Types of Will Disputes
The construction or rectification of a will.
The general principles of ‘Construction’ and ‘Rectification’ law in Australia are the same for each State. In NSW however there is specific provision in the Succession Act 2006 to rectify NSW wills. The general rules apply when the will maker fails to make his/her intentions clear in the Will itself or makes an error in the will. Only a judge can make that determination following a court case with all the evidence put forward.
If the will maker expresses his/her intentions clearly and best of all in simple language, there will be no argument as what was meant and as well, simple errors will judged as simple errors if the will is otherwise clear. As usual in wills and estates work every case will be different.
The judge must make a decision in these cases as to what was meant by the will maker, not guess the intention and generally cannot hear evidence about intention of the will maker but rather to come to a conclusion by looking at the words of the will itself. A judge cannot simply.
The only time a judge may permit evidence to be given in court regarding the will maker’s intention would be in a case involving ambiguous terms in the will and the judge would entertain evidence regarding the will maker’s use of certain words or terms during his/her lifetime which may have a different meaning to the usual meaning.
So, construction and rectification cases are very legalistic. In most cases common sense will not prevail as the law is to be strictly adhered to which many people find very frustrating. You may feel you know precisely what was meant in a will and that in your eyes there is no ambiguity or incorrect words however I court /judge may hold a completely different view. As usual the loser pays the costs unless the court considers the case was somehow the fault of the will maker or his/her solicitor.
The administration or distribution of an estate.
Generally speaking an executor or administrator has at least 12 months in which to administer the estate and distribute the assets to the beneficiaries. Accordingly unless there were extreme reasons you would not commence proceedings against an executor or administrator with 12 months from the grant of probate.
There are probably more arguments about the administration and distribution of an estate than any other area in wills and estate law.
The fault I believe lies in the fact that most beneficiaries are not told about their rights and the role of the executor and administrator from the very beginning. Let me explain;
To begin you must understand that at law when probate or administration is granted to the executor or administrator that means that that person or those persons or the ‘Public Trustee’ or other similar body have been granted the assets of the estate in their name to deal with in accordance with law. In effect they can deal with the assets as if they were their own because legally they own the assets (as trustee for the beneficiaries).
So, if the executor/s or administrator/s have such rights they can administer the estate the best way they see fit and generally there is nothing the beneficiaries can do about it (for about the first 12 months). The beneficiaries are not entitled to tell the executor/s or administrator/s what to do or how to do it. And, the executor/s or administrator/s do not have to ask the beneficiaries permission to do anything or even in most cases even tell them what is being done.
However once a sufficient period of time has passes (usually about 12 months) and beneficiaries are not happy about the administration or distribution of the estate they can commence proceedings to attempt to rectify the position including claiming negligence on the part of the executor/s or administrator/s and seeking refund of money wrongfully transferred or interest on money which was held back.
Please note that whilst I have referred to complaints to be made after about 12 months there certainly are many cases where proceedings against the executor/s or administrator/s are warranted well within 12 months. Some complaints are more urgent than others so as usual, every case will be different. In the next paragraph I have set out in summary the role of executor/s or administrator/s and you will observe that there are many areas where a dispute may arise and some would obviously need to be addressed sooner than others.
The duties of executor/s or administrator/s include;
- Locating the will of the deceased if not already in their possession.
- Arranging burial or cremation of the deceased.
- Choosing a solicitor to help them if necessary and avoiding any conflict of interest in the choice.
- Ascertaining and itemise the assets and liability of the estate.
- Obtaining with the help of their solicitor a grant of probate.
- Collecting all the assets of the estate possibly including superannuation funds.
- Paying out all debts of the estate in readiness to distribute the net assets of the estate.
- Lodge tax returns and pay any Federal or State taxes.
- Ensure the value estate has been preserved (or enhanced if applicable) and to defend and claims against the estate believed to be without merit.
- Compromise any claim against the estate believed to have merit.
- Distribute the estate to the beneficiaries in accordance with the will or rules of intestacy.
As you can see… there is a lot of work to be done by executor/s or administrator/s and many areas where people may disagree.
The forfeiture rule for cases involving killing the will maker.
The forfeiture rules applies in all states of Australia however each State has it’s own slight variations. The reason this subject is included in this section relating to will disputes is because the rules sometimes allow for the discretion of the court in certain cases and also there is sometimes an element or allegation of the mental illness of the killer which may affect a court’s decision as to whether or not to apply the rule.
Following a killing, the rule disentitles the killer from any benefit he/she would normally have received from the death of the person killed. A death may be at the hand of the offender or by car accident or other unfortunate circumstance and for that reason there is sometimes a dispute that requires a court action to determine whether or not the rule should be applied.
