Can you make a will for another** person where they are the main beneficiary?

Particularly as people live longer, it is becoming increasingly prevalent that the instructions for someone’s will are provided by a close friend or relative who themselves will be the primary (and in some instance, only) person to benefit under the will.

In order to ensure that the will is not later successfully challenged or held to be invalid, there are a number of critical steps required.

While each situation will depend on the exact circumstances, generally the following steps should be taken:

1. a specialist lawyer should ideally be responsible for preparing the estate planning documentation;
2. to the extent possible, that lawyer should tolerance test the integrity of the instructions being received directly with the will maker and without the intermediary being present;
3. if the lawyer has an ongoing client relationship with the intermediary, then thought should be given to ensuring that the will maker obtains some form of independent legal advice;
4. if there is any concern in relation to the capacity of the will maker (for example, due to age or mental capabilities), specialist medical advice should also be obtained at the time of signing the documentation; and
5. comprehensive meeting notes should be prepared in relation to all interactions on the file, ensuring that they are in a format that could be provided to, for example, a court if the will is ultimately challenged.

** For the trainspotters, the title of today's post is riffed from the Coldplay song 'Another’s arms'.

View here:

(Charlotte) Sometimes** complex wills fail for want of knowledge and approval

Previous posts have considered some of the key issues in relation to assessing testamentary capacity. 

Given the complexities with life estates mentioned over recent weeks, one aspect that often arises in this regard is the level of knowledge and approval the willmaker must have of their will. 

This is because the requirement that a willmaker knew and approved of the contents of their will is a separate and distinct requirement for validity to the question of the willmaker’s testamentary capacity. 

In this regard it is accepted that it is not necessary to establish that a willmaker was capable of understanding every clause of the will and its legal effect. 

Rather, it need only be shown that the willmaker understood that they were signing a will and the practical effect of its central clauses, including the gifts of property made. 

As with the assessment of capacity, the amount of evidence required to prove a willmaker understood their will depends on the factual matrix. 

In this context, the case of Hoff v Atherton [2005] WTLR 99 is relevant. 

This case confirmed that a court may require evidence that the effect of the document was explained, that the willmaker did know the extent of their property and comprehended and appreciated the claims on the estate that they should have considered. 

These factors are not considered simply because the court may have doubts as to the willmaker’s capacity to make a will. Rather the focus is on the separate issue of whether the willmaker knew and approved the contents of the will. 

This means that even a willmaker who is held to have full capacity, and was not subject to undue influence (see our previous post that explores this issue), can have probate of their will refused on the basis that the document does not express their true intentions. 

As usual, please contact me if you would like access to any of the content mentioned in this post. 

** for the trainspotters, ‘Charlotte Sometimes’ is a song by the Cure. View hear (sic): 

Assessing the validity of a will: the (key factors) to have on your list**

Recent posts have considered some of the key issues in relation to assessing testamentary capacity.

One case often referred to due to its detailed explanation of the key factors the courts take into account when assessing the validity of a will is Bailey v Bailey (1924) 34 CLR 558. As usual if you would like a copy of the case please contact me.

The key factors listed are as follows:

1. The onus of proving that an instrument is the last will of the will maker is with the party propounding it.
2. The court must determine the validity of the will on the balance of the whole of the evidence.
3. The proponent can discharge the onus by establishing a ‘prima facie’ case.
4. A prima facie case is one which, having regard to the circumstances established by the proponent’s testimony, satisfies the Court that the will is the last will of a free and capable will maker.
5. It is the capacity of the will maker’s mind, not body, that is relevant.
6. The quantum of evidence sufficient to establish validity of a will always depends on the circumstances of each case. Relevant factors may include:
1. the simplicity or complexity of the will, its rational or irrational provisions and its exclusion or non-exclusion of beneficiaries;
2. the exclusion of persons naturally having a claim upon the will maker’s estate;
3. extreme age or, sickness of the will maker; and
4. existence of any person having motive and opportunity and exercising undue influence, then taking a substantial benefit under the will.
7. Once the proponent establishes a prima facie case of sound mind, memory and understanding with reference to the particular will, then the onus of proof switches to the party challenging the will.
8. To displace a prima facie case of capacity and due signing, mere proof of serious illness is not sufficient; there must be clear evidence that undue influence was in fact exercised, or that the illness of the will maker so affected their mental faculties as to make them unable to validly dispose of their property.
9. The opinion of witnesses to the signing of the will as to the testamentary capacity of the will maker is usually of little weight on the direct issue, as the court must decide based on the facts, not opinions.
10. Where instructions for a will are given some time before its signing, it is the capacity as at the date of giving the instructions that is most relevant.

