WILLS AND ESTATES
A will is a legal document by which a person (the testator/testatrix) disposes of his/her estate upon death. Having a clear, legally valid and up-to-date will is the best way to ensure that one’s estate is distributed according to their wishes. Under section 6(1) of the Succession Act 2006 (NSW) (‘the Act’) there are certain statutory requirements that must be met for a will to be valid and enforceable. Section 6(1) of the Act requires:
- The will be in writing (whether handwritten, typed or printed)
- Every page is signed by the testator, and
- The testator’s signature is witnessed by two other people who also must sign the will.
Further, under s 6(2) the signature of the testator or other person signing in the presence and at the direction of the testator must be made with the intention of executing the will.
Who can be a Witness?
There are a few qualifications regarding who can act as a witness to a will. A will cannot be witnessed by a person who is unable to see, and a person who witnesses the execution of the will should not be a person who benefits from the will. According to s 10 of the Act any gift to a beneficiary is void where that beneficiary witnessed the testator executing the will. However, there are exceptions where:
- There are two other people witnessing the will who do not benefit from the will;
- All persons who benefit directly from the avoidance of the disposition consent in writing to the distribution of the disposition under the will and have the capacity to give that consent; or
- The Court is satisfied that the testator knew and approved of the disposition and it was given or made freely and voluntarily by the testator.
What is a testamentary trust?
A testamentary trust is used where a testator divides the legal and equitable title of their estate by giving the legal title to a trustee (usually the executor) to hold on trust for the beneficiary. The beneficiary holds the equitable title, and receives the legal title upon the occurrence of a certain event. Testamentary trusts are often used where the testator gives a gift to a minor or a disabled beneficiary; or in situations where the testator wants to withhold the gift upon the occurrence of a certain event. An example of a testamentary trust is: “I give $10,000 to my Trustee to hold on trust for my daughter Chloe upon her attaining the age of 25 years.”
What is an executor?
An executor is the person appointed by the will to administer the estate. Their role involves making sure the debts are paid from the estate and the assets and possessions are distributed according to the deceased’s wishes. Usually, people name just one or two executors in their will, but technically they can name as many executors as they wish. To ensure the process runs smoothly some people choose to name a solicitor as an executor. The Solicitor usually charges a fee for their expertise in administering the estate.
Who can challenge a will?
Pursuant to Section 57(1) of the Act a person wishing to challenge a will must be deemed an ‘eligible person’ by the Court to apply for an Order that provision be made for a person’s maintenance, education or advancement in life from the deceased’s estate. Eligible persons may include;
- The husband or wife of the deceased at the time of their death.
- A person with whom the deceased person was living in a de facto relationship at the time of the death.
- A child of the deceased person, or if the deceased person was living in a de facto relationship at the time of death, a child of that relationship.
- A former husband or wife of the deceased person.
- A person who was, at any particular time, wholly or partly dependant on the deceased person, and who was, at any time, a member of a household of which the deceased was a member.
- A grandchild of the deceased who was at any particular time, wholly or partly dependant on the deceased.
- A former de-facto spouse not expressly listed may be eligible if ever wholly or partly dependent on the deceased and ever a member of a household that included the deceased.
- A Step-child, parent or sibling, not expressly listed may be eligible if they can establish that at any stage they were wholly or partly dependent on the deceased and they were at any stage a member of the deceased’s household or had a close personal relationship with the deceased at the time of death.
In Ball v Newey the term ‘dependent’ was said to be used in the ordinary sense of the word, meaning the condition of depending on something or someone for what is needed. In Petrohilos v Hunter the court said:
The word ‘dependent’ is an ordinary English word, and whether a person is or has been wholly or partly dependent upon another is a question of fact. No doubt one of the commonest forms of dependency is a financial one, in the sense that the dependence flows from the fact that accommodation, food, clothing and other necessities or amenities of life are provided by the person who owns or is otherwise entitled to the accommodation and pays for the other things.
In McKenzie v Baddeley dependency was described in terms of “financial, economic or material dependency, not a mere emotional dependency”.
Further, the statutory requirements of a ‘close personal relationship’ are found under section 57(f) of the Act and were applied in Dridi v Fillmore.
In that case Macready M considered the elements that must be present in order for two people to be considered to be in a close personal relationship as defined under section 5 of the Property (Relationships) Act. He stated:
I have earlier referred to aspects of what the Act describes as a “close personal relationship”. It has to be between two adult persons who are “living together”. Given that they may be members of the same family, such as a grandparent and grandchild and the different definition for a “de facto relationship” concepts relating to a “couple” are not relevant. Instead the definition calls for two different links. The first is that the parties are “living together”. The second is that “one or each of whom provides the other with domestic support and personal care”.
