“Unmeritorious”: costs ordered against family provision applicant

Lawsuits motivated by ill-will or emotions often end in tears as is demonstrated in the case of this family provision applicant.

Desmond Guy died in July 2020 aged 95 without a will and survived by 6 children, a daughter from his first marriage and five children from his second marriage.

His wife and one child had died before him without any children of their own.

His estate was mainly comprised by real estate in Calliope, near Gladstone.  Under the laws of intestacy, his assets fell to be distributed equally between the 6 surviving children.

In the absence of anyone else having applied to administer the estate and its assets in limbo for more than a year, Rosemary – Desmond’s daughter from his first marriage – applied for letters of administration which were granted in August 2021.

The significant hostility among the siblings likely influenced Scott – one of Rosemary’s half brothers – to file a family provision application in October, seeking more from the estate than his one sixth share.

His brother Lloyd joined in those proceedings in March 2022.

Their family provision application eventually came before the District Court in Rockhampton in September 2023.

At the start of the first day of the trial, Scott withdrew his claim likely based on some firm advice from his lawyers who were given leave by the court to withdraw as his legal representatives.

As it turned out, Scott had withdrawn $45,000 from his father’s bank account after his death. Such conduct was – more likely than not – to reflect poorly on the court’s assessment of his character.

Lloyd – who had in the lead up to the hearing abused and threatened Rosemary and texted a message ‘1 shot 1 kill.  I was a cadet’ – decided to proceed notwithstanding his lawyers had also withdrawn, leaving him to represent himself.

After a one day trial in which he was accorded the customary accommodation to account for the unfamiliarity of DIY litigants with court procedures and rules, Judge Jeffrey Clarke ruled Lloyd to have been an unreliable witness.

Noting that much of his evidence was contradicted by independent accounts of the family circumstances, Lloyd’s claim was dismissed on multiple grounds.

First, it had not been started within the specified 9 months of the date Desmond’s death.

Second, Lloyd failed to establish he had any superior need to that of his siblings that might justify further provision from the estate.

The judge also granted the estate’s application that Lloyd pay some of its costs of the dispute.

He did so because  Lloyd’s prospects of success were – in his view – to have been “very poor, to the point of being futile” and because he had “obstructed [Rosemary’s]’s duty to administer the estate” including by thwarting her attempts to enter the properties to conduct an inventory of estate chattels, even with police assistance.

After allowing for written submissions from the parties as to liability for the estate’s legal costs, Judge Clarke ruled Lloyd’s claim to have been “completely unmeritorious”.

He ordered that part thereof – the sum of $42,000 – be deducted from Lloyd’s entitlements in the estate to go towards its legal costs of defending the doomed-from-the-start claim.

Although not mentioned in the judgment, the estate will also likely deduct the $45,000 removed by Scott from his father’s bank account, from his share of the estate.

Day v Peake [2023] QDC 178 Clarke DCJ 256 September 2023

Day v Peake [No 2] [2023] QDC 200 Clarke DCJ, 3 November 2023

source https://qldestatelawyers.com.au/unmeritorious-costs-ordered-against-family-provision-applicant/

Residuary beneficiary caught out by estate admin convenience steps

Informal agreements regarding the administration of a deceased’s estate can lead to a residuary beneficiary inadvertently relinquishing their estate entitlements.

Consider the case of Ellen McKean who died in April 1992.  By an unusual turn of events, issues concerning her estate came before the Supreme Court of Queensland some 30 years later, in November 2023.

By her last will made in November 1981, Ellen had gifted $5,000 to her brother; $40,000 to her only son, Peter; and the residue of her estate in equal shares to her grandchildren.

In the years following Ellen’s death, all grandchildren agreed with Peter that all estate assets – which consisted of properties at Prosperpine and Dingo Beach – should be transferred from the executors to Peter.

Peter then treated – as from 1995 – all of the assets owned by the estate as his own. He died in November 2020.

It appears that Peter’s will gifted his entire estate – including the assets of Ellen’s estate – to his surviving wife, Trudy.

Recognising that such bequest might defeat her rights to receive her share of Ellen’s estate, Julia Shaw – one of Ellen’s grandchildren – filed a lawsuit for a declaration that she was still entitled to a share of the residue of her grandmother’s estate.

The proceedings – to which Ellen’s estate was the respondent – turned on whether Julia had ‘disclaimed’ her interests therein.