** for the trainspotters, the title here is riffed from the Hall & Oates song ‘Your kiss is on my list’.

And another (new) perspective** on assessing testamentary capacity

Recent posts have considered some of the key issues in relation to assessing testamentary capacity.

Another case that provides an informative perspective on the key issues is Carr v Homersham [2018] NSWCA 65. As usual if you would like a copy of the case please contact me.

The decision confirms that there is a presumption of mental competence that arises in relation to any will that is rational on its face and is duly executed.

The presumption is only displaced by circumstances which raise a doubt as to the existence of the deceased's testamentary capacity at the time the will was signed.

Relevantly, the existence of an 'insane delusion' under which the deceased laboured does not of itself preclude a finding of testamentary capacity if the delusion had no effect upon the will. Helpfully, the case confirms the key factors that are relevant in this regard as follows:

1. It is insufficient to demonstrate the absence of testamentary capacity to prove that the deceased acted on a material mistaken belief in making their will.
2. Instead, for a mistaken belief to rise to the level of a 'delusion' which affects the validity of the will, there must at least be a high degree of irrationality in the belief.
3. Ordinarily, evidence will be required that there has been an attempt to reason the deceased out of the belief, such that the deceased's adherence to it suggests that the deceased has a mental disorder or deficiency precluding the deceased from comprehending and appreciating 'the claims to which they ought to give effect'.
4. Generally, the circumstances must be such that it can be inferred that the deceased was wedded to a mistaken belief, irrespective of its truth. If that is not the case, the belief is likely to be no more than a mistaken view, the holding of which cannot be inferred to reflect on the deceased's mental competence.

Applying the above principles to the factual matrix of the case it was held:

1. A mere mistaken belief is not sufficient to invalidate a will. Instead, there must be an element of irrationality such that an inference can be drawn that the deceased has adhered to the belief regardless of evidence demonstrating its falsity.
2. If the mistaken belief is one that the Court can infer the deceased could have been reasoned out of by the presentation of evidence of its falsity, its origin in a mental deficiency will not be able to be inferred.
3. The fact that the deceased suffered from dementia, was not inconsistent with her retaining testamentary capacity at the relevant time. While it was clear that the deceased's memory difficulties were at least in part reflective of that disorder, there was no evidence indicating that the existence dementia impacted on the deceased's mistaken belief that was in issue in the case. 

** for the trainspotters, the title here is riffed from the Panic at the Disco song ‘New Perspective’.

Assessing Testamentary Capacity: A further (+ deeper)** lesson

Last week’s post considered some of the key issues in relation to assessing testamentary capacity.

A case that provides an interesting further insight into the issues that should be considered is Roche v Roche & Anor [2017] SASC 8. As usual if you would like a copy of the case please contact me.

Relevantly, the decision confirms that, as with many other 19th century common law principles governing the legal effect of mental illness, the statements in Banks v Goodfellow (see the links in last week’s post that provide a summary of this case) no longer fully reflect modern medical knowledge.

That is, it is now recognised that there are a broad range of cognitive, emotional and mental dysfunctions, the effects of which are difficult to identify precisely or delineate from the exercise of ones ‘natural faculties’ and the reasoning capacity of a ‘sound’ mind.

What this means in a practical sense is that the rules as to assessing testamentary capacity must recognise and allow for the natural decline in cognitive functioning and mental state due to old age.

While the rules in the Banks decision therefore still provide a useful starting point, the courts also acknowledge that many wills are made by people of advanced years.

