the Aronis family assets by her brother and his wife.

The Judge rejected Theodora’s claim on the basis that Theodora had not proved on the balance of the probabilities that the alleged conversations and understanding had ever existed and in a double victory for Matty also entered judgement in her favour on the properties leaving Theodora liable for $211k of wrongly appropriated rents.

Matty, the one surviving Aronis, is now the sole beneficiary of the family empire.

But at what cost?

It’s hoped that the Aronis family business will continue to thrive but the estate will have been reduced significantly with the legal costs involved and Matty and her mother were made aware of significant siphoning off of money by other family members leaving a business with it’s roots in family involvement without some family members.

Estate planning comes with the responsibility to seek professional advice from a wills expert who has the experience to foresee the possible problems that may occur when a family business forms part of the estate. You’ve worked hard for your legacy. Don’t let the absence of the right advice, dilute it.

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The Charity Ambiguity Trap & How To Avoid It. Banwell v Attorney-General [2020] QSC 239 https://mitchellsol.com.au/the-charity-ambiguity-trap-how-to-avoid-it/ https://mitchellsol.com.au/the-charity-ambiguity-trap-how-to-avoid-it/#respond Sun, 13 Feb 2022 23:30:17 +0000 https://mitchellsol.com.au/?p=2258 The Charity Ambiguity Trap & How To Avoid It

Banwell v Attorney-General [2020] QSC 239

There’s no better way for your estate to make a difference then to leave a gift in your will to charity. Charities will always be the most grateful of beneficiaries no matter how big or small your gift is and there’s an enormous sense of wellbeing to be had, knowing that your estate is working hard to help others after you’ve gone.

At first glance, leaving a gift to charity looks straightforward. You decide on the charity or charities  that you would like  to benefit from your estate and whether you want to leave a specific monetary amount, a percentage of your whole estate or even a family heirloom to be auctioned and then insert those details into your will.

So why do so many gifts to charities fail?

Because of the ambiguity trap. Charities are complex entities for many reasons. They change names, can be registered in different names to the ones that they are publicly known by, and can even cease to exist by the time your will is read. Numerous gifts to charities have failed because a will hasn’t correctly identified the charity or specified the purpose of the gift when the charity delivers both charitable and non-charitable work.

There’s numerous case law detailing just how easy it is for things to go wrong when it comes to leaving a gift to charity and the most recent case, which is also arguably the best example of the ambiguity trap is Banwell v Attorney General [2020]

Marie Cruice wrote her will in 2012 and left $450,000 on trust equally between 8 named or described charities, but when Marie died in 2015 it was clear that she had fallen into the ambiguity trap. Some of the charities names were not in existence at the date of her death and others had changed their names, some before the will was signed.

The Princes Alexandra Hospital was not a legal entity in its own right but was part of the Metro South Hospital and Health Service and there were nine presently registered entities with names including “National Heart Foundation” so how could the administrators even begin to understand which of these entities were the intended recipient of the estate.

It was clear that the administrators of the will were unable to distribute the estate in accordance with Marie’s wishes and applied to the court for guidance.

The lapse rule makes it clear that gifts to an entity that no longer exists at the time of death will lapse. However, there are exceptions to this rule and a gift will avoid lapsing where it is clear that:

  • The deceased had a general charitable intention in making the gift AND
  • That the deceased’s intention was to benefit a charitable purpose in the work of the named entity and that purpose could still be fulfilled.

Each one of Marie’s gifts were considered in turn and the court concluded that the purpose of the gifts could still be fulfilled and were able to be distributed.

The gift to the Princes Alexandra Hospital was given to the Metro South Hospital & Health Service for  the benefit of the Princess Alexandra Hospital’s fund for research purposes and the gift to the National Heart Foundation was given to the National Heart Foundation of Australia ABN 98 008 419 761, to be applied for research in this foundation.

When it comes to gifts to charities, the wording really is everything and those small amendments made by the court meant that all the charities named could benefit from Marie’s generosity.