Although uncommon in practice, a beneficiary has the right to disclaim their interest, ie they can refuse to accept a gift given to them by a will.

It was argued by Trudy – Peter’s widow, who also was acting on behalf of Ellen’s estate – that by agreeing to the transfer of estate assets to her father, Julia had disclaimed her entitlements in Ellen’s will.

This argument was supported by Peter and Trudy’s other children, being Julia’s siblings and the other residuary beneficiaries named in Ellen’s will.

On the other hand, Julia contended that the agreements regarding the transfer of estate assets to Peter could not be construed as a disclaimer of her entitlements.

Justice Catherine Muir observed there could be no disclaimer absent an unequivocal rejection of the gift in the will.

In her view, by agreeing to allow estate assets to be transferred to Peter, Julia had not rejected the gift.

On the contrary – Justice Muir noted – Julia had given directions for dealing with her gift in that she had indicated she intended to transfer her inheritance to Peter subject to certain conditions being met.

Interestingly however, the judge did not make any final conclusions or orders regarding Julia’s ownership of any assets of Ellen’s estate.

That was because all parties to the application requested Justice Muir not to determine those additional factors that might – of themselves – have defeated Julia’s claims.

These included whether Julia’s claim was time barred and whether the transfer of her interest in the assets of her grandmother’s estate to Peter in 1995 vested indefeasible title in him so as to prevent Julia claiming an interest by that means.

Those issues will come before the court on another occasion unless the parties agree on a resolution.

The case demonstrates that arrangements between family members need to be properly documented to avoid unintended consequences and expensive legal disputes further down the line.

Shaw v McKean as executor of the estate of the late Ellen Mary May McKean [2023] QSC 261

source https://qldestatelawyers.com.au/residuary-beneficiary-caught-out-by-estate-admin-convenience-steps/

Death benefit nominees disentitled by deceased’s attorney

How can a super fund member empower someone else to alter the terms of the member’s binding nomination to specify different death benefit nominees to receive the member’s fund entitlements?

Robert Stannett was the sole member of a self-managed super fund, the Robert Stannett Superannuation Fund.

The trustee of the fund was Rentis Pty Ltd of which Robert was the sole director as is required for a tax law compliant fund.

In December 2020 Robert fell from a ladder. His resulting brain injury rendered him incapable of managing his own affairs including the fund.

Fortunately he had – prior to that accident – made a will and an enduring power of attorney appointing wife Valerie and brother Peter as his attorneys.

He also had made two binding nominations specifying who would receive his entitlements in the fund and the proceeds of insurance arising as a result of his death.

A valid binding death benefit nomination requires the trustee of a super fund to pay the member’s entitlements and death benefits precisely as directed.

It removes any discretion the fund trustee might otherwise have to consider which of the member’s dependents should receive the death benefits and in what portions, for example according to their financial resources and needs.

The rules of Robert’s fund had been updated in May 2019, a week prior to him making his EPA and prior to making the binding nominations, which update allowed binding nominations to be non-lapsing, ie they did not require regular renewal as is often the case.

The first binding nomination made by Robert in June 2019 directed 100% of his super benefits to Valerie, but if she did not survive him then $200,000 to each of his two children and each of Valerie’s two children with any balance to his estate.

Importantly, his second (and last) binding nomination directed 50% of his super benefits to Valerie, and 25% to each of his children Kylie and Blair.

After Robert had lost capacity in the fall, Valerie died in February 2021 and his brother Peter became his sole attorney.

No doubt to address the death of Valerie, Peter in his capacity as attorney made two new binding nominations on 9 May and 17 May 2022.

In the first, 40% of Robert’s super benefits were allocated to his children Kylie and Blair, and 10% to each of his stepchildren Sharyn and Ross.

In the second, Peter changed the allocation to 25% of the benefits to each of Kylie and Blair, with the remaining 50% to go to Robert’s estate to be distributed in accordance with his will, where it would go to a charity.

Both differed to what Robert had specified before he lost capacity.

Robert died in December 2022, and questions were raised as to whether the binding nominations made by Peter on Robert’s behalf were valid.

Justice Peter Applegarth noted that – at least in Queensland – it is settled law that the making of a binding nomination is the exercise of a financial power that an attorney can lawfully perform for their principal.

But had the EPOA been sufficiently drafted so as to include such a power?

There was an express term in Robert’s EPOA authorised Peter as his attorney to “renew any binding death benefit nomination made by me for any superannuation benefits or entitlement.”

