Brisbane’s Legal Lowdown: Debunking myths about contesting Wills

Dean: Anyway, it is time for this week’s Brisbane legal lowdown with Attwood Marshall Lawyers, and today we’re going to break down some of the most common myths around contesting wills in Australia. We’ll also talk about that story that I’ve just discussed with you.

To help us separate fact from fiction and set the record straight, I’m joined by estate litigation senior associate. Have you got an acronym for that Duncan MacDougall?

Duncan: Yeah. Well, you can call me an SA if you want.

Dean: Hey, SA. Okay. I think that means something else, but anyway, mate thanks for joining us today.

Well, let’s start with what I was talking about. Do you hear about that very often?

Duncan: Oh, it can happen. The unfortunate thing is when they don’t have wills in place, generally it’s going to be outlined under the rules of intestacy, so it’s down to a legislative list of rules on who’s going to benefit from the estate and who is going to be taking control of the estate at the end of the day.

So, it goes down a bit of a legislative list of people in the family and when they’re not there, the last in line there is the state.

Dean: Right. And it sounds like the state says the buck ends with me. I’ll take all those bucks. That’s why I’m assuming it’s pretty important that you, you get your ducks in a row was what mum and dad used to say.

Let’s start with an easy one then. Are handwritten or do-it-yourself wills just as valid as a will that’s prepared by a lawyer?

Duncan: Well, on the surface, yes, but unfortunately, where the problem lies is that those types of wills are often contested down the track by family. Now it’s one of those things that either we see issues all the time where it’s hasn’t been validly executed, so it hasn’t been signed properly, hasn’t been in the presence of two witnesses, the actual contents is out of whack, so they may not have a clear understanding of the distribution of their estate, who’s going to be taking control of their estate and not understanding about actually what’s going to be forming part of their estate for estate assets versus non estate assets, things of this nature.

So, when we see issues down the track, after they pass away, it’s often because of those things. Whereas a solicitor can then, whilst doing their estate planning, it’s not just putting pen to paper, it’s giving that advice so that it can make informed decisions as to how to distribute and make sure that their wishes are carried out.

Dean: I’ve heard people say Duncan, that if you leave somebody one dollar in your will or a small gift, a small amount of money, it can stop them from contesting the will. Is that true?

Duncan: That’s simply not true. It’s another myth, so you may commonly hear, well if I give them something, it’s going to prevent them from making a claim. You’ll have more of a relationship with your beneficiaries than we ever will. But at the end of the day, those people, whether that be, for example, an adult child, will still be eligible to make a claim in the event that they’ve been inadequately provided for.

It’s a bar that they may be eligible, it’s another thing whether it’s going to be a valid claim, there are a number of different things that the Court considers in that respect.

Dean: Well, what’s inadequately provided for mean? Say there were two siblings, two people, one got everything and the other one got, you know, ten per cent. Is that okay?

Duncan: At the end of the day and the crux of it is based on need, so they’re going to have to demonstrate further need.

So, a lot of the times their financials will come into play, their spouse’s financials will come into play. The size of the estate, their relationship with the deceased, all these sorts of different factors will go into determining what the court considers adequate in the circumstances.

Dean: And what about in the case if one of those people are also the executor, does that make things kind of even trickier?

Duncan: It does make things trickier, and they may at one stage or another become in a position of conflict where maybe perhaps you need an independent person to be administrating the estate, especially if they’ve got both roles. They’ve got the hat of the executor, but also, they’ve been nominated as a beneficiary. That creates issues on that front.

Dean: So, say they were nominated as the senior beneficiary and also the executor. I mean you would think that that’s almost a conflict of interest. Is it?

Duncan: It could very well be the case. It all is going to come down to what actions those other beneficiaries take in that respect. So if they’ve been inadequately provided for, they believe they’ve been inadequately provided for, it’s going to be negotiations with that with that executor, but the problem is the executor has to act in the best interest of all beneficiaries and their duty is to uphold the terms of the will to the best they can. At the same time, weighing up claims against the estate.

Dean: Wow, it’s a tricky one, isn’t it? How often is it that we see, you know what should have been a, you know, a 50/50 split in an estate turn into something other than, you know, 50 or 33 and a third percentage split of an estate? How often do you see, you know, this not happen? Things aren’t offered out fairly and squarely.

Duncan: Yeah, well, that’s why this whole claim process exists because it’s based on this moral duty for a parent to provide equally for their spouse and then subsequently their children, for example. But the rise with blended families and the dynamics that have changed over time. You’ve got step kids. You might have kids that have been estranged. You might have lost contact with them, saying, well, they haven’t been helping out on the family farm, for example. It’s been a while since I’ve heard from them. Let’s not give them what they’re what this other son or daughter has provided for me over my lifetime. But at the end of the day there’s that moral duty as well that that comes into.

Dean: I think what’s quite interesting in this day and age is that sometimes the estate is worth so much money now. You know, with the rise in the values of property, is that people end up fighting over, you know what might have been tens or hundreds of thousands, now it’s millions, isn’t it? It’s quite incredible.