Unfortunately for the administrators of the will and the other beneficiaries, those small amendments took five years from Marie’s death to come into fruition and the estate also took a big hit from costs.

So how do you avoid the ambiguity trap when it comes to leaving your gift to charity? Well charities themselves have lowered the risk of a potential lack of gift for themselves by putting details of their registered charity name and details along with potential clauses you can use, but that’s still no substitution for the expert of advice of a solicitor who specialises in wills and estates, who can draft your will and ensure that all intended recipients benefit exactly how you wanted them to, without falling foul of the charity ambiguity trap.

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WHO SOLD MY INHERITANCE? Outram v Public Trustee of Queensland [2020] QSC 80. How it can happen and what you can do to make sure you’re compensated for your loss https://mitchellsol.com.au/who-sold-my-inheritance/ https://mitchellsol.com.au/who-sold-my-inheritance/#respond Thu, 20 Jan 2022 23:30:05 +0000 https://mitchellsol.com.au/?p=2252 WHO SOLD MY INHERITANCE?

Outram v Public Trustee of Queensland [2020] QSC 80. How it can happen and what you can do to make sure you’re compensated for your loss

There are a number of different will makers, when it comes to leaving gifts to beneficiaries in their wills. Firstly there’s the will changers. This group of people are aware that wills are flexible and of their right to add to or delete beneficiaries, with January being the most popular time for those changes to be made. Christmas with the family can soon lose its tinsel coloured glow once the New Year is reached and the relative, who spoke out of turn, can quite easily find themselves without the family heirloom they’d been promised for years, and out of the will completely.

Then, at the other of the spectrum, are the will endurers. These people tend to make one will, and one will only in their lifetime and won’t seek to change that will. Gifts made by will endurers are usually honoured, so no worry from beneficiaries about being removed from the will following a family argument. But the gifts made can also be lost or sold as the years go by and, without the will endurer updating their financial position and providing a substitute gift, then the original gift will fail, leaving the beneficiary without.

Thankfully the courts have devised solutions for both the will changers and the will endurers. A Family Provision Application (in Queensland this would be in pursuance of Part 4 of the Succession Act 1981) allows certain family members to ask the court for a share of the estate despite, not being included in the will, subject to various conditions and an experienced trusts and estates solicitor will always advise for substitution gifts to be included in the will, minimising the chances of a will endurers’ beneficiary being left with nothing.

But, what happens if the will maker doesn’t sell their gift, someone else does? What legal recourse is there then?

Enter the will deciders.

These people are appointed by the will maker to make decisions on their behalf should the will maker become mentally capacitated through an enduring power of attorney and as in the case of the Outram v Public Trustee of Queensland [2020] QSC 80, can sell your gift to provide for the will maker and you could be completely unaware of it.

Heather Everingham married a widower and had three stepchildren. When the children’s father died, Heather was the only beneficiary and although there was only a small estate worth around $662k, she left her property, Blackwood Road, equally between her three stepchildren with the residue left to her niece and two nephews.

By 2015 Heather was living with her nephew, Peter, and his wife. Her mental and physical health had deteriorated to the point where she was no longer able to care or make financial decisions for herself and Peter was appointed under an EPA to be her attorney. It was decided that Heather would sell the Blackwood Road property and the proceeds would pay for her bond at a retirement village. Peter wasn’t aware that the property had been left to Heather’s step children in her will but had consulted with the step children before the decision was made to sell the property and had initially made enquiries with them to see if any of them wished to purchase the property.

The property was sold for $570k and Heather entered the retirement home with the surplus cash from the sale being paid into her estate. It was only on her death in 2018 that the discovery was made that the Blackwood Road property should have passed to the step children under the will. Instead, the money from the sale had now bypassed the stepchildren completely, leaving them with nothing and going straight to Heather’s nieces and nephews instead.

There was no suggestion that Peter had acted dishonestly in selling the property. He was able to evidence emails between himself and the stepchildren discussing the sale of the property but unfortunately neither him, nor the other family members, were aware that they had been left the property and not part of the residue and would be left with nothing as a consequence of the sale.

