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Wills and Succession By Zohra Arbabzada

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Table of Contents Nature of a will ............................................................................................................................ 8

Characteristics of a will ....................................................................................................................... 8

Codicils ................................................................................................................................................ 8

Testamentary and inter vivo transactions .......................................................................................... 8

Moneys deposited into a joint account .............................................................................................. 9

Voluntary settlements postponing possession or vesting .................................................................. 9

Nominations ........................................................................................................................................ 9

Donatio mortis causa .......................................................................................................................... 9

The rule in Strong v Bird 1874 ........................................................................................................... 10

Conditional wills ................................................................................................................................ 10

Joint wills ........................................................................................................................................... 10

Mutual wills ....................................................................................................................................... 10

Testamentary contracts .................................................................................................................... 12

Contracts to leave certain property by will ...................................................................................... 12

Contracts to make a will ................................................................................................................... 12

Contracts not to revoke a will ........................................................................................................... 13

Estoppel ............................................................................................................................................ 13

Delegation ......................................................................................................................................... 14

Formal requirements ................................................................................................................. 16

Purpose of formalities ....................................................................................................................... 16

Wills made outside of NSW .............................................................................................................. 16

Presumption of due execution – Omnia praesumuntur rite esse acta ............................................. 16

Writing .............................................................................................................................................. 17

Signature ........................................................................................................................................... 17

Signing by testator ........................................................................................................................ 17

Signature affixation ....................................................................................................................... 17

Several sheets of paper ................................................................................................................. 18

Signature on separate document ................................................................................................. 18

Attestation ........................................................................................................................................ 18

The witness-beneficiary rule ............................................................................................................. 19

Incorporation ................................................................................................................................ 20

Secret trusts .................................................................................................................................. 20

The dispensing power ................................................................................................................... 21

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Capacity ..................................................................................................................................... 23

Minors ............................................................................................................................................... 23

Testamentary capacity ...................................................................................................................... 23

Soundness of mind, memory and understanding ............................................................................. 24

Definition of delusion .................................................................................................................... 25

Statutory wills for persons lacking capacity ...................................................................................... 26

Knowledge and approval of the contents of the will ........................................................................ 28

Undue influence ................................................................................................................................ 29

Fraud ................................................................................................................................................. 30

Proof .................................................................................................................................................. 30

Intention – animus testandi .............................................................................................................. 31

Mistake and rectification .................................................................................................................. 31

Revocation, republication and revival ......................................................................................... 33

General .............................................................................................................................................. 33

Revocation by testamentary instrument .......................................................................................... 33

Express revocation ............................................................................................................................ 34

Implied Revocation ........................................................................................................................... 34

Revocation by codicil ........................................................................................................................ 35

Burning, tearing and destruction ...................................................................................................... 35

Writing upon and dealing with the will ............................................................................................ 35

Lost wills ............................................................................................................................................ 36

Involuntary revocation ...................................................................................................................... 37

Revocation by marriage ................................................................................................................ 37

Revocation by termination of marriage ........................................................................................ 38

Conditional and mistaken revocation ............................................................................................... 38

Mistaken revocation ..................................................................................................................... 38

Conditional revocation .................................................................................................................. 39

Dependant relative revocation ......................................................................................................... 39

Re: Mills ......................................................................................................................................... 39

Republication .................................................................................................................................... 39

Revival ............................................................................................................................................... 41

Obliterations, interlineations and alterations ............................................................................. 42

General .............................................................................................................................................. 42

Presumption as to when an alteration is made ................................................................................ 42

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Meaning of apparent ........................................................................................................................ 42

Revocation by obliteration ................................................................................................................ 43

Will drafting – meaning of common terms ....................................................................................... 43

Give, devise and bequeath ............................................................................................................ 43

Land ............................................................................................................................................... 43

Die without issue .......................................................................................................................... 44

Trusts ............................................................................................................................................. 44

Deposits and access to wills .............................................................................................................. 44

Family provision ........................................................................................................................ 46

Relationship with testamentary freedom ......................................................................................... 46

Eligible person ................................................................................................................................... 47

De Facto Relationship ................................................................................................................... 47

Domestic relationship ................................................................................................................... 48

Living with ..................................................................................................................................... 49

Child .............................................................................................................................................. 49

