Family provision

Geoffrey Steinmet married twice and died leaving the bulk of his estate to the children of his first marriage James and Nicole. He provided his second wife Gayle an indexed annuity of $52,000 per year (“the annuity”). Geoffrey executed the Will a few weeks before he died.

Prior to executing the Will Geoffrey sought and received Gayle’s agreement to its terms. Geoffrey’s Will contained a statement that he wished that his estate remained a whole for his children and grandchildren believing that the annuity enabled Gayle to live comfortably for the rest of her life without “having to dispose of the assets that I have worked my whole life for.”

Gayle seemed to think that the annuity was adequate when the Will was made. She was in a hospital room with Geoffrey and his solicitor. The draft Will was read aloud in her presence and attention was given to the annuity. Geoffrey increased the value of the annuity and asked Gayle: ‘Are you happy with that?’ To which she replied ‘Yes, but I keep telling you Geoff that I do not want anything from your estate’.

Following Geoffrey’s death Gayle became aware of the size of the estate and sought an alteration to the Will to leave her a sum of $2 million.

Geoffrey and Gayle began their relationship in 1988 but they did not marry until 2011 and he died in 2016.  Gayle had bought her own home in 1991, and had her own assets and additional income. During their relationship she was unaware of the precise extent and value of Geoffrey’s business and investments.

The disparity between the annuity and the gift to James and Nicole is considerable. But family provision cases are not simply about a comparison between the size of the estate and the amount of the provision that has been made for each beneficiary; or whether the annuity is fair or reasonable; or whether the deceased was wise or just. The question for determination is whether the annuity is not ‘adequate’ in all of the circumstances for her ‘proper’ maintenance or advancement in life.

The Court decided that the annuity will enable Gayle to continue to live in the home that she has owned since 1991. She will not be in a position to live extravagantly, but she did not do so when married. James and Nicole had a different relationship with their father and they have different needs.

The Court believed that Gayle did not establish that the provision given to her in the will is not adequate for her proper maintenance or advancement in life. She will not have the benefits, the security, the holidays, the comforts and the additional financial advantages that she enjoyed during her relationship with the deceased. But respect must be given to the judgment of a capable testator who knows better than anyone else ‘the virtues and failings of the members of his family’. And the Court must give sufficient weight to the principle of freedom of testamentary disposition.

Gayle argued that a testator cannot rule from the grave. However the Court believed that such a statement is correct if and only if, the application of the statutory language to the facts of the case warrants the intervention of the court.

After considering Gayle’s submissions the Court came to the conclusion that rewriting the Will to set aside the annuity and replacing it with a lump sum would have been anathema to Geoffrey’s Will.

 

 

Barry White – Update

Barry White died in July 2003, at the age of 58; he left behind 2 ex- wives, a long-term partner and 9 children. Although his estate was estimated to be worth $20 Million Barry White had not updated his Will for many years.

Although Barry and his second wife Glodean had been separated for many years, they had not divorced, therefore Glodean inherited his estate. His partner Katherine Denton received nothing.

Katherine took court action against Glodean, for a share of the estate. As she had always been told by Barry that that she would have enough money to live off for the rest of her life and could continue to live in their house in Los Angeles and she had given birth to a daughter Brianna four weeks before Barry died.

The Court ordered that Brianna undergo a DNA test to verify her paternity. The test proved that Barry did not father her daughter. Glodean allowed Katherine to live in the couple’s home but she received little else from the estate.

Barry’s eldest daughter Denise discovered that he was her father eight years after the Will was written. When she told Glodean that she planned to secure her rights as an omitted child, she was told that she would receive her share of the estate just like the other beneficiaries.

Over a period of 10 years Denise reportedly received irregular payments from the White Family Trust in various amounts valued at more than $350,000. Then she was suddenly cut off.

Similarly Barry’s son Daryl commenced action against Glodean to view Barry’s Will and have the estate properly audited claiming that Glodean misled him by claiming that he should not worry about asserting his rights to the estate and promised to distribute his share of the estate on a monthly basis. After 10 years payments became sporadic and then ceased.