In deciding whether the term “renew” included “making on different terms”, Justice Applegarth had to consider whether to adopt a narrow interpretation that excluded the latter meaning or one which appeared to suit the grantor’s intentions.

Given that the recently updated super fund rules meant binding nominations did not lapse at all, it was helfd that a narrow interpretation – which would result in the power being of no effect – should be avoided.

His honour preferred a more sensible interpretation of “renew” being the dictionary definition which is “restore to freshness” or “make like new”. That interpretation permitted Peter as attorney to make a new binding nomination that addressed fresh or changed circumstances.

It was further argued that Peter’s second binding nomination – of which gifted 50% of Robert’s super to charity – did not properly reflect Robert’s testamentary intentions.

His honour noted the matter before him only concerned whether Peter as attorney had the power to make  the last binding nomination, not with whether Peter should have exercised his power in the way that he did. That dispute was left for another day.

In accordance with what was found to be the more sensible interpretation, Justice Applegarth held that the last binding nomination was within Peter’s authority and was validly made.

This case demonstrates the importance of considering estate planning holistically and not making wills, powers of attorney and super fund nominations independently of each other.

Re Rentis Pty Ltd [2023] QSC 252

 

source https://qldestatelawyers.com.au/death-benefit-nominees-disentitled-by-deceaseds-attorney/

Unconventionally signed DIY will declared valid at considerable expense

Regrettably DIY wills almost invariably lead to the will-maker’s estate being put to unnecessary expense to overcome validity or interpretation issues and other legal problems.

Kevin Chambers died on 17 March 2023 at the age of 91.  His wife and son died before him and he was survived by his daughter Cherie.

He made his will in October 2017 – after the death of his son – leaving everything to Cherie and appointing his friend Daniel to be the executor.

Kevin used a pre-printed will kit will, which he likely purchased at the local newsagent or post office.

Kevin filled in the DIY forms. The will was comprised by two pages, and on page 1 – after naming his grandson Daniel as executor – he specified in clause 3 that he gave Cherie “my entire estate”.

He then signed the will adjacent to clause 3 and at the bottom of page 1 but not in the usual place at the end of the will.

Despite there being further sections that could be completed on page 2, Kevin added nothing further on that page.

He failed to sign the attestation clause on that page, despite directions on the pre-printed form to do so.

Kevin’s will was witnessed by two friends. They did not sign on page 1 at either of the two places where Kevin had signed. They signed at the attestation clause at the bottom of page 2 where directed where Kevin had failed to do so.

Daniel did not take up his role as executor and instead Cherie applied for a Grant of Letters of Administration as the sole beneficiary, claiming that the will was validly made.

Whilst it was quite clear Kevin had intended to make a will, the fact he had signed it only on page 1 and not the attestation clause at it end where the witnesses had signed, caused the Probate Registrar to have concerns.

In her opinion the will was not validly executed in accordance with the requirements of s 10 of the Succession Act. She directed that the validity issue be heard and determined by a judge of the Supreme Court.

When the matter came before him, Justice Peter Davis declared the will to have been validly made despite the irregularities in how Kevin and the witnesses had signed it.

In his view, the irregularities did not mean the formal requirements of s 10 had not been met.

“Neither the positioning of Kevin’s signature on the first page, nor his failure to sign the second page, constitute a breach of the requirements,” he observed.

“There is nothing in s 10 which suggests that the witnesses must sign on the same page or place as the testator,” he ruled.

Given it was beyond dispute that Kevin signed the will with two witnesses who were present to see him do so and the witnesses each attested and signed the will in front of Kevin, all required formalities had been met.

That Kevin and the witnesses did not sign the will at all the required places unnecessarily complicated what otherwise was a straightforward probate application and added significant expense.

Attempts to save expense by completing a DIY will – rather than one prepared by an experienced solicitor – almost invariably add such expense to estate administration and regrettably, delay the process by many months.

Re Chambers (dec’d) [2023] QSC 230 Davis J, 13 October 2023

source https://qldestatelawyers.com.au/unconventionally-signed-diy-will-declared-valid-at-considerable-expense/

Capacity fight over a delusion daughter was a witch

Issues concerning a will-maker’s “capacity” usually relate to dementia and the like. Sometimes though, they traverse broader aberrations of the mind such as delusions, fantasies and superstitions.

Jan Grzeczny was born in Poland in 1920 and migrated to Australia in 1949.