Former spouse .............................................................................................................................. 49

Persons dependant ....................................................................................................................... 50

Elderly parent ................................................................................................................................ 50

Exercise of discretion ........................................................................................................................ 50

Maintenance education or advancement in life ............................................................................... 52

Claims by spouses ......................................................................................................................... 54

Claims by children ......................................................................................................................... 55

Benefits  received  in  the  deceased’s  lifetime .................................................................................... 58

Disentitling conduct .......................................................................................................................... 58

Duty of the Executor ......................................................................................................................... 59

Notional estate ................................................................................................................................. 59

Effect of an order for provision ......................................................................................................... 62

Compromise and release of the right to apply for provision ............................................................ 62

Time limitations ................................................................................................................................ 64

Evidence ............................................................................................................................................ 64

Costs .................................................................................................................................................. 64

Mediation .......................................................................................................................................... 65

Death ........................................................................................................................................ 66

Formalities ........................................................................................................................................ 66

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Presumptions .................................................................................................................................... 66

Definition of death ........................................................................................................................ 66

Order of death and survivorship ....................................................................................................... 68

Relationship of section 35 of the Conveyancing Act and the presumption of death ....................... 68

Survivorship ...................................................................................................................................... 68

Definition of survivorship .............................................................................................................. 69

Ownership in regards to the disposal of the body ............................................................................ 69

Organ donation ................................................................................................................................. 69

Burials ....................................................................................................................................... 72

Burials where there is an executor ................................................................................................... 72

Burials where there is no executor ................................................................................................... 72

Intestacy .................................................................................................................................... 75

General .............................................................................................................................................. 75

Definition of intestacy ................................................................................................................... 75

Definition of intestate ................................................................................................................... 75

Entitlement to the whole of the estate ........................................................................................ 75

Testamentary freedom versus forced inheritance ........................................................................... 75

Forfeiture rule ................................................................................................................................... 75

Types of Spouses ....................................................................................................................... 76

Definition of a spouse ....................................................................................................................... 76

Marriage and married spouse ........................................................................................................... 76

Definition of marriage ................................................................................................................... 76

Definition of a domestic partnership ............................................................................................ 76

Domestic partnership – registered spouse ....................................................................................... 76

Eligibility for registration ............................................................................................................... 76

Restrictions on registration ........................................................................................................... 77

Cooling off period ......................................................................................................................... 77

Revocation of registration by events ............................................................................................ 77

Domestic partnership – de facto spouse .......................................................................................... 77

Definition of de facto relationship ................................................................................................ 77

Ending a de facto relationship ...................................................................................................... 77

Determining a de facto relationship ............................................................................................. 78

Spouse’s  right  to  acquire  property ................................................................................................... 78

Multiple spouses ........................................................................................................................ 79

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Spouses entitlement where there are more than one spouse but no issue .................................... 79

Spouses’  entitlement  where  issue  are  also  issue  of  one  or  more  of  the  spouses ............................ 79

Spouses’  entitlement  where  any  issue  are  not  issue  of  a  surviving  spouse ..................................... 79

Sharing between spouses ............................................................................................................. 79

Distribution orders ........................................................................................................................ 79

Issue .......................................................................................................................................... 80

Historical background ....................................................................................................................... 80

Types of children ........................................................................................................................... 80

Different intestacy situations ..................................................................................................... 82

One spouse and no children ............................................................................................................. 82

Two or more spouse and no children/two or more spouse and children where all the issue are the issue of the spouse ........................................................................................................................... 82

Distribution orders ........................................................................................................................ 82

Issue that is not the issue of the spouse ........................................................................................... 82

Spousal entitlement ...................................................................................................................... 83

Personal effects ............................................................................................................................. 83

Statutory legacy ............................................................................................................................ 84

The statutory legacy for a spouse consists of: ...................................................................... 84

Issue and no spouse .......................................................................................................................... 84

Presumptive shares ....................................................................................................................... 84

No issue and no spouse .................................................................................................................... 85

No issue, no spouse and no parents ................................................................................................. 85

No issue, no spouse, no parents and no siblings or issue of any deceased brothers or sisters ....... 85

No issue, no spouse, no parents, no siblings or issue of any deceased siblings and no grandparents .......................................................................................................................................................... 85

Bona vacantia .................................................................................................................................... 86

Role of the executor ................................................................................................................... 87

Notify the beneficiaries ..................................................................................................................... 87

Look after the estate ......................................................................................................................... 87

Value the estate ................................................................................................................................ 87

Obtain authority to administer the estate ........................................................................................ 87

Complete income tax returns ........................................................................................................... 87

Pay all debts ...................................................................................................................................... 87

Divide the estate ............................................................................................................................... 88

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Establish trusts .................................................................................................................................. 88

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Nature of a will

Characteristics of a will

A will extends to a codicil and any other testamentary disposition (s 3, Succession Act 2006).