In these situations, slowness, illness, feebleness and eccentricity will sometimes be apparent. However, the presence of these factors is not ordinarily sufficient, if proved, to disentitle a will maker of the right to dispose of their property by will.

** for the trainspotters, a classic song from The Church album ‘Further, Deeper’, namely ‘Miami’.

Case Study: Assessing** Testamentary Capacity

Earlier posts have examined the 12 general rules that should be used when assessing the testamentary capacity of a will maker, as usual, please let me know if you would like access to this content.

The decision of Ruskey-Fleming v Cook [2013] QSC 142 provides an interesting further example of the issues that should be considered and as usual if you would like a copy of the case please contact me.

The case involved an application to court by Ms Ruskey-Fleming (the will maker's daughter) to confirm the validity of the deceased’s 2007 will. The deceased’s son claimed that his father did not have testamentary capacity to execute the 2007 will and that an earlier document, made in 2000, should be treated as the last will.

Importantly, the 2007 will made greater provision for the daughter compared to the 2000 will.

The court reaffirmed the test outlined in Banks v Goodfellow (1870) LR 5 QB 549 as the starting point for assessing testamentary capacity. It was also confirmed that this test needs to be adapted to reflect modern life, particularly in relation to how financial affairs are now managed.

It was held that a will maker does not need to know the details and value of every single asset they own in order to prove that they have testamentary capacity, particularly where share portfolios are involved. What is important is that the will maker is aware generally of their assets and value.

The court found that the testator did not have testamentary capacity in relation to the 2007 will as he:

1. suffered from confusion and disorientation over a lengthy period of time which was evident from medical records and MMSE test results;
2. could not correctly answer the solicitor’s questions in relation to the number and identity of his children and grandchildren;
3. was not aware if he had previously executed an enduring power of attorney;
4. was not able to provide the solicitor with details about his assets and their value; and
5. could not provide a reason for why he was changing his will – which would favour the daughter over the son.

** for the trainspotters, the title here is riffed from the No Doubt song ‘Artificial Sweetener’.

Testamentary capacity

Recent posts have considered various aspects of assessing a will maker's testamentary capacity. 

One issue that has come up recently is the ability for the lawyers to make the relevant assessment, where all client meetings are web-based.

Perhaps somewhat counter-intuitively, the ability to assess testamentary capacity via web platform is often superior to the traditional, face-to-face, delivery of legal services. The reasons for this include:

1. generally lawyers conducting a meeting should have the general rules for assessing the testamentary capacity of a will maker top of mind at the time of conducting the web based meeting, and asks probing questions crafted to test the criteria; 
2. at View Legal, the estate planning platform via the web is a strictly wholesale platform, each client can only access the solution if their financial adviser or accountant facilitates the process; 
3. generally, any client that has an ongoing relationship with a financial adviser or accountant has a very good understanding of their financial affairs and the significance of them; 
4. the financial adviser or accountant facilitating the process will be considered by the client as their 'trusted adviser' and will often have a deep, longstanding and regular relationship with the client. Rarely do traditional law firms enjoy such a relationship with a client; 
5. as the adviser and View Legal work collaboratively, sensitive issues such as capacity of the client are far easier to raise, discuss and address; 
6. again, largely due to the collaborative approach between the adviser and View Legal, the lawyer will have received and reviewed a significant amount of detailed information about the client, which in comparison is often far more comprehensive than in the traditional process. This allows View Legal to ask far more probing and relevant questions as part of the web-based meeting; 
7. the web-based meeting is fully recorded (with the client's consent), which provides significant evidentiary advantages if ever needed, as compared to the traditional approach; and 
8. finally, the signing meeting is regularly hosted by the referring trusted adviser, who in most instances, will be best placed to very quickly identify if there has been a significant deterioration in the mental capacity of the client.

Until next week.

Assessing Testamentary Capacity (Part II)

Last week's post looked at the general rules for assessing the testamentary capacity of a will maker. In particular, six of the twelve main items to consider were listed.