Section 107 of the Powers of Attorney Act 1998 provided a solution. The Act allows the court to order appropriate compensation to be paid from the estate to disappointed beneficiaries. But how much money would be appropriate?

Previous case law had provided guidance and the court would look at:

  • The size of the estate
  • The competing gifts that had been to other beneficiaries
  • The actions of the Attorney and whether there had been improper conduct
  • What happened to the sale proceeds.

Unlike a Family Provision claim, compensation under Section 107 is based on the loss of benefit under the will and not need. There had been no improper conduct, the only other beneficiaries were the nieces and nephews and the sale proceeds had been used to fund the retirement village with the surplus being paid back into the estate.

The stepchildren sought compensation effectively to the value of the entire estate. Their claim pitched the “starting point” at $705k: the sale price achieved for the Blackwood Road property by the new owners at the time its re-sale shortly prior to Heather’s death.

Her honour rejected that contention and held instead that — in the circumstances of this particular case — the “best evidence of the lost benefit” was the net sale proceeds achieved by the attorney in 2016 ie $552k. The judge was also able to award costs from the residue of the estate so that the compensation to the step children weren’t diminished by the costs of the application.

All’s well that ends well you may think, but the application itself has reduced the money payable to the niece and nephews, who were gifted the residue of the estate by Heather. The real solution to a failed gift is to avoid it occurring altogether. If the step children had been included in the residue, the application could have been avoided.

Whether you’re a will changer or a will endurer the best way to protect your beneficiaries is to seek out advice from a specialist solicitor in wills and estates.

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The Perfect Pet Gift For Your Best Friend This Christmas. How to include your pet in your will. https://mitchellsol.com.au/the-perfect-pet-gift-for-your-best-friend-this-christmas/ https://mitchellsol.com.au/the-perfect-pet-gift-for-your-best-friend-this-christmas/#respond Mon, 20 Dec 2021 23:00:14 +0000 https://mitchellsol.com.au/?p=2246 The Perfect Pet Gift For Your Best Friend This Christmas

How to include your pet in your will

Pets can get overlooked at Christmas, mostly because they don’t expect anything. There’s never an awkward moment on Christmas with your pet, like the one which you might have with your Great Aunt who turns up unexpectedly over the holidays with a gift, and yet your pet has consistently been happy to see you and brought you joy throughout the year. So if you feel pet advent calendars and Reindeer ears aren’t enough this year for your best friend that Mitchell’s Solicitors have a great gift idea for you;

Include them in your will and make sure that they’re looked after if you die before them.

Under Australian law pets are considered property, so you can’t leave your estate to your pet, however, there are a number of options which will ensure that your pet is cared for as well as you cared for them during your lifetime.

 

  • Make sure you have a will. If you already have a will, then on your death your pet will pass to your residuary beneficiary if you haven’t already made provision in your will for your pet. If your residuary beneficiary isn’t a pet lover then it might be time to amend your will and include a beneficiary who is. If you don’t have a will then your pet will pass under the intestacy rules to your closest living relatives who might not have the room or finances to keep your pet.

 

  • Talk to your beneficiaries- Explain to your chosen beneficiaries that you would like them to care for your pet and what you would like that care to look like so there’s no surprises in the will.

 

  • Think about financial provision from your estate for your pets upkeep- A lump sum specific amount could be left for the beneficiary with instructions to use the money only for the care of your pet.

 

  • Create a legacy trust with an animal charity- If you’re struggling to find a beneficiary who is willing to adopt your pet if you were to die before they do then creating a legacy trust in your will leaving money to a pet charity will ensure that your pet is rehoused and cared for after you’ve gone.

 

Making sure that you have a will this Christmas that includes your pet is not only the best gift you can give your pet but also the best gift you can give yourself. At Mitchells Solicitors our will experts can give you the best options for you and your pet and make sure that any amendments made are legally binding so take time this Christmas to seek their advice — your pet will thank you.