He married Maria in 1951.  They had a daughter, Teresa – born in 1952 – the same year in which Jan adopted Maria’s son Richard from a former relationship as his son.

Teresa and Richard became estranged from both Jan and Maria in the 1970s and thereafter had minimal contact. Teresa became somewhat closer to them from 2015.

Jan died in December 2018, at the age of 97. He was until then living independently in a Perth suburb and was still driving and managing his own finances.

Richard and Teresa were not named as beneficiaries in any of the wills he had made in 1981, 2014, 2017 or 2018.

In the 1981 will, Maria was appointed the executor and sole residuary beneficiary. Maria had though predeceased Jan which thereby granting to Richard and Teresa standing under the rules of intestacy to claim the entire estate if the 1981 will was propounded.

To prove their entitlement in intestacy, they had to clear off all the subsequent wills including that of 2018 where Jan had appointed Joachim and Maria‑Luise Diedler – whom he had known since 1989 – as residuary beneficiaries.

In September 2019 Teresa applied to the Western Australian Supreme Court for a Grant of Letters of Administration of the 1981 will arguing that the later wills were all invalid due to delusions she claimed had plagued her father.

The Public Trustee of WA, who had assisted Jan in the preparation of the 2018 will was named as executor but renounced its appointment.

Joachim and Marie-Luise themselves applied for a grant which led to a contest before Justice Natalie Whitby in a July 2023 trial.

The well known prerequisites for establishing legal capacity include a comprehension on the part of the will-maker of all those persons who have a reasonable claim to receive part of their estate.

He or she must also be absent of any disorder of the mind or delusion that “poisons their affections” or influences the contents of the will.

Justice Whitby was satisfied that Jan comprehended his children’s rightful claims but that for various reasons he chose not to provide for them.

She further concluded that Jan was indeed affected by delusions that had poisoned his mind in arriving at those decisions.

Against the contentions advanced by Joachim and Marie-Luise, the evidence clearly demonstrated he thought Teresa was a “witch” who was trying to poison him and had flown through his window to steal from him.

As to Richard, Jan harbored a delusion that he had tried to poison his coffee in 2014.

Her honour ruled those delusions influenced the will-maker to not provide for his children in his 2018 will and that in the absence of those delusions, they would likely have been included as beneficiaries.

The evidence “overwhelmingly supports a conclusion that the deceased did not have testamentary capacity when he made the 2018 will,” Justice Whitby concluded. “The 2018 will is not valid.”

Her honour went on to say that because the evidence supported a finding that Jan was suffering from the delusions from at least 2012, the validity of the 2014 and 2017 wills was also called into question.

It was in her view inappropriate to make any final determination of their validity until all of the beneficiaries under those wills had been given an opportunity to be heard.

A further contest may ensue if any beneficiary decides to argue that either of the 2014 or 2017 wills are valid.

Diedler -v- Borowiec [No 2] [2023] WASC 396 Whitby J, 18 October 2023

source https://qldestatelawyers.com.au/capacity-fight-over-a-delusion-daughter-was-a-witch/

Disinherited child denied estate provision – needs “fully covered” by NDIS

Family provision applications enable an eligible person to seek “adequate provision” for their “proper maintenance and support” from the estate of a deceased person when something less or nothing at all has been provided for them.

There is no mathematical formula and in practice, the courts can consider practically anything that they deem relevant to determine and order “such provision as the court thinks fit”.

At a minimum, a prospective applicant must be able to show they are an eligible person, ie a dependent or a family member; that they need a better provision from the deceased’s estate than has been provided; and in all the circumstances it is just and reasonable that the estate of the deceased person ought to provide a greater benefit.

What about dependents who have a disability?

That the needs of a disabled dependent might ordinarily be met from social security and welfare entitlements – eg NDIS or a disability pension – does not disentitle them from a proper and just provision from a deceased estate.

Disability sometimes leads to a legal tension  in the context of what provision ought to be made for a person who is in receipt of such assistance and entitlements.

Consider the case of Luis Oliveira who died in 2019.  He was survived by his wife, Felicidade, to whom he had been married for more than 50 years, and their 7 children.

Luis’ will left the entirety of his $550,000 estate to his wife who had recently been diagnosed with Alzheimer’s Disease and was in assisted-care living.  Felicidade also gained sole entitlement to $730,000 held in a joint bank account. No benefits were provided to any of the children who were all adults.