Originally a will dealt with realty and a testament with personalty

A codicil was a will with no executors but now refers to an addition or amendment to a will

A valid will must:

o Comply with the formalities as to writing, execution and attestation o Be made by a person with testamentary capacity, who knows and approves of the

contents of the will o Deal with property or appoint executors in order to be admitted to probate o Not have been revoked (A will is always able to be revoked, notwithstanding it is

expressed to be irrevocable; Vyniors Case (1609) or that the testator has contracted not to revoke the will)

o A  will  is  ambulatory  in  nature.  This  means  that  it  takes  no  effect  until  the  testator’s  death. This means the testator is free to deal with his or her property during their lifetime notwithstanding it forms a gift under their will. Further, the death of a beneficiary before the testator means the beneficiary receives nothing

o A will is unitary in nature. This means that a will is the aggregate of all unrevoked testamentary writings (Douglas-Menzies v Umphelby)

o Thus, a later will does not of itself revoke an earlier will, unless it expressly does so through a revocation clause; or impliedly does so where there later will is inconsistent with the terms of the earlier will

Codicils

A codicil is an amendment or an addition to a will which must comply with the formalities of a will (unless dispensed with).

A codicil is read with the will as both documents constitute one will. But, a codicil is construed so as to interfere with as little as possible with the will (Cookson v Hancock 1836)

Testamentary and inter vivo transactions A testamentary disposition takes effect on the death of the testator and to be valid must comply

with the formalities prescribed by the Succession Act.

An inter vivo disposition takes effect from the time which it is made or depends upon some event  other  than  the  donor’s  death  for  it  to  take  effect.  It  does  not  require  compliance  with  the  Succession Act.

Just because property passes on death, does not mean that it is testamentary. A testamentary disposition is one where there is a voluntary transmission on death of property which up to the time of death belonged absolutely and indefeasibly to the deceased (Russel v Scott 1936).

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There is a rebuttable presumption that a document which appears testamentary on its face is testamentary:

o This presumption can be rebutted by showing that the maker of the document did not intend the document to operate at his or her will.

o A document that does not appear from its face to be testamentary may be admitted to probate if it can be shown that in addition to complying with the formalities for a will, the document was intended to be testamentary (Kings Proctor v Daines 1830).

Moneys deposited into a joint account

This confers an interest immediately and does not require death to consummate the gift (Russell v Scott 1936)

Voluntary settlements postponing possession or vesting

These  take  effect  immediately  but  merely  postpone  possession  or  vesting  until  after  the  settlor’s  death (e.g. to A for my life thereafter to B)

Nominations

Nominations are either categorised as a contract to create an inter vivos trust of future property (McFadden v Public Trustee 1981), or are a contract to pay money on the happening of a future event (Baird v Baird 1990) (e.g. the policyholder, under a life insurance or superannuation policy, nominates  a  person  to  benefit  upon  the  policyholder’s  death).  In  such  an  instance,  the  policyholder has the right to have the scheme properly administered, and this right comes into existence when the contract is made.

In the case of a statutory superannuation scheme, then the nomination creates a statutory

obligation as to the payment of benefits which is not testamentary (Superannuation Industry (Supervision) Act 1993).

Donatio mortis causa

This gift is hybrid as it depends on death to operate, but it is not testamentary. There are three elements for donatio mortis causa to be found:

o Contemplation of death o The gift is conditional on death o Delivery of the gift with the intent to part with dominion over the gift

The donee receives an absolute and complete title only on the condition of death occurring

Once the gift takes effect by death, then this is retrospective to the date of the gift, and the gift

therefore does not pass to the estate

As the gift is conditional on death, the donor can recover and revoke the gift

Delivery can be of documents which are the indicia of title such as a share certificate (Public Trustee v Bussell 1993):

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o But, there is doubt as to whether there can be a valid Donatio over Torrens title land (Bayliss v Public Trustee 1988; Sen v Headley 1991).

o In Tawil v Public Trustee of NSW 1998, it was held that although the doctrine applied to bank passbooks as indicia of title, a bank statement was not indicia of title. However, Hodgson CJ opined that the handing over of car keys was sufficient to create a donation.

