Armchair notepad memo ruled to be a valid will, just

Valid wills can be made in unconventional and informal ways even by video, notepad memo or even on the back of an envelope.

That said, the risks of departing from the strict requirements of a formal will are enormous and the expense to which an estate can be put to prove validity, equally huge.

Consider the case of Ken Young who died in August 2022 – at age 85 – without any known will.  Ken was divorced, had no children and his closest relatives were his niece and two nephews.

After his death, niece Anthea located a notebook on his armchair in which he regularly made notes.

Three pages of his notebook contained instructions that read like a will and were headed “Consider this my will”.

The pages contained instructions for the distribution of all of his possessions and money which was all to go to Anthea.  He also specifically noted – with reasons for this decision – that he did not want any benefit to go to his nephews.

To get the benefits the pages appeared to bestow upon her, Anthea needed to convince a judge that the document – which was not signed with usual formalities of a formal will – purported to state Kenneth’s testamentary intentions.

Ken had signed each of the 3 notebook pages – exactly when was unknown – but there has been no witness to his signature.

If the notepad was held not to be a valid will, Ken’s estate would pass according to the laws of intestacy in equal shares between Anthea and Ken’s nephews.

Naturally the nephews were given notice of Anthea’s application to the court but did not contest her claim the NSW Supreme Court.

Anthea was able to convince Chief Justice in Equity David Hammerschlag that the notepad was indeed an informal will because the notepad pages had been written and signed by Ken and showed he intended the notes to form his will by the use of the introductory words, “Consider this my will”.

Further, the pages gave testamentary instructions, namely to give his estate to Anthea and to exclude his nephews.

Informal notes can be declared valid, but the process of having them declared to be lawful is fraught with uncertainty. Professionally drafted wills the anxiety and cost of court applications that are necessary to determine the legitimacy of something done informally.

The Estate of Young [2024] NSWSC 569 Hammerschlag CJ in Eq, 10 May 2024 Read case

source https://qldestatelawyers.com.au/armchair-notepad-memo-ruled-to-be-a-valid-will-just/

Disinherited step-children have modest win after tragic rupture

Can a parent successfully disinherit children or step-children who allege sexual abuse against them, a crime of which they are subsequently acquitted by a court?

Adam Fornari died on 13 August 2022, aged 58. His assets – the net value of which was just in excess of $1,000,000 – consisted in the main, of two farm blocks of 670 acres near Mudgee in New South Wales.

He had been in a 20 year relationship with Karen Hibberd until December 2019. Karen’s three infant children from a prior relationship – Kirt, Kimberley and Kyle then aged 7, 4 and 2 – began living with the deceased at the start of the couple’s relationship.

The family remained together at Faulconbridge – in the Blue Mountains west of Sydney – with Adam present and involved in the bringing up of the three children for the whole of their childhood in the absence of their biological father.

The couple purchased the Mudgee farms in 2003 and the family holidayed there regularly.

Kimberley left school at 18 and had three children from 2 relationships and by 2019 she, her 3 children and then partner Wayne moved in to the Faulconbridge home.

Kyle and his child and his partner Taylor and her child also moved in in October 2019.

Kirt also lived at the property, sleeping on the couch. So crowded wad the home – with Kimberley’s two eldest children sleeping in the main bedroom – that the only place for Adam to sleep was in a pine log cubby house in the backyard.

Those arrangements put Adam’s relationship with the other occupants – none of the adults among them having jobs – under severe stress.

In December 2019 Kimberley revealed to her mother that she had been sexually abused by Adam from age 6 until she was 12. That bombshell lead to Adam’s arrest for crimes of which he was ultimately acquitted at trial.

Unsurprisingly, his relationship with all of his step-children came to an abrupt end and they never spoke again.

So did his relationship with Karen with whom he reached a property settlement in August 2021 transferring the Faulconbridge residence to her. Adam received the two farm blocks and a portion of Karen’s superanuation.

Adam’s life went downhill from there.

His health took a turn for the worse, he lost his job and the day before he was to move into the farmhouse it mysteriously burned to the ground.

