Townsends Business and Corporate Lawyers solicitor Julie Hartley explained that there are a number of hoops to jump through to establish and prove the true intentions of the testator and protect from will disputes.
She gave the example of Megan, a wealthy widow who wants to leave her estate to her closest friend, Jonathan. She also wants to leave a small bequest of $50,000 to her brother Andy, with whom she’s not close.
Megan and her brother own a property together and split the income 50/50. Megan has also been giving her brother $1,000 a month for the last five years.
Her will nominates Jonathan as her executor, but Ms Hartley warned there are several things of which Megan and Jonathan need to be aware.
1. The will could be challenged under the family provisions law
This means Andy could argue he is eligible for a larger portion of her estate as Megan hasn’t “adequately looked after him” in the will.
Ms Hartley explained: “If the court found that Andy was not adequately provided for under Megan’s will, the court could increase the amount Andy is to receive from the estate, thereby reducing Jonathan’s entitlement.”
Generally only current, former and de facto spouses, children, and those who were “wholly or partly dependent” on the deceased can make a claim under the Family Provision law.
Siblings don’t generally fit into these categories, but due to the $1,000 Megan gave Andy a month, he could potentially make a case.
However, whether Andy was reliant on his sister can only be determined on an individual basis.
“Would the fact that the $50,000 gift amounts to only four years’ worth of the money Megan had been regularly giving her brother be sufficient to demonstrate he was not adequately provided for under the will?” Ms Hartley questioned.
What to do?
Outside of stopping her payments to her brother, Megan and Jonathan’s options are limited.
However, Megan and her estate planner could review the will with Andy’s circumstances in mind and determine whether her provision was reasonable.
It could also eventuate that if Megan and her brother had planned to sell the property, Megan could make clear that that her $1,000 payments to Andy were an advance to him from his 50 per cent share of the sale proceeds. As such, those grants weren’t technically gifts, but loans.
“Documentation could be drawn up now, depending on how conciliatory Andy is willing to be, to confirm or formalise that arrangement, which may have the effect of undermining his ability to make a family provision claim,” Ms Hartley said.
2. Andy could say Jonathan had “undue influence” over Megan
While Megan and Jonathan don’t have a romantic relationship, they are close friends. Andy could therefore argue the will was created to benefit Jonathan due to his influence over Megan.
Should the court rule in Andy’s favour, Megan would have died without a valid will and her brother would most likely be regarded as her effective next-of-kin and receive her estate.
What to do?
Ms Hartley explained that undue influence occurs when a will doesn’t express the deceased’s real intentions as a result of influence and leads to the detriment of other parties.
“It can be extremely difficult to establish as, for example in this scenario, it would fall on Andy to prove undue influence in circumstances where Megan would no longer be available to testify in court about her reasoning and motivations behind her bequests,” the solicitor said.
“Other witnesses (such as her doctors, healthcare providers, family members, lawyers, etc.) would need to testify about their knowledge of the relationship between Megan and Jonathan to help the court determine whether Megan was the victim of undue influence on Jonathan’s part.”
An estate planning lawyer would also be useful in proving Megan understood her will when it was explained to her, without Jonathan being present, and there was no evidence of undue influence from Jonathan.