The rule in Strong v Bird 1874

The elements of this rule were stated in Cope v Keen 1968 by Kitto J. The elements were that: o The testator makes a purported, immediate gift of specific property o The testator intended this to be an immediate gift but it fails for want of compliance

with legal requisites o The testator at the time of death still intended the gift be treated as effectively given to

the intended donee o The testator leaves a will appointing the intended donee as executor

If the above is satisfied equity will perfect the gift. This is on the basis that: o The executor could have sued the testator for the gift. o The executor cannot sue himself or herself. o The executor has no choice over his or her appointment and should not be required to

renounce probate in order to sue for the gift.

The property the subject of the purported gift still forms part of the estate but passes to the executor. It is therefore available under family provision legislation and to creditors of the estate (Blackett v Darcy 2005)

The rule applies to realty as well as personalty; (Benjamin v Leicher 1998)

In Blackett v Darcy 2005 Young CJ criticized the rule and declined to extend it further. Thus the rule is limited to cases where the donee executor receives the beneficial interest in the gift and does not apply where the gift is of a bare legal interest.

Conditional wills

This is where the whole will is conditional upon the happening of a specified event. It is a question of construction whether the will is in fact conditional upon that event as opposed to the event being a mere reason for making the will (In the Goods of Spratt 1897)

If the condition is not fulfilled then the will is inoperative including any revocation clause (in the Goods of Hugo 1877)

Joint wills

The one document contains the will of two or more persons. Each time one dies the document is admitted to probate in respect of that person.

Mutual wills

Two persons (usually spouses) make wills in substantially identical terms.

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There is a legally binding obligation between those persons that that neither party will revoke their will without the consent or at least notice to the other.

A legally binding obligation is essential (Osborne v Estate of Osborne 2001). The mere fact that the two wills are identical is not enough (Birmingham v Renfrew 1937 per Latham CJ; Baird v Smee; Hussey v Bauer).

It is not essential that every term of the mutual agreement be proved. It is enough if there is sufficient evidence of so much of an agreement that supports a legally binding obligation so as to lay the foundation for the imposition of an equitable obligation (Walters v Olins 2008).

If the agreement relates solely to the testamentary disposition of land then the agreement must be evidenced in writing (s 54A Conveyancing Act 1919; Horton v Jones 1935). But if the agreement is a promise to leave whatever property the testator may die possessed, whether it be land or personalty (as opposed to a specific interest in land), then writing is not required (Birmingham v Renfrew)

A breach of the agreement by one party during the lifetime of the other by revocation of their will leads to an action for damages.

A breach of the agreement by one party by revocation of their will after the death of the other party gives rise to equitable relief by way of a constructive trust in favour of the party who was to benefit under the mutual will (Dufour v Pereira 1769). This operates as a floating obligation of the assets of the survivor which crystallises into a trust upon the assets of the survivor on the death of that person (Barns v Barns 2003; Walters v Olins 2008), at where a declaration in support of a mutual wills agreement was made during the lifetime of the surviving party to the agreement

Although a will is always revocable, equity will intervene in the case of mutual wills as the act  of  one  party  in  revoking  his  or  her  will  without  notice  to  the  other,  or  after  the  other’s  death, constitutes fraud (Birmingham v Renfrew, per Dixon J).

In many cases the court will have to infer that the parties intended to enter into legally binding relations. However, there must be clear and satisfactory evidence of the agreement (Walters v Olins 2008). The court will act cautiously in this regard (Fry v Densham-Smith 2010). It will be relevant to consider the factors mentioned in Albrow v Cunningham 2000: o To how many people the statement was made o Whether there is a statement in writing o The consideration offered for the promise o The number of times the statement was made o The language used by the parties o The context in which the promise was made o The nature of the relationships between the parties o The certainty of the terms

Disposal of property by the survivor of a mutual will agreement that is the subject of the

agreement may constitute a breach of that agreement that could be restrained by injunction in the lifetime of the survivor (Walters v Olins 2008). However, not all promises that support mutual wills contain promises that the survivor will not dispose of the estate as often the

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intention of the parties is that survivor should be able to enjoy the property in his or her lifetime (Birmingham v Renfrew 1937 per Dixon J).