White was overweight for most of his adult life and suffered from related health problems. He had been admitted to hospital as a result of high blood pressure, and cancelled tour dates owing to ill health. In September 2002, he was hospitalized with kidney failure attributed to chronic diabetes  and high blood pressure. While undergoing dialysis and awaiting a kidney transplant in May 2003, he suffered a severe stroke, which forced him to retire from public life.

It is interesting that Barry did not update his will even though he suffered from such bad health. However it is an illustration of the need to update your Will when your circumstances change. If you don’t have a Will you should prepare one. Your Will directs how you wish your estate will be distributed at the time it was created. This may not reflect your wishes several years later. A will also helps protect your loved ones from disputes and litigation arising following your death.

Intestacy, Delay, Benjamin Order, Bona Vacantia

Henry Lewis Cooper died intestate in May 1996 aged 79. The gross value of the Henry’s estate was approximately $47,000, and the amount now held following realisation of  assets and payment of liabilities is approximately $54,000.

Henry never married or had children, had no de facto wife and died with no close relatives. The Court appointed the NSW Trustee and Guardian (“the Trustee”) as administrator of Henry’s estate in July 1996. A notice of intended distribution of the estate was published in August 1996 no claim has been made by any person as next of kin.

The Trustee applied for aBenjamin order” which would permit the Trustee to distribute the estate on the basis that there was no person entitled on the deceased’s intestacy and the estate should, therefore, pass to the Crown as bona vacantia.

A “Benjamin order” permits the executor or administrator of a deceased’s estate to distribute the estate on a particular factual basis notwithstanding that there is some uncertainty about a factual matter relevant to the distribution.

A Benjamin order enables trust property to be distributed in accordance with intestacy regulations whilst protecting the executor from liability if a person entitled to a portion of the estate subsequently appears.

In support of a Benjamin order, an applicant must disclose:

  • Who is (or may be) entitled to that part of the estate which is in issue
  • What difficulties lie in the way of distribution
  • What evidence has been gathered directed to the difficulties
  • What attempts have been made to plug gaps in the evidence
  • The nature and the extent of advertising to alert those who have an interest in the estate.

Importantly a Benjamin order doesn’t prevent a beneficiary from instituting proceedings against the person amongst whom the estate has been distributed to compel them to refund (in whole or in part) what has been received.

The order of distribution is,

  1. To the deceased’s spouse or de facto spouse.
  2. To the deceased’s issue.
  3. To the deceased’s parents.
  4. To the deceased’s brothers and sisters of whole or half blood.
  5. To the deceased’s grandparents.
  6. To the deceased’s uncles or aunts
  7. To the Crown as bona vacantia

The Trustee was able to submit evidence that satisfied the Court that Henry’s parents and all of his siblings predeceased him.  The remaining question is whether any grandparents or siblings of his parents survived him. The fact that as Henry was 79 years old when he died renders the remaining question as to whether he was survived by his grandparent or any aunts and uncles extraordinarily unlikely.

The Court was satisfied, on the evidence, that the possibility there were some person entitled to the deceased’s estate when Henry died intestate in 1996 was so remote that it may be disregarded, and that a Benjamin order should be made authorising the Trustee to transfer the estate to the Crown as bona vacantia; however if a beneficiary comes forward their rights to recover a share of the estate from the Crown are not lost.

The Trustee sought an order that costs be paid from the estate. However the Court believed that in the circumstances the Trustee must make full disclosure to beneficiaries even where such disclosure might be embarrassing or potentially lead to criticisms of, and/or claims against the Trustee, as to why it took more than 21 years for the application for a Benjamin order to be made.

 

 

 

 

 

 

 

Riche James – New information

Richard James Edwards (Richey James)  a Welsh musician who was lyricist and rhythm guitarist of the band Manic Street Preachers disappeared on 1 February 1995 and was declared presumed dead in November 2008.

Richey suffered severe bouts of depression in his adult life and was open about it in interviews. He also self-harmed, mainly through stubbing cigarettes on his body, and cutting himself, was alcoholic, and suffered from anorexia… After the release of the band’s third album he checked into a psychiatric hospital, he rejoined the band following inpatient treatment.

Richey’s’ final live appearance with the band was at the London Astoria, on 21 December 1994. On 1 February 1995, Richey disappeared. In the two weeks prior to his disappearance, Richey withdrew £2800 from his bank account, in amounts of £200 a day. He checked out of his London Hotel and then drove to his apartment in Cardiff, where he left his passport, credit card and anti depressant medication. Then he vanished.