Who can inspect the will?
Pursuant to Section 54(2) of the Act the following persons are entitled to inspect the will of the deceased:
- any person named or referred to in the will;
- any person named or referred to in an earlier will as a beneficiary;
- the surviving spouse, de-facto or issue;
- the parent or guardian of the deceased;
- any person entitled to a share if the deceased has died intestate;
- any parent or guardian of a minor referred to in the will or who would be entitled to a share if the deceased died intestate;
- any person/creditor who may have a claim against the deceased;
- any person with management of the deceased’s personal estate immediately before death;
- an attorney under the deceased’s enduring power of attorney;
- any person belonging to a class of persons prescribed by regulations.
Applying for Probate:
Probate in NSW is governed by the Probate and Administration Act 1898 (NSW). Probate is a court order that confirms that the will is valid and that the executors have the right to administer the estate. Before applying for Probate an intention to apply for probate must be published on the Supreme Court of NSW’s website. Fourteen days later, an application for Probate can be made by lodging the correct forms at the Probate Registry of the Supreme Court. The following must be lodged:
- Proof of death (e.g. the death certificate).
- The inventory of property.
- An executor’s affidavit.
- The original will.
Where the deceased died intestate:
Where the deceased died without a will, the legal term is that the deceased died intestate. In such a case, a grant of Letters of Administration will be applied for instead of a Grant of Probate. The estate of the deceased will then pass to their eligible relatives as specified by the Act.
Under Chapter 4 of the Act, when there is no will the order of beneficiaries are as follows:
- Where the deceased is survived by a spouse or spouses and has no issue then the spouse or spouses are entitled to the entire estate.
- Where the deceased is survived by a spouse/spouses and issue of spouse/s then the spouse/s is entitled to the entire estate.
- If survived by spouse/s and issue of another relationship (e.g. issue of an ex-spouse or ex-domestic partner) then the spouse is entitled to:
- Right of one spouse to acquire any property: The spouse of an intestate has the right to acquire any of the property that belonged to the deceased. The purchase price paid for the property is firstly paid from the spouse’s entitlement in the estate and if insufficient then from their own resources. The spouse may acquire any real estate or personal property such as a car, boat or shares.
- If survived by multiple spouses then the multiple spouse/s entitlement is shared:
- in accordance with a written agreement they make between themselves and submit to the administrator of the estate: OR
- In accordance with an order of the Supreme Court; OR
- Equally between them.
- If survived only by issue then the:
- Children of the estate will share equally;
- If the children of the intestate are deceased leaving children of their own, then those children will share the portion of the estate that their parent would have received;
- This will continue down the generations until there is no further issue.
- If survived by other relatives then the relatives will inherit as follows:
- Siblings (either whole or half-blood)
- Aunts and uncles (either whole of half-blood)
- Cousins (either whole of half-blood)
- The Crown
Letters of Administration are a court order that allow an estate to be administered when there is no will, or when there is a problem with the will for example when the will does not appoint an executor or the executor is incapable of acting. After the proper inquiries show that no will has been left, one of the eligible relatives can apply for Letters of Administration. This involves steps similar to those required for a grant of probate. The following documents will need to be filed at the Supreme Court in addition to those required for Probate:
- An affidavit stating that the deceased was not living in a de facto relationship, unless the application is being made by the de facto spouse (which can include a same-sex partner) in which case a detailed affidavit is required confirming the applicant is a de facto spouse.
- An affidavit of applicant for administration (instead of affidavit of executor).
- An administration bond, if required.
Affidavit of applicant for administration
The affidavit of applicant for administration must:
- Identify the deceased’s eligible relatives by supplying the necessary birth, marriage and death certificates;
- List the searches made for a will or other documents that set out the deceased person’s testamentary intentions.
- List the assets and liabilities of the deceased.
- Attach the death certificate and have published notice of intended application online at least 14 days before the day they intend to file the application.
Before December 2001, the applicant had to lodge an administration bond securing the entitlements of next of kin who were not parties to the application and had not consented to it. This requirement did not apply when the application was made by all the beneficiaries in the estate. Since December 2001, an adult beneficiary who is not a party to the application for administration need only be served with notice of it. In some cases, a bond may be required, for example to secure the entitlements of a beneficiary under 18 years of age.