His sister Debra Wright – a full time police officer with relationship problems of her own – provided moral support and spent her own money to assist with legal costs and other expenses he couldn’t afford to meet.

She also regularly did his grocery shopping and prepared his meals. Adam was in fact, emotionally and financially dependent on her.

For that reason, his will of March 2022 left his whole estate to her.

All three of the stepchildren challenged the will in the NSW Supreme Court and sought provision be made for them out of the estate.

Kirt’s claim was resolved prior to the trial and so the court was left to consider what provision if any, should be made for Kimberley and for Kyle.

Debra accepted they were eligible to seek a provision as – although they were no longer stepchildren – they had been part of the deceased’s household and had been financial dependents.

Kimberley and Kyle had though to prove the factors in their favour, that warranted a provision being made.

Justice James Hmelnitsky KC agreed factors had been established – in that they had grown up in Adam’s household; he had been their father figure; he had been in a long term relationship with their mother; they had little if any contact with their biological father; and the family home and farm blocks had been co-owned by the couple – that warranted their applications for provision.

His honour then turned his mind to whether they should each receive the $200,000 they claimed from the estate despite their total estrangement from the deceased.

Debra argued that no provision should be made given the catastrophic allegations of sexual abuse that destroyed the relationship and resulted in the family rupture. Their stepfather – she asserted – had no longer, any moral duty to provide for their needs as adult children of a former partner.

Justice Hmelnitsky agreed.

“There is real doubt about whether the community would expect the deceased to make any provision for the maintenance of Kimberley and Kyle in his will,” he observed.

They were after all adult children of a former partner, estranged, and the deceased had already “done more than what society would ordinarily expect”.

Also relevant was that the estate had been left to his sister Debra in no way to punish the stepchildren but rather, to reflect his “genuine and heartfelt affection for his sister, whose unquestioning support he understandably wished to recognise”.

Kimberley and Kyle were nevertheless held to be entitled to some small provision for two reasons. First, the extent of the historical connection between them and the deceased as their parent for virtually all their childhood and second because there was no evidence by which Kimberley could be blamed for her unproved allegations and Kyle could not be blamed for siding with his sister.

Thus, although the estrangement caused a “significant weakening of the moral obligations”, it did not entirely negative the deceased’s obligations.

The judge ordered Kimberley receive $50,000 and Kyle $40,000. Kimberley received more as she was found to have greater financial need.

Neither award would give them financial independence, but the judge’s view was that the deceased had no obligation to achieve that for them.

The question of costs was left for another day. The amounts ultimately payable to Kimberley and Kyle may in fact end up being reduced by costs orders, particularly if Debra had offered at any time to pay them more than what was ultimately ordered.

Note that in Queensland, neither Kimberley or Kyle would have been eligible to seek any provision as their entitlement is deemed to have ceased when their mother’s relationship with the deceased ended – before his death – at which time they ceased to be his stepchildren.

Wilson v Wright; Wilson v Wright [2024] NSWSC 519 Hmelnitsky J, 7 May 2024  Read case

source https://qldestatelawyers.com.au/disinherited-step-children-have-modest-win-after-tragic-rupture/

Cautious administrator seeks court guidance amid beneficiary discord

Veronica Hurren died in March 2009 survived by children John, Peter and Lynne.

Her last will appointed Toby Jacobs as executor, made some minor gifts and then left the rest and residue of the estate equally between the three adult offspring.

Jacobs did nothing to administer the estate for many years.  John applied to the Supreme Court of Queensland and in September 2018 obtained orders from Justice Martin Burns removing him as executor.

The judge appointed an independent administrator – solicitor John Fradgley – to administer the estate given what he took to be heightened conflict among the beneficiaries.

The estate consisted of 2 properties at Biggera Waters, in which daughter Lynne and Jacobs occupied from time to time without the estate’s consent.

Fradgley asked them to vacate and when they refused, he started actions in the Magistrates Court and in QCAT eventually selling the properties after achieving vacant possession in October 2019, for a net sum of almost $1.5 mil.