Duncan: That’s it. And just on the topic of last week, superannuation. Sometimes superannuation will form part of the estate as well, which will include your member balance and any associated death cover, any sort of life insurance that you’ve got associated. So, it may just increase that pool of assets which could be quite substantial.

Dean: Yeah, very, very interesting. If you’ve got a question for Duncan, we’d encourage you to text it through 0499 880 882 or you can also phone us, 133 882.

Now what about including a no contest clause in your will? Does that actually stop somebody from contesting it?

Duncan: In short, no as well. At the end of the day, if they remain eligible, it’s one thing again to be eligible, to make a claim, it’s another thing to actually demonstrate that eligibility. But the other thing is if there’s a no contest clause in there saying, well, I don’t want this person to make a claim against the estate, that’s not going to hold up.

Dean: Okay. Alright, so what could people do in order that there is no contest? Do they put a perhaps a legal letter, a stat dec?

Duncan: Yeah, exactly right. It may be the opportunity to put forward evidence in the form of a stat dec, for example, a statutory declaration whereby you outline your said reasons why you’re not distributing your estate to this person or distributing the estate in the manner that you’ve got under your will. Then at the end of the day, if the claim is made against your estate, your executor can use that as evidence to at least put in the courts mind, this is the mindset of the deceased, or sorry the will-maker at the time of preparing their will.

Dean: Okay. I got a question from Bev from Paradise Point, she says, can you ask if a will is prepared by the public trustee, is it any good, or if there is any catch in doing this?

Duncan: The catch is it’s going to be expensive and you’re not going to get appropriate advice. Again, not just the DIY or at home will kits that you prepare, a lot of times where we see issues in terms of people making claims against the estate are those wills that have been prepared by the public trustee. So it is a service that exists, but at the end of the day they may not be getting the appropriate advice, and that’s coming from a from a lawyer whose had experience in these issues and a lot of the times they may not have a full understanding of even some of the tax consequences that come into play.

Dean: Okay, let’s talk about chasing down what you think you’re owed from an estate. Let’s talk about costs. No doubt that’s a big concern for anybody considering contesting a will. Is it treated if somebody contests the will that the estate always covers the legal costs?

Duncan: Not necessarily, no. And I hate to say it, but it’s a common phrase lawyers always say, it depends on the circumstances. In this case, if down the track it could very well be the case, it’s paid out of the estate. But most of these things remember, these are claims that were resolved outside of a court generally.

Dean: So a mediation?

Duncan: A median always has to take place before it even sets foot in a courtroom. So generally, when a deed of agreement is reached, between the executors and the beneficiaries, they will outline who’s going to be paying those costs. In most cases at least from experience, it’s going to be the parties paying their own costs.

But it depends on the basis and the grounds of their claim as well down the track as well. So, if they’d have no real basis for their claim, in the court setting, the court may award that they pay their own costs.

Dean: Alright. Now what if someone was promised something like property, but it’s not in the will. Is there anything that they can do about that? Or is it just simply too late?

Duncan: Back to that example of the common example is: I’ve been on the family farm, it says, yeah, I’ve been assisting mum and dad with the farm for forever and that’s been promised that it’s going to be handed down to me, or the house is going to be handed down to me. There is some promissory actions that can be taken, but it’s a hard bar to get across. There’s unfortunately, with those types of things it’s often not in writing, it’s verbal, it’s that lack of evidence at the end of the day. So it may be in the best interest down the track to pursue other avenues such as a family provision application.

Dean: And how does that work?

Duncan: So that’s in the event that again somebody’s inadequately provided for, as long as you meet that threshold as an eligible person, it’s very state by state, but generally that will be a spouse, including de facto spouse, children including stepchildren, and anybody financially dependent on you, at least in Queensland.

Dean: So is that what they call launching probate?

Duncan: No. So that’s separate. So, probate is simply just think of it as like a court licence or a golden ticket for an executor to administer the estate in in accordance with the will. It’s a stamp of approval from the court to say, yep, that’s a valid will, and that’s an entitled person to administer the estate.

Dean: Fascinating, isn’t it? Because so many people find it difficult to talk to their parents about, you know, how the estate’s going to be divided prior to their death? Because it would seem to be, you know, something that you wouldn’t talk about. And then they have to wait and get the surprise at the reading of the will. Do you see a lot of that?

Duncan: All the time, and when generally in my experience on taking those will instructions, I say if you’re comfortable, have a sit down with the family say these are my intentions as it is now, you know, these are the reasons why and this is what I’m purporting to do. Because at the end of the day, the more surprises that happen, that’s where we see that sometimes they expect something coming to them when it doesn’t actually happen.

Or at the end of the day, get your affairs reviewed every two to three years, as your circumstances change and make sure that your intentions are carried out.

Dean: Yeah, okay. Fascinating. If you’d like to make a call or a comment on this, give us a call, 133 882 is the number or text us 0499 880 882 is the number.

Mate, really fascinating stuff. Thank you, Duncan.

For more advice, you can head to attwoodmarshall.com.au

Really appreciate your time. And I know you’ll be joining the show again on Sophie’s return, it’s twelve minutes away from three o’clock.