An inter vivos transaction, even one that is intended to defeat the promise will not be a breach of the mutual will agreement unless the transaction is in substance a testamentary transaction (Palmer v Bank of NSW 1975 per Barwick CJ; Barns v Barns 2003; Maria Vittoria Fazari v Cosentino 2010)

It has been held that to transfer a property inter vivos, but continue to live in it and pay the rates and charges, if done with intent to defeat the agreement is sufficient to constitute a breach of a mutual will agreement (Bauer v Hussey 2010)

Property that is the subject of a mutual will is still available for the making of an order under family provision legislation as this property still forms part of the testator's estate at death (Barns v Barns 2003). In NSW, the concept of notional estate would have defeated a mutual will before this decision.

Testamentary contracts

These contracts are subject to the requirement of writing if they deal solely with an interest in land (see above) and are otherwise subject to the law of contract. Prior to 2003 the Privy Council in (Schaefer v Schumann 1972) had held that these contracts stood outside of the estate and as such were to be regarded in the same way as debts, that is, they were not subject to an order under the Family Provision Act except by of being notional estate. The High Court in Barns v Barns 2003 has held that the benefit due under such contracts is part of the estate on death and is available for an order under the Act.

Contracts to leave certain property by will

If the testator disposes of the property in his lifetime then there is a breach of contract giving rise to damages if the intended beneficiary is aware of the breach. The damages will be less than the value of the property by reason of acceleration of the benefit and may now have to be discounted to allow for the potential of a Family Provision Act claim on death that would reduce the estate (Barns v Barns 2003)

Equitable relief may be available against a third party in receipt of that property provided they are not a bona fide purchaser for value without notice (Synge v Synge 1894)

Contracts to make a will

Distinguish between a contract to leave a specific gift and a contract to leave the whole or a specified  share  or  legacy  of  the  testator’s  property

In the former case, the intended beneficiary can claim as a creditor in the estate if there is insufficient assets to meet the gift, or the testator has otherwise disposed of the gift (Schaefer v Schumann 1972)

In the latter case the intended beneficiary is at the risk that the testator will dissipate the estate during his or her lifetime or the estate will be insolvent, as the promise is to leave the estate  such  as  it  is  at  the  testator’s  death  (Palmer v Bank of NSW 1975)

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However the testator cannot enter into other testamentary transactions or transactions to the same effect, which defeats the promise, as the promise is that the only testamentary transaction is a will in favour of the promise (Palmer v Bank of NSW 1975 per Barwick CJ)

o The testator and the intended beneficiary can always covenant that the testator will not

dispose of all or some of his or her property inter vivos.

Contracts not to revoke a will

o A testator is always free to revoke their will but may commit a breach of contract if revocation occurs, thus leading to damages and possible equitable remedies (Synge v Synge 1894):

o A contract not to revoke is not breached if revocation occurs by operation of law,

e.g. marriage (s 12, Succession Act; Lloyds Bank Ltd v Marsland 1939) o However, if the promise can be construed as a promise to leave property by will in

any event then revocation by operation of law will constitute a breach of contract (Robinson v Ommanney 1883)

Estoppel

Even in the absence of a contract a testator may be estopped from leaving some or all of the estate by will to a third party contrary to a representation made to the intended beneficiary. In such case equity could impose a constructive trust over the estate in the hands of the third party.

In order to establish the estoppel it would need to be shown that in view of the detriment sustained if the promise to leave property was not made good would give rise to an unconscionable result in circumstances where the promise was made, intended to be relied upon and was relied upon (Gillett v Holt 2001)

In Gillett v Holt 2001, an express promise made by a person to leave their property upon death to another may give rise to an estoppel if the person in their lifetime changes their mind an indicates that they will dispose of the property contrary to the original representation if that change of mind would in the circumstances be unconscionable.