 

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The Statutory Will Solution to Incapacity. Re MTX 2020 QSC 117 and the court application that could save your estate money https://mitchellsol.com.au/the-statutory-will-solution-to-incapacity-re-mtx-2020-qsc-117-and-the-court-application-that-could-save-your-estate-money/ https://mitchellsol.com.au/the-statutory-will-solution-to-incapacity-re-mtx-2020-qsc-117-and-the-court-application-that-could-save-your-estate-money/#respond Wed, 01 Dec 2021 23:30:08 +0000 https://mitchellsol.com.au/?p=2239 The Statutory Will Solution to Incapacity

Re MTX 2020 QSC 117 and the court application that could save your estate money

Any will professional worth their salt will tell you to avoid a court application if you can. Allowing a Judge to make a decision on an estate can take a toll on both the health of the parties as well as the financial health of the estate and can easily be avoided by proper planning.

But there’s some things that you just can’t plan for. A spouse who suddenly becomes mentally incapacitated can wreak havoc on estate planning and an application to the courts for a statutory will can suddenly become a much more attractive option, with the costs saved far outweighing the costs of the application.

In MTX 2020 QSC 117, a husband and wife had been married for 68 years and had four surviving children. Their shared assets consisted of:

  • A property worth $1 million
  • Share portfolio worth $7 million
  • 50 shares each in the family company

The MTX family took their legacy seriously and sought legal advice about their wills consistently with their legal advisers making corresponding wills in 1997, 2001, 2004, 2007 and 2008.

In 2015 the matriarch of the family was diagnosed with dementia by her GP and her husband became her attorney in 2016 as well as her main carer. In 2019 the husband received specific tax planning advice from KPMG which advised him to make amendments to his will in order to make substantial savings, which he did. Unfortunately, the changes to his will now unintentionally affected his wife’s will so that the gift to their children was unfair.

The wife no longer had capacity to change her will and her geriatrician confirmed that she would never gain capacity at any time in the future. The tax advice had benefited the estate but not the children who the parents were so keen to financially protect.

The solution given was to apply to the court for a statutory will under Section 21 of the Succession Act 1981 (Qld) which provides that the court may make an order authorising

(a) a will to be made or altered, in the terms stated by the court, on behalf of a person without testamentary capacity; or

(b) a will or part of a will to be revoked on behalf of a person without testamentary capacity. 

The court may make the order only if —

(a) the person in relation to whom the order is sought lacks testamentary capacity; and 

(b) the person is alive when the order is made; and

(c) the court has approved the proposed will, alteration or revocation…

In order for the court to make their decision, there had to be the following:

Satisfactory evidence of lack testamentary capacity — which was provided in this case by the wife’s geriatrician who had been treating her for a number of years.

A draft of the proposed will- which was provided by the MTX family lawyers

There needs to be evidence of the person’s wishes, and there has to be evidence provided in relation to the terms of any will previously made by the person- the husband was able to give evidence that discussions between him and his wife in relation to estate planning were always aimed at ensuring their family’s legacy was protected and maintained for the benefit of the children and grandchildren.

There is also the requirement that there should be evidence available in relation to whether there was a gift to a charitable or other purpose that would be reasonably expected to be made by the person — although the husband had made provision for charity in his will, his wife never had any specific provision for charities under her will. The persons directly affected by the will are the four children only and they supported the application and anyone who might benefit under the intestacy rules had been considered.

The Judge was satisfied that all conditions were met and the application was granted. No losers, only winners in this case and no word of advice of how adequate planning could have avoided the costs of the application on the estate.

There is a word of warning about asking the court to make a statutory will with less than honourable intentions. In the MTX family, every decision made around the interests of their children only. If the purpose of the arrangements had been to defeat any potential creditor, then the decision of the court would have been different.

We can always do our best to plan for the future but for those times when we can’t then the provision of a statutory will can help you protect your legacy when your spouse can’t.

