Tuesday, February 14, 2023

Love ya, love ya, love ya** - and my last will proves it … (AKA dogs are the best people**)

The general position under Australian law is that a willmaker has autonomy to distribute personally owned assets in their absolute discretion.

Previous posts have explored the broad exceptions to this position, each of which primarily revolve around either:
  1. The underlying incapacity of the willmaker to understand and act freely in preparing their will; or
  2. Due to the public policy reasons developed by the legal system that regulate how a responsible willmaker should distribute their wealth.
In this context there are many (in)famous examples often raised by advisers with us of willmakers perhaps taking their autonomy to interesting extremes.

Five examples include:
  1. An alleged will precedent provision used by some law firms, that the gift of an estate by a willmaker 100% to his 2nd wife is entirely dependent on a condition hardwired into the will that she remarries. Why the condition of remarriage? In the words of the willmaker: ‘So that at least one man (or woman as the case may be) mourns my death’ … a concept allegedly based on the precedent of the will made by German poet Heinrich ‘Henry’ Heine.
  2. The William Shakespeare model of giving to his wife of 34 years and mother of his children Anne Hathaway only one asset from his estate; being his ‘second best bed’. At least according to Wikipedia however, the gift may not appear as harsh as might otherwise be assumed. In particular, at the time beds were very expensive assets, sometimes equivalent in value to a small house. Furthermore, it was also custom that the best bed in the house was reserved for guests. Thus the bed that Shakespeare gifted Hathaway may have in fact been their marital bed, and thus not intended to insult her.
  3. Lang Hancock’s business partner Peter Wright had a son (Michael Wright) who created an estate plan to ‘manage’ his obligations to a ‘secret’ daughter from a brief relationship. While the daughter was given a gift of around $3M (challenged successfully to an increased amount of around $6M) much debate was caused by the housing of the gift. This was because the gift was placed into a restrictive trust that mandated rules such as spending limits and the permissible religious faith she adhered to, as well as prohibiting indulging in illegal drugs or committing drug related offences, including driving under the influence of alcohol. Following the challenge these restrictions were all removed.
  4. The ‘leaving it all to the cat home’ approach – perhaps most famously adopted by hotel magnate Leona Helmsley, who died in 2007 and left instructions that almost her entire estate of some $8B pass to a trust for dog welfare. The dog trust was the iterated version of the estate plan – the preceding approach prioritised providing for ‘poor people’ as well as dogs, with the dogs noted as a secondary priority. Three years before death however all references to poor people were removed by Helmsley, leaving dogs as the sole beneficiaries of her wealth. Reports at the time also confirmed that Helmsley's nine-year-old Maltese (‘Trouble’) received $12m. By comparison, two of her grandchildren were excluded from the will and two others had their combined $10m inheritance made contingent on their regular attendance at their father's grave. Trouble's inheritance was ultimately cut by the courts from $12m to $2m, with the balance gifted to Helmsley's charitable foundation.
  5. Robert Holmes a Court approach of ‘the will you have when you don’t have a will’. Australia’s first billionaire allegedly had completed an extensive estate planning exercise and then managed to carry his unexecuted will in his brief case for around 2 years before his sudden death of a heart attack, aged 53. Dying without a valid will meant that the estate was administered under the intestacy regime – however it was also bitterly litigated in a dispute that lasted years.
As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters a double hit this week - some extra love for Valentine’s Day 2023. First, the title of today's post is riffed from the Dave Graney and the Coral Snakes song ‘Night of the Wolverine’.

View here:

And the second hit - The Fauves song ‘Dogs are the best people’.