As promised, this week's post lists the other six main issues to consider, which are as follows:

1. the person does not seem unduly influenced by others about their decision making; 
2. the person does not display an unreasonably low level of concern with the activities of other people (particularly their immediate family members); 
3. the person does not display an unduly low ability to adapt to change; 
4. the person did not appear to be prone to unduly losing things or themselves getting lost; 
5. there is no reason to believe the person has recently undergone a change in behaviour or experienced a change in personality; and
6. there is no reason to believe that there are any other factors present that might indicate impaired testamentary or decision-making capacity. 

In next week's post, we will consider some specific issues in relation to assessing testamentary capacity in a web-based environment.

Until next week.

Assessing testamentary capacity (part I)

One issue that comes up relatively regularly is the ability of a lawyer to determine whether a client has the required capacity to make a will.

Arguably, the leading case in relation to testamentary capacity dates back many years and is the decision in Banks v Goodfellow [1870] 5 LR QB 549. If you would like a full copy of the court decision please email me directly.

As set out in the decision, and as subsequently adopted and expanded on in many related cases, there are a number of key tests that a lawyer or witness to a will should consider.

The first six of these considerations are set out below (next week's post will summarise another six tests):

1. there is no reason to consider that the person has a diagnosed condition that may affect their decision-making capacity (such as an intellectual or psychiatric disability, acquired brain injury or dementia); 
2. the person does not seem unduly forgetful of recent events; 
3. the person does not repeat themselves unduly; 
4. the person seems able to grasp new ideas; 
5. the person does not seem unduly anxious about having to make decisions; and 
6. the person does not seem unduly irritable or upset about their ability to manage tasks. 

Until next week.

Using court drafted wills to achieve asset protection and tax planning

Photo Credit: Joe Gratz via Compfight cc

Last week's post focused on the recent case of Re Matsis. This recent decision was one of the first situations where a court permitted a new will to be prepared for someone who had lost capacity where the primary reason for the application was not that the person had no will. Instead, the catalyst was that the beneficiaries were wanting to ensure the appropriate level of commercial asset protection and tax planning would be available.

The decision is particularly important because there are other cases where, in the past, similar requests have been denied.

Arguably, the important factors here included:

1. evidence was able to be shown that the will that was in place before the will maker lost capacity was largely seen by him as an 'interim' document; 
2. the only person who could have brought a challenge against the estate was the will maker's daughter, who indicated in the proceedings that she was independently wealthy and had no intention of challenging the estate; 
3. the ultimate beneficiaries of the estate (and the people bringing the application) were the will maker's grandsons. While each of them potentially had asset protection risks, none of them were aware of any potential litigation; 
4. the change to the existing will did not alter any of the provisions in relation to, for example, executorship or any specific gifts; 
5. while the grandsons lost direct entitlement by the inclusion of the testamentary trusts, they were still ultimately the likely potential beneficiaries via the trust structures; and 
6. the court accepted evidence that the will maker may well have himself implemented testamentary trust provisions, had he not lost capacity. 

Until next week.

Court drafted wills

One of the more fundamental developments in relation to estate planning in recent years has been the introduction in most Australian states of government legislation empowering courts to make wills on behalf of people who otherwise lack the capacity.

There have been an increasing number of cases to go through the courts in this area. The recent Queensland case of Re Matsis; Charalambous v Charalambous & Others [2012] QSC 439 is particularly interesting as it appears to be the first case that allowed a court-ordered will where the primary objective was not because the relevant incapacitated person had no will at all. Rather the situation was that the pre-existing will did not achieve the appropriate asset protection and tax planning objectives of the ultimate beneficiaries.

For those interested in reading a full copy of the decision, a link to the judgment is as follows: http://www.austlii.edu.au/au/cases/qld/QSC/2012/349.html.

The case involved a businessman who had accumulated some millions of dollars of wealth and who had signed an 'interim' will, which did not incorporate any testamentary trusts, sometime before losing capacity to dementia.

On the application of the ultimate beneficiaries, the court allowed them to introduce comprehensive testamentary trust provisions into the will as if they were inserted before the will maker's death.

Next week's post will focus on some of the key aspects that the court took into account before allowing the variation to the will.

Until next week.