In the two weeks that followed there were reports of sightings at a passport office and the market square in Newport (a town to the north of Cardiff).A taxi driver claimed that on 7 February, he picked Richey up from a hotel in Newport, drove him around the Welsh valleys, including through the village where Richey’s grew up and dropped him at the Severn View service station; the passenger paid the fare in cash.

On 14 February, a parking ticket was issued for Richey’s’ car which had been parked at the Severn View service station. The car was reported as abandoned three days later. When Police investigated they found that the battery was flat, and it appeared that the car had been lived in.

Due to the service station’s proximity to the Severn Bridge (reportedly a notorious suicide spot) it was widely believed that Richey took his own life by jumping from the bridge. However since then there have been reported sightings at various locations throughout the world. However, none of these have proved conclusive.

Richey’s parents were granted a Court order declaring him to be presumed dead in November 2008. It was reported that it was not accepting that he was dead rather

“an acceptance that his affairs have got to be sorted”.

The Probate Registry of Wales named his parents as his executors and stated that he had “died on or since” February 1 1995. They can now release assets frozen in bank accounts since his disappearance. The estate was valued at £455,990, reduced after liabilities to a net value of £377,548.

Richey was 27 when he disappeared and left no will. He had no spouse or children so his parents inherited his entire estate under intestacy laws. The Manic Street Preachers — had been placing a quarter of the royalties earned by the band in an account for him, should he resurface.

Richey’s sister Rachel was interviewed recently stating that the family hoped a new line of enquiry will be opened due to new information.

“ we have the toll booth receipt that says 2:55. However it was a 24 hour clock, so that meant 2:55 was 2:55am.”

The family originally sought information from people who had seen him at certain times on the day he disappeared on the basis they believed that there was an eight hour window between departing the hotel to crossing the bridge at 2:55pm.

A Will is just one of the tools that is at your disposal for planning for your future. Importantly it is better to have a Will so that your loved ones have the power to direct your estate.

 

When making a will language is important

Leonard Mas died in August 2014. His wife Helen died in 1995. Leonard had no children and no siblings, however Helen had two sisters and five brothers, who had twenty-five children.

Leonard’s will dated 19 June 2014 (“the Will”) appointed his brother in law Douglas Weston and his Nephew Andrew Donaldson as the executors and trustees of his estate. Probate of the Will was granted in June 2015.

Clause 3(b) of Leonard’s will provides for the residue of his estate to be distributed equally between my nieces and nephews or the survivor of them.

As Leonard had no siblings he had no nieces or nephews who are blood relatives (by consanguinity). Twenty-one of Helen’s siblings twenty-five children (nieces and nephews by affinity), are living and three nephews are deceased. Of the deceased nephews, one had no children, another had two children and the other had five children. Despite extensive efforts Douglas was not able to locatethe remaining nephew Robert Weston.

Douglas sought the Courts determination of the following questions arising in the administration of the estate:

  • Does the expression ‘my nieces and nephews’ in the will mean the nieces and nephews of his wife, Helen.
  • If the answer to the question (a) is ‘yes’, should the gift contained in paragraph 3(b) of the will of the abovementioned deceased take effect in favour of the nieces and nephews of his wife Helen?
  • Can the executor be entitled to cease any further searches for [Robert] Donald Weston [born 20 September 1964]?
  • If the answer to the question [(c)] is ‘yes’, should the executor be at liberty to distribute or apply any share of the estate to which [Robert] Donald Weston may be entitled to the remaining ‘nieces and nephews’ of his wife Helen.

The Court discussed the construction of the Will and held that as Leonard executed his will two months before his death and there was no suggestion of any testamentary incapacity therefore the expression ‘nieces and nephews’, which is unequivocally theoretically capable of being applied to both nieces and nephews by consanguinity and nieces and nephews by affinity. Therefore in answer to questions (a) and (b) is yes.

Robert Donald Weston

Douglas has sought A Benjamin order regarding the inability to locate Robert Donald Weston. A Benjaminorder takes its name from the decision in Re Benjamin; Neville v Benjamin.[In that case, following enquiries made to ascertain his whereabouts, Philip David Benjamin was presumed dead, with the result that the benefits accruing to him under the deceased’s estate were redistributed to the other beneficiaries.