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Where’s Your Will? The Will of Valerie Eve Robson [2020 QSC 52] and the Forgetful Will Custodian. https://mitchellsol.com.au/wheres-your-will-the-will-of-valerie-eve-robson-2020-qsc-52-and-the-forgetful-will-custodian/ https://mitchellsol.com.au/wheres-your-will-the-will-of-valerie-eve-robson-2020-qsc-52-and-the-forgetful-will-custodian/#respond Wed, 17 Nov 2021 23:30:17 +0000 https://mitchellsol.com.au/?p=2172 Where’s Your Will?

The Will of Valerie Eve Robson [2020 QSC 52] and the Forgetful Will Custodian.

Where’s your original will? The original one, not the email or photocopy that you received from your legal advisors but the actual document that you signed in the presence of two witnesses? If you’re struggling to remember exactly where it is and who’s looking after it, then the case of Valerie Robinson is going to save your estate money and your beneficiaries a headache.

Valerie Robinson made her will with her solicitors in December 2004 which was signed and witnessed and in which she had named her step sister Ann as the executor. A true organiser, she sent Ann a photocopy of the will and handwrote a note on saying:

“ Annie- copy of my will. Any questions-just ask Val.” 

Six years later, in 2010 Valerie was diagnosed with dementia and as her condition deteriorated, her brother Gordon was appointed her guardian to make decisions in relation to her care. On hearing about Valerie’s deteriorating health in 2013, the original solicitors contacted Ann suggesting that someone should collect Valerie’s will and Gordon collected the will and other financial documents of Valerie’s from them.

When Valerie died in 2019 Gordon contacted the solicitors who had made the original will however, their records showed that Gordon had the original will and had taken it from their office.  No matter where he looked though, Gordon could not find the original will anywhere within Valerie’s papers at home.

Ann was unable to get a grant of probate without the original will and so an application was made for the court to decide whether the photocopied will could be admitted to probate.

It was clear from the photocopy that the document was a will which clearly stated that all previous wills were revoked and that the will had been signed and witnessed correctly. What wasn’t clear was what had happened to the original will as there is always a presumption that if an original can’t be found then it must have been destroyed, thus revoking it.

Had Valerie sneaked into Gordon’s office and destroyed the original will because she no longer relied upon it as her last will?

Highly unlikely given Valerie’s health, and Gordon was able to provide evidence that Valerie hadn’t visited his home in the time period between him collecting the original will and the date of her death.

The court concluded that this evidence was enough to overcome the presumption that Valerie had destroyed the will, and along with medical evidence which showed that she had mental capacity at the time the will was written, were able to allow the photocopied will to be submitted to probate.

But at what cost? Gordon’s failure to locate the original had cost the beneficiaries of the estate dearly as the costs of the application, which could have been avoided if the original had been found, came from Valerie’s estate.

Everybody knows that an original is worth far more than a copy. That print you’ve got hanging in your hall, as attractive as it is, isn’t going to be as valuable as the original hanging in the gallery of modern art. The same applies with the storage of your will. You won’t be expected to keep it framed alongside a certificate of authenticity but relying on a copy is a sure fire way to reduce your estate. So treat your will like you’d treat that masterpiece and make sure you, and those your trust to administer your estate know exactly where it is.

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THE WILL GAMBLE. RE: Weedon [2020] QSC 161 and the high stakes risk of an unwitnessed will. https://mitchellsol.com.au/the-will-gamble-re-weedon-2020-qsc-161-and-the-high-stakes-risk-of-an-unwitnessed-will/ https://mitchellsol.com.au/the-will-gamble-re-weedon-2020-qsc-161-and-the-high-stakes-risk-of-an-unwitnessed-will/#respond Tue, 02 Nov 2021 23:00:12 +0000 https://mitchellsol.com.au/?p=2167 THE WILL GAMBLE

RE: Weedon [2020] QSC 161 and the high stakes risk of an unwitnessed will.

How much do you like to gamble? Not at all? A yearly bet on the Melbourne Cup? I would bet (pardon the pun) that you wouldn’t risk losing your entire estate to the wrong person by leaving it up to chance, yet that’s what people do each time they fail to properly prepare and execute a will.