A valuer assessed the rent lost to the estate from the unauthorized occupation of the properties by Lynne and Jacobs over 10 years from 2009 at $266,000.

The administrator decided not to pursue Jacobs as he appeared to have no assets but considered recovering the forgone rent from Lynne by way of an adjustment to her estate share.

Having eventually decided to pursue neither of them, Fradgley sought and obtained advice in August 2021 from the Supreme Court confirming the validity of that approach from Justice Peter Applegarth.

Peter nevertheless pressed the administrator to sue Lynne for the foregone rent or a share of it.

He wanted Fradgley to recover the lost rent, Fradgley did not want to waste time and legal costs on likely futile legal proceedings and Lynne wanted to avoid any payment.

This issue went back and forth between the three protagonists until late 2022.

The dispute was nearly resolved with an in-principle agreement that Lynne would pay half the lost rent, but she changed her mind and refused to formalise that arrangement.

Fradgley – who was ‘between a rock and a hard place’ in estate administration land – faced mounting criticism from Peter for sitting on his hands.

The administrator decided to get advice and directions from the Supreme Court for a second time.

He applied to the court, outlining the background and circumstances and asking for an order that would permit him to deduct $133,000 – half the sum in dispute – from Lynne’s estate share in line with the earlier proposal.

Due to be heard in early-2023 but delayed by Lynne until December 2023, the matter came before Justice Martin Burns who approved administrator Fradgley’s request.

The case demonstrates the caution that is called for in estate administration. It also illustrates the importance of choosing a competent executor to avoid the huge expense by which an estate can be burdened by the appointment of an independent administrator.

The legal costs incurred in the nearly 15 years from Veronica’s death are likely to be enormous.

Re Estate of Hurren [2023] QSC 287 Burns J 23 December 2023

source https://qldestatelawyers.com.au/cautious-administrator-seeks-court-guidance-amid-beneficiary-discord/

Whistleblower gets up over sibling in bitter estate battle

Social media is cropping up in the most unlikely of places.

And a court has ruled that videos posted publicly can constitute an offer of settlement to a party in litigation.

The dispute in which the ruling arose relates to former military lawyer David McBride – who last November pleaded guilty to revealing national defence secrets to journalists – in a challenge to the will of his mother Patricia who died in November 2021.

Patricia was survived by David and his three siblings. Her husband Dr William McBride – the Sydney obstetrician who was the first to warn of the dangers of thalidomide – had died in 2018.

She made a will in 2014 appointing her daughter Louise – a Sydney tax barrister – as executor and beneficiary of the bulk of her estate, its major asset being a harbour-view apartment in Neutral Bay where Louise lives and carries on her legal practice.

David was left some personal items and a legacy of $10,000.

After Louise distributed the estate – but just within the 12 month time limit – David filed court proceedings seeking a larger share.

Louise answered the claim by contending David’s social video posts – saying he needed $10,000 from the estate to fund his whistleblower defence to the charge of leaking Australia’s Afghanistan war secrets and that maybe the estate could pay it – was a settlement offer that she had duly accepted.

Acting Justice Michael Elkaim noted that because David was awaiting trial on those criminal charges when the video was posted, he “was very much in the public eye” and “anxious to amass funds for his defence”.

Louise stumbled when asked to identify the specific words from the video that constituted the offer, arguing his intent was “discernable” from the context and content.

Against this contention, his honour noted – among other things – that the post made no mention of how legal costs were to be resolved as is the usual case for settlement offers.

The judge accepted that an offer can be inferred from conduct and can be made through social media as Louise had argued but rejected the submission that his video post was indeed an offer to settle the estate dispute proceedings.

Louise’s application for orders declaring that the matter had been settled, was dismissed.

The trial of the dispute will come before the NSW Supreme Court in the coming months, if not resolved earlier by a negotiated agreement.

This decision demonstrates once again that care should be taken when posting on social media, especially when a party to court proceedings.

McBride v McBride [2024] NSWSC 45 Elkaim AJ, 2 February 2024

source https://qldestatelawyers.com.au/whistleblower-gets-up-over-sibling-in-bitter-estate-battle/

“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/