croucher succession law reform update 2011

Succession Law Reformin New South Wales

2011 Update

Professor Rosalind Croucher

Wills

Dispensing power

• Is there a document?• Does the document

embody testamentary intentions?

• Did the deceased intend the document, without more, to be the will?

RectificationRectify to carry out intentions where• there’s a clerical error• the will does not give effect to

‘instructions’

Succession Act s 27

• Deceased intended to divide residue into six shares – one to Justin and his wife jointly, not additional one to Justin (7th share)

• Will rectified – six shares

Estate of Davis [2010] NSWSC 989

Rectification

Justin & Mrs Justin

Justin

E

D

C

B

A

Rectification

Justin & Mrs

Justin

E

DC

B

A

“My home 11 Grevillea St”

Rectification

= ademption residue ????

Instructions?• solicitor’s note – “if house sold for

retirement unit, then residue to be divided”• “name down for Anglicare unit”• deceased wanted to benefit daughter

more than son

Rectification

• new will prepared after sale:

“all of the monies which will be refunded from RSL Lifecare for the residency agreement that I am a party to for Villa 1”

• she died before signing new will• will rectified – gift caught new form

Estate of Tait; Vesco v Bannister [2010] NSWSC 1274

Rectification

Statutory wills

The will is one that the incapable person:• would have made;• would be reasonably likely to have made

Succession Act s 22(b)

Statutory wills

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Statutory wills

nil capacity

lost capacity

Lost capacity: consider the person’s –• relationships• history• personality• size of the estate• previous wills

Re Fenwick [2009] NSWSC 530

Statutory wills

What if there is no will?• don’t start with a presumption against

intestacy• but there’s probably some evidence to

satisfy the court that person intended, at some stage, to make a will

• if insufficient evidence then applicant fails

Re Fenwick [2009] NSWSC 530

Statutory wills

‘[i]t is a serious matter for the Court to appropriate to itself the will-making power of the citizen’.

Re Will of Jane [2011] NSWSC 624, [84].

Statutory wills

Right to inspectIncludes:• anyone named in the will• beneficiaries• spouse, children or parents• next of kin• creditor

Succession Act s 54

Family Provision

Family Provision

(a) the husband or wife

(b) de facto

(c) child

(d) former spouse

(e) sometime dependant

(f) close personal relationship

Succession Act s 57

Eligibility

Carers?• s 57(f) – ‘close personal relationship?• s 3(3) – living together, providing domestic

support and personal care• s 3(4) – not satisfied if

– for fee or reward– on behalf of an organisation

Eligibility

Adult children patterns:• the dutiful child rewarded under the will,

facing a claim by an estranged/undutiful child

• the needy child rewarded under the will facing a claim by siblings who are not needy

Family Provision

Family Provision

• $10,000 to Lynne• 40% to Michael• residue to Michael

and three sisters (not Lynne)

Rita’s

Andrew v Andrew [2011] NSWSC 115

Evaluating claimsKey messages:• it is not about re-writing wills• it is not about ‘fairness’ from a child’s

viewpoint• it is not about ‘equity’ between children• parents are still able to make judgments

about the worthiness of their children

Evaluating claims• a parent is not expected to provide

forever for children• a child who is still dependent may

have a continuing claim• the community may expect a parent to

provide a ‘buffer against contingencies’ for a child who falls on hard times – depends on size of estate and competing claims

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Gut instincts

Section 60 factors, include – • applicant’s contribution to estate or welfare

of the deceased (financial or otherwise)• deceased’s contribution to applicant• character and conduct of applicant• evidence of what testator wanted

Evaluating claims

• What is the reason?• Needs of plaintiff, size of estate, other

claims?• Deceased is entitled to make no provision

for a child who treats their parents callously

Estrangement

Result• Estrangement not the fault of the

deceased – and over 35 years• Good relationship continued with other

children• Testator entitled to make little provision for

child who withholds support and love without justification

• Conduct and need inter-related

PropertyNotional estate – Part 3.3• entering a prescribed transaction• timing• deeming

Eg – joint tenancy• = prescribed transaction – s 76(2)(b)• takes effect on death – s 77(3)• should it be deemed? – ss 78, 83

Property

Avoidance strategy?• give cash gifts – but note pension

impact • give away movables – deed of gift but

retain possession as custodian?• > 3 years if possible• provide reasons – to explain, if

needed

Property

Richard Pratt

Richard Pratt

Property

Pratt’s domicile

movablesimmovables

Property

movablesimmovables

movablesimmovables

movablesimmovables

testator’s domicile

Pratt’s propertyDid Pratt leave property in NSW?• no actual estate• notional estate claims over properties held

by companies – Pratt a director

Fiduciary duty

No notional estate

Capacity• difference from prior wills?• explanations for change?• inofficious?• need to take a cautious approach

Probate

Intestacy

Next of kinspouse

issue

parents

siblings

grandparents

aunts and uncles

Family tree …

Intestate BrotherSister

Mother Father Uncle

Grandfather Grandmother

Niece NephewChildren

FirstCousins

Gt-niece

First Cousinsonce removed

Gt-nephewGrandchildren

Gt Grandfather

Gt-Uncle

First Cousinsonce removed

Second Cousins

Gt Grandmother

Second Cousinsonce removed

Per stirpes…

IntestateBrotherSister

NieceNephew

Two

Gt-niece Gt-nephew

NephewOne

• Siblings: two shares• Sister predeceased leaving surviving issue• Sister’s share: divided into two• Niece’s s share divided between her two

children• Nephew Two gets nothing

Per stirpes…

Per stirpes…

IntestateBrother = 50%Sister’s share = 50%

Niece’s share = 25%

NephewTwo = 0%

Gt-niece= 12.5%

Gt-nephew= 12.5%

NephewOne = 25%

For further information on the Uniform Succession Laws

project• QLRC website –

www.qlrc.qld.gov.au • NSWLRC website –

www.lawlink.nsw.gov.au/lrc • ALRC papers and speeches –

www.alrc.gov.au