Barry Weedon [Re Weedon 2020] thought that he had had lowered his risk considerably by preparing a document on the 19th April 2013 which was headed ‘my last will’ and which contained firm instructions about what was to happen to his estate when he died:

Barry’s niece, Miranda, was to receive a substantial amount of his estate and her husband, Derek, was named as the executor and trustee. Miranda and her husband had a close relationship with Barry and had taken over a caring role as Barry’s health had deteriorated.

Barry’s two estranged daughters were left a nominal amount of $2 each with Barry making it clear that his daughters had not engaged with him for many years despite his efforts following an acrimonious divorce.

Barry’s brother was to receive family photographs and historical documents and instructions were given about specific funeral arrangements.

The will was signed, dated and witnessed by a Justice of the Peace before being placed in his filing cabinet gathering dust until it was found on his death in November 2019.

Unbeknownst to Barry he’d increased his risks massively by failing to get legal advice from a professional. His homemade document hadn’t been signed in the presence of two witnesses, making it an informal will which would need the courts approval under section 18 of the Succession Act 1981 (Qld) to formalise the document as Barry’s Will.

At this point Barry is already not really winning. If the courts decide that his document isn’t a will then Barry will have died intestate and his entire estate will pass equally to his two estranged daughters, who refuse to have a relationship with him, rather than his niece, who he wanted to reward for her love and care. If the courts decide that his document can be formalised to be a will then the court costs of the application will dramatically reduce the estate, so his niece will only receive a portion of what Barry intended, all because he didn’t seek legal advice.

Under Sec 18 of the Succession Act, the courts will consider whether the deceased intended the document to be his last will. There were no other documents found and Barry had left clear indications that the document was intended to be his will and provided clear intentions of what should happen to his estate. There was also no suggestion that Barry lacked testamentary capacity at the time of the will and the Judge confirmed that in normal circumstances he would have granted the application. However, the Judge had noted that Barry’s daughters hadn’t been made aware of the application being made and given that they stood to lose the estate which would pass to them on intestacy and instead gain $2 based on the Judge’s decision, they should be.

The case was adjourned with directions for steps taken to locate the deceased’s daughters, and, if the daughters were located; steps taken to notify them of the application and their right to attend and be heard at 9.15 am, 29 April 2020.

Barry’s luck could still go either way. His daughters were now going to be given the opportunity to oppose the application and ask the court for Barry to be declared intestate, incurring more costs to be deducted from the estate and leaving his niece with nothing.

By the 29th April, both daughters had been traced and informed of the application. One indicated through her solicitor that she did not want to participate in the application and the other, although she’d received the notification, failed to respond.

Thanks to his daughters, the courts were able to allow the application for the document to be formalised to a will and Barry’s intentions as to his estate were finally fulfilled albeit with a hefty deduction for legal costs associated with the application. But had the daughters opposed the outcome then the only possible winners could have been the daughters if they traded their $2 for a much bigger piece of the estate.

The worst kind of risk takers are those like Barry who take risks when they don’t have to, with only a downside and no possible upside. Just one phone call to a solicitor who specialises in wills and estates could have made Barry’s estate risk free and ensured that the right people benefitted from Barry’s estate. Don’t leave it up to chance and gamble on your will.  Your loved ones deserve better.

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The Fox Family & Their Father’s Missing Will. Re Fox [2020] QSC 30 https://mitchellsol.com.au/the-fox-family-their-fathers-missing-will-re-fox-2020-qsc-30/ https://mitchellsol.com.au/the-fox-family-their-fathers-missing-will-re-fox-2020-qsc-30/#respond Tue, 19 Oct 2021 23:09:19 +0000 https://mitchellsol.com.au/?p=2132 The Fox Family & Their Father’s Missing Will 

Re Fox [2020] QSC 30

If you’re looking for tales of drama, mystery and intrigue then the Supreme Court of Queensland’s Succession law cases have it all. Despite good intentions, failing to update your will and your family with your intentions can lead to family disputes worthy of any TV show with the costs of each court invention causing a serious financial dent in your estate and, as in the case of Re Fox, there’s not always a happy ending.