The effect of a Re Benjamin order is to enable the executor to distribute the estate to those members of the class that have been ascertained at the time of distribution, whilst ensuring protection of the executor if a person entitled to a portion of the estate subsequently appears. If such a person does appear, he or she is not entitled to make a claim against the executor for that portion but may claim against beneficiaries who have been paid incorrectly.

If a Re Benjamin type order were considered appropriate in the circumstances of these proceedings, it may be necessary for the Court to order that further enquiries be undertaken, to ascertain whether members of the class can be located, prior to any distribution of the gift contained in the subject clause.

Douglas applied for a Re Benjamin order submitting evidence that he and his solicitor had undertaken an extensive and exhausting search for Robert Donald Watson including a instructing a Legal Genealogist to investigate his whereabouts. Unfortunately he has not been located nor has it been established that he is alive. The Court held that evidence submitted by Douglas revealed gaps in the search for information for the whereabouts of Robert Donald Weston. Accordingly, further enquiries and searches are necessary before distribution of Robert Donald Watson’s share of the estate.

Interestingly this is another example of the importance of written expression in the construction of a Will. If Leonard had siblings with children the situation could have been very different.

 

 

 

 

 

The 3 Great Evils of Probate Practice

Laurette Keddie and Diana Davies shared a house from the mid 1970s. They shared a platonic relationship and maintained separate finances at all times. Laurette  purchased a property at 83 Drabble Road, Scarborough in the 1980s. Adrian Sloan, was Laurette and Diana’s  accountant from 1993 until approximately June 2012. In October 2001 Laurette asked and Adrian accepted a power of attorney (first POA). In January 2005 Laurette made her last will. Probate of this will was granted to Adrian following her death.

In March 2005 Laurette sold the Drabble Road property and purchased a unit at Kilpa Court, City Beach (the Kilpa Court property). Diana and Laurette lived at the Kilpa Court property between 2005 and 2011.

In 2011 Diana was admitted to an aged care facility. Laurette continued to live in the Kilpa Court property. In March 2012 Laurette appointed Adrian and he accepted her enduring power of attorney with no restrictions (the second POA). Throughout 2012 Laurette’s health deteriorated. She was not able to care for herself. At the urging friends and family she moved to an aged care facility Aegis Yokine in June of 2012.

Laurette was unhappy with the aged care facility and wished to move back to Kilpa Court. Laurette’s family and friends thought that such a move was unwise .  Adrian arranged for Diana to move into Aegis Yokine in an attempt to assist Laurette transition to the facility. Following this Laurette ceased using Adrian as her accountant and changed her POA.

The Kilpa Court property was leased to assist with the costs of her care however Laurette claimed it as her main residence for tax purposes between 2012 and 2015.She died in September 2015 following a prolonged illness. Probate of Laurette’s will was granted to Adrian in November 2015. Diana died November 2016 and probate of her estate was also granted to Adrian in April 2017. There was no dispute as to the validity of either will.

A question was raised as to whether or not clause 2 of Laurette’s will effectively disposed of the Kilpa Court property:

I give my motor vehicle, my household chattels and my principal place of residence at my death to my friend Diana Elaine Davies of 83 Drabble Road, Scarborough, in the State of Western Australia.

In assessing the question the court held that if clause 2 does not act to cover the Kilpa Court property then that property would fall into the deceased’s residuary estate. However if the clause acts on the Kilpa Court property then it will pass to the estate of Diana.

I have posted before about the ‘armchair principle’, which allows a court to consider the Will makers factual circumstances (the testator’s property, family, acquaintances and friends) when the will was made. But the armchair principle cannot be stretched to give words or phrases a meaning where essentially the court is making a fresh will.

The ‘armchair principle’ does not allow the Court to take the testator’s intentions into account.  If after the admission of this factual evidence the words still remain ambiguous, then except in the case of equivocation (where the language in the will may be applied equally to two or more people or two or more things) no further evidence will be admitted and the disposition will be void for uncertainty.

