Informal Wills: Did a message contained in a Word document constitute a valid will?

Mr D was a successful restaurateur. He owned properties in Paddington, Queens Park and Surry Hills. Mr D was one of eight children. He and two of his brothers owned a chain of acclaimed restaurants. The brothers shared a superannuation fund and some joint bank accounts. Their partnership was worth $3.2 million when Mr D sadly took his own life in 2010. No will could be found.  

It was discovered that on his laptop computer there was a document entitled “Will.doc”. Mr D’s parents and his brothers went to Court over whether “Will.doc” was a legal will. In some circumstances a Court can declare a document to be a valid will even though it does not meet the requirements of one. In Mr D’s case the Judge decided that “Will.doc” did express his “testamentary intentions”.   

The Judge considered comments Mr D had made to co-workers and family members about “Will.doc”.  

A technical examination of the laptop indicated that no one other than Mr D had accessed the document. The Judge ruled that “Will.doc” was valid even though it was not signed or even printed out.  

So why bother with a will? Well the problem with informal wills is the potential they create for uncertainty, delays, bitter disputes, legal costs and the time and effort to which the potential beneficiaries must go to try to get justice. Informal wills are much easier to challenge and the cost of court proceedings will often fall back onto your loved ones. If you have any questions about the validity of your will, call Fox & Staniland today.

Statutory Wills: Estate Planning for Persons with a Disability

Many people lose the ability to make or change their wills due to physical or mental disability. As a result, their assets can end up in the hands of people that they were not in-tended for, such as an estranged relative or the government.

If you have a legitimate interest in the affairs of an incapacitated person, you can apply for a “Statutory Will,” which is a will that is made, altered or revoked by the NSW Supreme Court.  

On such an application, the Court will ask the question: “If the incapacitated person had the ability to make or change the will themselves, what would that will be?”

In one case, the brother-in-law of a 93 year old woman successfully applied for a Statutory Will making him the executor and beneficiary of her estate. The woman’s original will left her assets to her sisters who predeceased her. Unfortunately by this time, the woman was suffering from dementia that prevented her from changing her will. Based on evidence of their close family relationship, the Court decided that she would have preferred her estate go to her brother-in-law rather than to the government and made orders for a statutory will.  

Statutory Wills can also be made for people who have never had the ability to make their own wills. For example, an application was brought on behalf of an 11 year old boy who suffered from Shaken Baby Syndrome, which left him with severe brain damage. He was awarded $50,000 in victim’s compensation and placed in the care of DoCS. To prevent this money from going to the boy’s parents, the Court granted a Statutory Will naming his sister as the beneficiary.

If you require advice on Statutory Wills, contact us for advice.   

“Living Wills”
6 Things to Know about Advance Care Directives

Estate planning is not just about what happens to your assets after you pass away. For many people, it is just as important to make arrangements about their medical treatment. 

An ‘advance care directive’ (sometimes known as a ‘living will’) is a document containing instructions about end of life care, including consent or refusal of specific medical treatments.  

In one case, the Supreme Court upheld the advanced care directive of a man who refused blood transfusion and dialysis treatment due to his beliefs as a Jehovah’s Witness. The Court honoured his wishes, even though the lack of treatment would lead to the worsening of his condition.  

The case told us six important things to remember about advance care directives:

1. The advance care directive only comes into play when you lose the capacity to make decisions about your medical treatment;
2. An advance care directive can only be made by a capable adult, acting freely and voluntarily;
3. To be upheld, the advance care directive must be clear and unambiguous about the medical treatment and apply to the clinical circumstances at hand. If the document is unclear, decisions will likely revert back to medical professionals or your enduring guardian;
4. Decisions to refuse medical treatment do not have to be considered reasonable. Provided the document is clear, the court will respect the wishes of the person, regardless of whether they are based on moral or religious grounds;
5. You may choose to prepare an advance care directive in an enduring guardianship appointment document; and
6. Advance care directives are not absolute. If the professionals are not sure if the advance care directive applies, or if treatment is necessary to save the life of a viable unborn child, the ‘emergency principle’ may apply, allowing the doctor to treat the patient in accordance with his or her clinical judgement.