Robert Laurence Cecil Fox died in 2018 leaving behind two adult children, Joanne and Trevor from his first marriage, a step daughter, Angelina and his youngest daughter Alexandra, from his relationship with their mother Olga.

Like all good men, Robert had made a will in 2001 which instructed that his estate should be divided in the following way:

30% to Joanne

30% to Trevor

30% to his wife Olga

10% to his stepdaughter Angelina and:

a gift of $500 to his executor David Ross.

However, by the time the Fox patriarch died in 2018, Robert’s life had changed dramatically. Alexandra had been born in 2003 and he had divorced her mother Olga in 2013, five years before his death.

Joanne, the eldest of the Fox children, took over the administration of the estate on her father’s death and applied for probate based on the 2001 will which is when the first hurdle for the Fox family appeared. Probate can only be granted to the executors of the will and David Ross was the named executor, not Joanne so her application was refused.

For reasons unknown, David Ross renounced his office in 2019 and Joanne reapplied to the court for letters of administration to be granted to her based on the fact that there was no longer an executor to handle the administration of the will.

But then her brother Trevor stepped forward and added fuel to the already simmering fire. Trevor gave evidence that the 2001 will wasn’t the last wishes of their father. Robert Fox had shown Trevor an updated will following his divorce from Olga which no longer included Olga and his step sister Angelina but did now include the youngest Fox sister, Alexandra. In the new updated will all three Fox children were given an equal share of the estate.

Trevor ended his affidavit to the court by saying that he fully supported his sister application and that he would be willing to forgo his financial entitlement under the will to benefit his youngest sister, Alexandra.

Trevor’s generous gesture towards Alexandra made Joanne re consider her actions and she then filed another application to the court, this time asking for a grant of the letters of administration for the 2001 will confirming that she would also forgo her financial entitlement for Alexandra but then said in her application that she would administer the estate as if her father died intestate which would remove Angelina as a beneficiary. Angelina unsurprisingly opposed this application asking the court to instruct Joanne to proceed with the administration of the 2001 will which left her 30% of her step father’s estate.

With the Fox children unable to provide evidence of another will, it was the left to the court to consider the possibilities.

If the court decided that the 2001 was valid, then:

Robert’s gift to his now ex wife Olga was revoked on their divorce and would fall into the residue, however, Roberts 2001 will only gave specific gifts and didn’t contain a residue which would mean Olga’s 30% would fall into intestacy.

Joanne and Trevor have disclaimed their father’s gifts to them in favour of Alexandra but have actually maintained their gifts for the benefit of Alexandra. This would mean that their gifts would also fall into intestacy as there is no residue however, the only people who would benefit from the gifts under intestacy would be Joanne, Trevor and Alexandra anyway as they are Robert’s issue.

Angelina is the only person who would miss out as she was a step child of Robert and the court held that she ceased to be a step child when her mother and Robert divorced.

If the court decided that Robert died intestate then :

Joanne, Trevor and Alexandra would equally be the beneficiaries of Robert’s estate but as Joanne and Trevor have relinquished their gifts Alexandra would receive all the estate.

The problem was that Robert didn’t die intestate. He left the 2001 will and Trevor had provided evidence that there is another will and the court confirmed that Joanne’s application to administer her father’s estate based on intestacy could not go ahead.

It was also inappropriate for Joanne’s application for letters of administration for the 2001 will to be allowed until further evidence was obtained and so all of Joanne’s applications were adjourned.

Unless Robert’s updated will is found, then the Fox children will never know what their father intended when it came to their step sister Angelina. Two years after their father’s death, they were still no nearer to distributing his estate and the cost of Joanne’s three applications to the court had greatly diminished the beneficiary pot.

All good stories have a moral to take away and the Fox family story is no different. If you want your family succession story to be a success then for every life event make a new will and make sure your nearest and dearest know where it is and what your intentions are.