Maria – who has a particularly severe form of Down’s Syndrome as well as other medical conditions and is non-verbal – filed proceedings in the NSW Supreme Court for a share of her deceased father’s estate.

In considering the claim, Justice Francois Kunc was mindful of her disability and needs but noted that her ongoing medical and personal needs were fully covered by her NDIS package and social security entitlements.

Her brother acting as her advocate claimed that – regardless of her medical and personal needs being covered by existing arrangements – she was in need of provision of a significant lump sum to cover ‘contingencies’ that might occur.

Rather than presenting expert or other evidence as to her additional needs – or the likelihood of medical and other expenses that should be budgeted for – Maria’s advocate could only speculate on what those future needs might be.

Although courts frequently make allowances for reasoned future contingencies supported by medical experts, Justice Kunc was not prepared in this instance to rely on mere speculation.

He observed that foreseeable expenses were covered by Medicare for medical issues and the NDIS package for personal needs.

As she was in receipt of social security benefits, she will – so held the court – never be affected by unemployment and had no assets of value that might be lost or destroyed.

All “current needs are being met and there is no reason to think that that will change,” ruled the judge.

Having failed to establish she had received inadequate provision -given her immediate needs and future needs were satisfied – her claim was dismissed.

The court’s reasoning may appear somewhat callous cold or crude. Other cases with similar facts have resulted differently. A further provision was made for a disabled child has been approved where need – over and above available benefits – has been demonstrated.[1]

Maria Oliveria by her tutor Ivo De Oliveira v John Antonio Oliveira [2023] NSWSC 1130 Read case

[1] Abrahams v Abrahams [2015] QCA 286

source https://qldestatelawyers.com.au/disabled-child-already-has-proper-maintenance-and-support-from-ndis/

DIY unsigned will: witness accounts differ but doc declared valid

DIY wills often survive contests over their legal validity but invariably put the will-maker’s estate to enormous expense to establish their legitimacy.

Leslie Turnbull died on 8 October 2022 with no spouse and one living child, Alexander.

Having been diagnosed with terminal lung cancer in late-2017 or early-2018, he was advised to put his affairs in order.

Leslie obtained a DIY will form of the type sold by newsagents.

He completed the form with directions as to the distribution of his assets before two friends who signed as witnesses. But at no stage did Leslie actually sign the will himself.

Leslie’s estate consisted of $147,000 in bank funds and homes at Lawnton and Everton Hills.

The will form appointed his brother Ken to be executor and provided a specific gift of “my car” to friend Lee Hornby who was one of the two witnesses of to the will.

Everything else was left to Alexander.

Where a will is signed in accordance with statutory formalities and requirements, it is presumed to be valid unless proven otherwise.

On that basis the vast majority of applications for probate are dealt with relatively inexpensively by the Probate Registrar without a court hearing.

But where there is contention or uncertainty, the issues are likely to be referred to a judge of the Supreme Court for determination.

In Leslie’s case the executor had to ask the Supreme Court to issue a grant of probate in respect of his ‘informal will’.

The court was prepared to accept the that the document stated the will-maker’s intentions and that it was ‘testamentary’ in nature.

But whether or not Leslie intended it to constitute his will really depended on whether or not he had intentionally deferred signing it, or whether that was in oversight.

There were some differences in the recollection of the two witnesses in that regard.

Witness Hornby recalled “Leslie said to me that he would get us back together again at a later time to finish signing it properly”.

The other witness, Stephanie Wood swore that Leslie had said to her “words to the effect that he would sign the purported will after I left”.

Justice Peter Davis had to weigh up all available facts.

“The evidence is strong that Leslie intended the will to be effective immediately and operate upon his death,” he concluded, pointing to the facts that he was terminally ill when he had made it and that he had later told Ken of all its terms.

The judge also noted the will was found where the will-maker had been seen to place it – inside a “buffet” cabinet where he kept important documents.

“Had Leslie changed his mind and not wished to execute the will, he would surely have destroyed it rather than keeping it in a safe place with other important documents,” Justice Davis observed.

Ultimately, the judge was satisfied that the surrounding circumstances demonstrated Leslie’s intention that the unsigned document was intended to be his will.

Not only did the DIY will cause the estate enormous expense, the exercise took nearly 9 months to resolve.

Re Turnbull (dec’d) [2023] QSC 140 Davis J, 27 June 2023

source https://qldestatelawyers.com.au/diy-unsigned-will-witness-accounts-differ-but-doc-declared-valid/