In his judgment Sanderson M stated that there are three great evils that bedevil probate practice. The first and by far the most egregious is a homemade will. Second there is the problem occasioned by no will at all where an intestate estate is distributed through legislation. This matter is an example of the third where there is a will but the testator’s circumstances have changed and the will has not been updated.

After assessing the facts of this case that Court accepted that the Kilpa Court property was not Laurette’s principal place of residence as at the date of her death. Although she was not happy when she moved into the facility and wished to move back to Kilpa court she did not do so, she was a resident of Aegis Yokine.

The Court held that in selling the furniture that she had at the Kilpa Court property, giving away her dog and leasing the property, and that Diana moved into Aegis Yokine so she and Laurette could be together further confirms the move out of Kilpa Court was permanent. Notwithstanding that for tax purposes the Kilpa Court property continued to be referred to as her principal place of residence it was clearly not the case.

Accordingly the Court was satisfied that the Kilpa Court property is not the subject of the disposition in cl 2 of Laurette’s Will and is therefore part of her residuary estate.

I have posted before that there are events in your life that should trigger making or updating your will. A Will is a planning document. If you have bought or sold an asset you should make a new Will.

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Aretha Franklin Queen of Soul had no Will

Aretha Franklin born in Memphis, Tennessee, in 1942 died earlier this week from advanced pancreatic cancer. In her career, Aretha — the Queen of Soul — won 18 Grammy Awards and had more than 100 singles on the Billboard charts.

As a young teen, Aretha performed with her father C.L. Franklin, a Baptist minister and a civil-rights activist on his gospel programs in major cities throughout the country and was recognized as a vocal prodigy. As a 14 year old her album The Gospel Sound of Aretha Franklin (1956) captured the electricity of her performances. At age 18, with her father’s blessing, Aretha visited New York, where she signed with Columbia Records.

Aretha’s popular singles are now considered classics. In 1967, Franklin released “Respect,” arguably her most famous song, which became an anthem for the political movements of the time. Importantly Aretha maintained ownership of her original compositions, which include well-known hits such as “Think” and “Rock Steady.”

Aretha also sang at the inauguration of Barack Obama in 2009, and at concerts for Jimmy Carter in 1977 and Bill Clinton in 1993.

It has been reported that unlike many performers Aretha was protective of her finances demanding cash payments (which she kept in a handbag near her onstage) before performing live.

In 1968, Aretha performed “Take My Hand, Precious Lord,” at Martin Luther King’s funeral. It has been reported that when Dr. King was alive, on several occasions Aretha helped the SCLC make payroll. Throughout her career whenever Aretha performed it was a contractual obligation that she would never perform for a segregated audience.

In 1970, feminist activist, scholar, and a then-avowed member of the Communist Party Angela Davis  was arrested and incarcerated for 16 months for what were found to be wrongful kidnapping and murder charges. Aretha wanted to post her bond,  “whether it’s $100,000 or $250,000… Angela Davis must go free.”

Aretha noted that she had the money to post bond because she’d earned it from black people. She therefore wanted to use it “in ways that will help our people.”

In 1987 she became the first female artist to be inducted into the Rock and Roll Hall of Fame, and in 2008 she won her 18th Grammy Award, making her one of the most honoured artists in Grammy history.

A notoriously private person it appears that she did not leave a Will or trust. Under Michigan law, the assets of an unmarried person who dies without a will are divided equally among their children. Aretha had been married, and divorced twice. This week her four sons filed a document listing themselves as interested parties in her estate stating that Aretha

“…died intestate and after exercising reasonable diligence, (we are) unaware of any unrevoked testamentary instrument relating to property located in this state as defined.”

Aretha’s niece Sabrina asked the court to appoint her as personal representative of the estate.

Aretha’s attorney in regard to copyright matters, song publishing and record deals had wanted her to form a trust for a number of years in order “expedite things and kept them out of probate, and keep things private.”

Although it has been reported that Aretha’s estate is valued at around $80million due to her cultural legacy it’s impossible to place a dollar figure on the value of her song catalogue.

It is not uncommon for people to die intestate, as I have posted Prince, Billie Holliday, and Kurt Cobain died intestate, however given Aretha’s legacy, business acumen, and long illness it is surprising that she wasn’t more like David Bowie who was similarly diagnosed with a serious illness but made arrangements for the control of his legacy.