A representation to leave property upon death need not be constituted by a precise and clear statement but can arise from oblique statements and conduct so long as it was reasonable for the representee to rely upon those statements and conduct and there was in fact reliance. Whether or not it was reasonable to so rely will be judged on an objective basis. Once this occurs then a proprietary estoppel is establish. It does not matter that the representor did not intend the statement to be relied upon or did foresee the particular act of reliance (Thorner v Major 2009)

Whilst there must be certainty as to the property that is the subject of a proprietary estoppel it is not necessary that the property remain fixed over time, it is enough that the property is identifiable albeit that it may be subject to change over time (Thorner v Major 2009)

The Court of Appeal in New South Wales has recognised the possibility of proprietary estoppels being established against a testator. However there must be evidence of

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representations by the testator and not by a third party such as a deceased parent who was a prior owner of the property (Hampson v Hampson 2010).

Delegation

Please note that the below provisions no longer apply to the will of a person who dies after Succession Act 2006 commenced on 1 March 2008. S 44 of the Act provides that:

o A power or trust to dispose of property, created by a will, is not void on the ground that  it  is  a  delegation  of  the  testator’s  power  to make a will, if the same power or trust would be valid if made by the testator by instrument during his or her lifetime (s 44 Succession Act). Thus, a power or trust that would be valid inter vivos is now valid if created by a Will

If the testator died before 1 March 2008, then as a general rule, the testator could not delegate to another his or her testamentary powers. This is known as the non-delegation rule.

o There is an exception to the rule with respect to charitable gifts (Chichester Diocesan Fund v Simpson 1944). In the case of non-charitable gifts, there is an exception where there is a gift of power of appointment in the will.

o A power of appointment must be distinguished from a trust. In the case of a trust, the trustee holds property on trust to divide it among a certain class of persons. Thus, the trustee is compelled to carry out the trust

o A power of appointment merely gives the holder of the power the right to select possible beneficiaries, either with or without limitation. The holder cannot be compelled to exercise the power, and it not exercised, the beneficiary gets nothing.

o There are three types of powers of appointment:

� General

A general power allows the holder to appoint anyone including him

or herself

A general power is valid as it amounts to complete ownership of the testator’s  property  by  the  person  holding  the  power  (Tatham v Huxtable 1950). It is permissible to give the power to the trustees of a valid pre-existing trust, where those trustee have power to distribute to the world at large (Gregory v Hudson 1998)

� Special

A special power only allows appointment from a limited class of

persons

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Formal requirements

Purpose of formalities

Section 6, Succession Act prescribes the main formalities:

o Writing o Execution o Attestation

The purpose of the formalities is the prevention and discouragement of fraud and undue

influence. Also, the formalities emphasis the solemnity of the will making process, thereby encouraging people to give due consideration to what happens to their property after death

Wills made outside of NSW

Part 2.4 Succession Act applies in this matter. This part replaces Part 1A of the Wills & Probate Administration Act, and was inserted by the Wills & Probate Administration (Amendment) Act 1977, and applies to testators dying after 1 January 1978

Pursuant to s 48 Succession Act, a will made outside of NSW is valid if:

o The will conforms to the law of the territory where it was executed. Territory includes another country and also another state or territory of the Commonwealth; OR

o The will conforms with the law of the territory where the testator was domiciled or habitually resided at the time of execution or death; OR

o The will conforms to the law of the country of which the testator was a citizen at the time of execution or death

These provisions remove the old common law rules relating to movable and immovable property.

Presumption of due execution – Omnia praesumuntur rite esse acta

If a will is regular on its face, and apparently duly executed, then there is a rebuttable presumption that the formal requirements have been compiled with (Re: Unsworth; McLeod v Burchall 1972 per Bray CJ)

The presumption is not a presumption in its own right, as it applies only where the evidence of execution fails

The presumption applies where there is no proof one way or the other of due execution (Re: Bladen 1952; In the Will of Kimbell 1969)

The presumption can apply where the witnesses are unavailable, are mistaken or even where both deny execution (Re: Bladen); so long as the court cannot decide the question of due execution one way or the other (In the Will of Kimbell 1969; Sullivan v Mouglalis 2008; The Estate of Irene Elizabeth Dampf 2010)

If the will is irregular on its face, then there is less force to the presumption (Re: Unsworth; In the Estate of Stewart Arthur Handfield 2010)