Some of the cases a court might be asked to consider include those involving joint tenancies where under normal circumstances the property by law automatically transfers to the surviving joint tenant, except for the forfeiture rule. The mental illness of the killer may be a factor to take into consideration bearing in mind the basic fundamental at law that a person must have the required mental capacity to be said to have committed a criminal offence. Also the unforeseen consequences that might follow for the family members of the killer if the rule is applied.
Revocation of probate: executor negligence, fraud or conflict of interest.
If there is sufficient evidence to remove an executor or administrator from that role the court will revoke the grant of probate or the grant of administration and appoint another administrator.
Only a person having a beneficial interest in the estate can make an application for a revocation of a grant. There is no time limit and an application can be made at an early stage. In fact an application can even be made before the grant is made. However, whenever the application is made, the evidence against the executor or administrator must be precise and strong.
Allegations of negligence and/or fraud will be a matter of factual evidence and should be relatively simple to determine because there is no court discretion involved, just facts. In other words there will be negligence or fraud or not. However when it comes to an allegation of conflict of interest the allegations may be harder to prove.
As usual the loser pays the legal costs in court proceedings unless the judge thinks otherwise.
Statutory wills (court made wills) for mentally incapacitated will makers.
In the law of Wills only an individual can make a will and not someone for him/her. In addition the individual will maker must possess the required mental capacity including being over the age of 18 years however there are exceptions to this rule. The will maker must understand the nature and effect of what he/she is doing.
Sometimes individuals under the age of 18 years or being mentally incapacitated need a will. In these circumstances a family member or a friend or other representative is able to make an application to the court requesting the court to make the will. These wills are referred to as ‘statutory wills’ or ‘court ordered wills’ and are usually eventually signed on behalf of the incapacitated person by the Supreme Court Registrar.
In such cases the court requires evidence sufficient for the judge to structure a will the way the judge believes the incapacitated person would want and which would be proper in all the circumstances.
A classic case where a court ordered will might be required is when an old person's will is no longer of any relevance because all the beneficiaries named are no longer alive and the will maker, with say dementia, has no capacity to make a will herself.
The reason disputes arise is probably obvious. There may be many family members who believe they should be included in the will or carers of the will maker's or any other reason. The legal costs of these applications to the court will be paid from the living estate of the will maker so long as the court is makes the order sought.
Power of attorney disputes.
Most power of attorney disputes come about when the attorney holding the power of attorney allegedly has not spend the principals funds in accordance with the law. The other frequent problem for attorneys is they frequently do not have proper records to show good faith and proper spending.
Over many years past persons holding a power of attorney for a family member have been under the impression they could spend the principals money on themselves especially if that was documented in the original document when the attorney was appointed. However under all circumstances the attorney holds the principals funds as trustee for the principal and must spend the money for the benefit of the principal.
The reason these disputes come under the heading ‘will disputes’ is because often the problem is not known until the death of the principal. After the death of a mother or father, for example, family members expect to see a certain amount of money in the estate only to find out there is none or not much left. Over several years the attorney has allegedly spend all or most the money possibly on himself/herself.
What most people do not know is that if warranted an application to the Supreme Court can be made before the death of the principal seeking an order for the attorney’s accounts to be produced and inspected and he/she been subjected to a cross examination of the document/spending. The power of attorney could be revoked and the attorney ordered to repay any improper spending. The same process can also be followed after the principals death.
The rule of ‘ademption’ and exceptions to the rule.
The word ‘ademption’ is a legal word meaning ‘taking away’.
Ademption can occurs when an item gifted in a will is no longer available to the intended beneficiary when the will maker dies. For example the will maker may have sold his/her house or car (gifted in the will) before his/her death leaving no gift to the named beneficiary. In other words the will maker no longer owns the item and the gift is then must fail.
However, whilst the ademption rule may be fair in most cases (if intended by the will maker) it can lead to allegations of unfair play and disputes over unintended outcomes. Each Australian State has slightly different rules in relation to the exclusion to the ademption rule. One common law rule that NSW, Victoria and Queensland share is that if the will maker’s property was transferred out of the will maker’s ownership by foul means, in that event the gift will not fail and court orders may be sought to protect the intended beneficiaries rights.
In NSW and Victoria the law provides for an exception to the rule in circumstances where the will maker's State appointed substitute transfers property out of the will maker's name and not approved by the will maker.
Give me a call anytime. I will personally answer the phone. I'm happy to discuss with you the three (3) most common mistakes made by will dispute contestants that can lead to long delays, huge legal cost and an unhappy end. No cost, no obligation. Choose me to represent you or not, at least you will have the knowledge to start on the right track.
Eric: 0488 199 189