Informal Wills: Lessons from Pahlow-Silady v Siladi [1997] NSWSC 153
 

This case explores whether an informal document entitled “Statutory Declaration” was intended to constitute the will of the deceased. Although the document was eventually found to reflect the testamentary intentions of the deceased (therefore constituting his will), the case highlights many of the risks and ambiguities associated with making an informal will.

The facts:

• Stephen Silady (the deceased) signed a document entitled "Statutory Declaration" on April 4 1983, drafted by his wife Pauline on her own initiative.
• Stephen and his brothers John and Anthony each held equal one-third interests a company run by the family. The rules of the company, found in its "Articles of Association" set out this division of shares between the three brothers.
• Stephen had created a will in July 1964 which essentially passed his share in the company to his brother John. However, this will was revoked in 1967 when Stephen married Pauline.
• In the “Statutory Declaration” Stephen assigned his one-third share of the company to John in the event of his death or disability. The document was essentially executed in order to exclude Anthony from inheriting Stephen’s share in the company.
• In 1985 Stephen remarked to a friend, Mr Dominic that:
  “I have fixed things up so that if anything happens to me then the business goes to my brother John”
• Stephen died on 4 August 1991.
• A dispute then arose between Pauline and John. Pauline applied to the Supreme Court for a declaration that Stephen had died intestate (without a will) and for letters of administration of Stephen’s estate to be granted to her as his wife.
• Stephen’s brother John sought that the "Statutory Declaration" be recognised as the legal will.

Case history:

First Instance 1994

At first instance, the Court found that the “Statutory Declaration” signed by Stephen Silady was indeed his will under s18A of the Wills, Probate and Administration Act 1898 in that it reflected his wishes (his “testamentary intentions”).

The Court also rejected the argument that the rules of the company suggested that Stephen was prohibited from transferring his share of the company to John.

Appeal 1997

An appeal by Pauline Silady was allowed and the matter was remitted back to the lower court. Here, the majority found that the the initial decision was wrong to reject evidence suggesting that the rules of the company prohibited the transfer of one-third shares between the brothers.

The Court also found that the “Statutory Declaration” did not express Stephen’s testamentary intentions as it followed some informal discussion relating to family tension, and more importantly, was drafted exclusively by Pauline with little or no input from Stephen himself. The document was therefore seen as a casual, “spur of the moment” decision which relied on Pauline’s limited understanding of her husband’s business affairs.

Re-hearing 1999

However, a re-hearing in 1999 essentially resulted in the same result as the first decision in 1994.

The Court concluded that the “Statutory Declaration” did in fact constitute Stephen’s testamentary intentions (and therefore, his will under s 18A) based on the surrounding circumstances and the conversation with Mr Dominic.
In relation to the rules contained in the company’s Articles of Association, the Court was not convinced that Stephen was necessarily bound by it, or even aware of the rule.

What you need to know:

This case says nothing new about the interpretation of the law, but it does illustrate how improper estate planning can result in lengthy and extremely expensive litigation battles.

Although s18A(1) of the Wills, Probate and Administration Act 1989 makes some provision for informal wills, compliance with the formal requirements of a will under the Act could have eliminated many of the ambiguities faced by the parties in this case. As seen in this case, the viability of an informal will is essentially at the mercy of the circumstances surrounding it, as the Court “may have regard (in addition to the document) to any other evidence relating to the manner of execution or testamentary intentions of the deceased person, including evidence (whether admissible before the commencement of this section or otherwise) of statements made by the deceased person." (s18A(2)).

Particularly if you own shares in a private company, it is essential that you see a lawyer in order to formulate a proper succession plan for your business.