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The Granny Flat Fail. Richardson v Lindsay and how it’s important to get your house in order before you commit. https://mitchellsol.com.au/the-granny-flat-fail-richardson-v-lindsay-and-how-its-important-to-get-your-house-in-order-before-you-commit/ https://mitchellsol.com.au/the-granny-flat-fail-richardson-v-lindsay-and-how-its-important-to-get-your-house-in-order-before-you-commit/#respond Thu, 23 Sep 2021 23:30:03 +0000 https://mitchellsol.com.au/?p=2090 The Granny Flat Fail

Richardson v Lindsay and how it’s important to get your house in order before you commit

 

People are living longer. However, being the surviving spouse and living alone in the large family home, which was once bursting at the seams, can have a cost, both on your financial and mental health. But what if you’re also not ready yet to lose your independence and move into aged care?

Enter the Granny Flat Agreement. You sell that too big family home, which is way across town from your children and grandchildren and use the sale proceeds to purchase a larger home for your children or to build a separate house on their existing property, in exchange for them providing you with care.

What could possibly go wrong?

Well actually a lot, especially when those agreements are informal, or when your other children aren’t aware that the proceeds from the family home are no longer part of your estate and one sibling has benefited far more than the others.

Or, as in the case of Richardson v Lindsay [2019] NSWCA 148, one party might just simply change their mind.

Faith Richardson had four daughters and when her husband died in 2010 she sold her property and moved in with one of her daughters, Fiona, who was renting a property with her husband and her three children. A year later, Fiona and her husband bought a property in Orange for $470,000, of which Faith contributed $220,000.

A Family deed of arrangement was drafted which stated the following:

Faith will advance to the Carers by way of conditional gift the sum of $220,000.00 to assist them in the purchase of 13 Bill Marshall Drive, Orange NSW 2800 for the sum of $470,000.00 or some other suitable accommodation for Faith, the Carers and their family. 

Things went well until 2014 when John and Fiona told Faith that they wanted to sell the house in Orange and move 25KM’s away to Lewis Ponds. They took Faith to see the property on three occasions, took her to meet the property sellers and had a conversation with Faith in which they made sure that Faith understood that if they bought the property they would not be able to repay Faith her $220,000. Faith made no objections to the purchase of the property and said she understood the financials so in March 2015 the Lindsay family and Faith moved to Lewis Ponds and in June 2015 Faith moved out, assisted by two of her other daughters.

Faith did not like Lewis Ponds. She felt isolated and complained there were no shops, medical facilities or public transport available and asked the Lindsay family for the return of her “conditional gift” on the basis that Fiona and John had, without her consent, moved to accommodation that was not suitable for her needs and brought proceedings claiming the benefit of a charge over the Lewis Ponds property to secure her contributions to the purchase totalling $220,000 together with their alleged increased value by reason of their investment in the Orange property. Alternatively, she claimed damages for breach of the Deed by reason of Fiona and John’s move to a property that was unsuitable for her needs – money that Fiona and John didn’t have because of the move to Lewis Ponds, which they believed had been sanctioned by Faith.

The decision of the Judge, which was upheld on appeal, found that Faith’s actions were a significant motivating factor in the Lindsay family’s decision to move and that they had suffered detriment in relaying on Faith’s representations in buying the Lewis Ponds property and taking on an increased mortgage liability. It would be unconscionable for Faith to resile from the expectation that she created in Fiona and John that she consented to the move, that she was therefore estopped from objecting to the move and judgment was entered for Fiona and John.

There are no real winners in this case. Faith was left without a home and the proceeds of the sale of her property and left with a warring family and a depleted bank balance from the legal costs spent. Don’t forget the rest of the siblings who now, through no fault of their own, will receive less than their sibling when their mother dies and still have to find somewhere for Faith to live and someone to care for her.

That’s not to say that Granny Flats are always a fail. And it should be noted that Granny Flat arrangements are not really all the same. Richardson v Lindsay describes one of many possible arrangements. If you’re willing to make a plan and document what will happen if things turn sour or when the parent needs money to go into an aged care facility, and you seek legal advice from a specialist in wills and estates then you just might find that a Granny Flat is the ideal solution to living a longer life.

 

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