Indigenous Intestacy

The recent establishment of compulsory superannuation that often includes insurance entitlements has lead to young adults often having significant assets if they were to die unexpectedly that may not be readily accessible by a beneficiary without a grant of representation by the Court.

Recently the Court was asked to consider competing claims on the estate of a deceased Indigenous person made by his parents within the deceased’s Indigenous community.

Part 4.4 of the Succession Act 2006  enables dependents, any persons who have a just or moral claim on the intestate,a just and equitable distribution of the estate of an Indigenous person who (having lived in community) died in community, leaving dependants; persons who have a just or moral claim on the estate; or others for whom the intestate might reasonably be expected to have made provisionincluding any organisation (such as a charity, where the intestate did volunteer work or made regular donations).

Gerard Jerrard died in July 2016, aged 22 years in a motor vehicle accident. Gerard died intestate with no partner or children; therefore his estate is to be divided equally between his parents Nicole and Gerard (Snr).

The assets of the estate comprised death benefit and superannuation entitlements  associated with Gerard’s employment with Inverell Shire Council most of which cannot be accessed without a grant of administration by the Court.

Nicole and Gerard (Snr) were never married and were not in a de facto (marriage-like) relationship. They were members of an Aboriginal community with Nicole raising her son as a single parent. Gerard (Snr) had three other children. All lived as members of the Nucoorilma Clan of the Gomeroi People.

Gerard’s testamentary intentions were not known and there was no direct evidence as to why he died without making a will. Similarly there is no direct evidence whether he would, or would not, have been content to abide by the general intestacy rules, or “traditional customary lore”. However the court accepted that due to his age, social circumstances, and the unforseen manner of his death that he never addressed these questions.

Part 4.4 of the Act provides that the Court must take into account “the laws, customs, traditions and practices of the Indigenous community or group to which [the] Indigenous intestate belonged”.

Nicole argued that under “the traditional customary lore” of the Nucoorilma Clan of the Gomeroi People from Tingha, near Inverell in northern NSW the next of kin of a deceased person who dies without children, and without a spouse, is the person who has borne responsibility for, cared for, and provided for the deceased person throughout his or her life. Therefore as the mother and primary carer of her son, she is entitled to the whole of his estate to the exclusion of his father.

Gerard Snr argued that there are no relevant laws, customs, traditions and practices of the Nucoorilma Clan of the Gomeroi People bearing upon who should inherit the estate.

Nicole believed that had Gerard been required to make a will, he would have left the whole of his estate to her. As a single mother Nicole bore the burden of raising Gerard, with the benefit of help from other family members, in a cohesive Indigenous community. Equally, to that extent, Gerard Snr was relieved of the burden he would have borne had mother, father and son lived as a distinct family unit within the community.

Conversely Gerard Snr believed that if his son had been required to make a will, he would have divided his estate equally between his parents and that it would not be just or equitable to do otherwise on the making of a distribution order.

The Court held that Gerard had a relationship with his father who he respected and for the following reasons, decided against exclusion of the Gerard Snr from participation in the deceased’s estate:

  • Gerard Snr continued to give Gerard birthday and Christmas presents.
  • When in need Gerard Snr sought, and obtained, assistance from the Gerard.
  • When Gerard Snr was hospitalised Gerard, somewhat reluctantly, visited his father to pay familial respect due to a parent.
  • Gerard maintained good relations with his paternal grandmother and his paternal half siblings, thereby indirectly maintaining his connection with his father as part of the community to which everybody belonged.
  • Gerard Snr was consistently proud of his son, whose loss he continues to mourn.

Having regard to the size and nature of the deceased’s estate, traditional customary lore in the Indigenous community to which everybody belonged, the nature and strength of the personal bonds between Gerard and his parents, and their family history, the Court believed a distribution order in favour of Nicole would be just and equitable only if, a modest, but not insignificant, allowance is made in favour of Gerard Snr as a contribution to his welfare.

The Court ordered that allowance should be fixed at $40,000.

 

 

 

 

 

 

Testamentary Capacity & Mental Illness

We have posted before about Testamentary capacity & Mental Illness. A recent Victorian case revisited this test. Janet Parker died in May 2016 at the age of 61. She had previously been married twice[ she had one child Alana who had two children (Janet’s grandchildren) Rose and Frank Willis.

Janet Louise Parker completed a will without legal assistance using a ‘will kit’ in June 2010 (Will)

The requirements for a valid will are set out in the Wills Act 1997(Vic) (the Act); including that the testator sign the will or acknowledge his or her signature ‘in the presence of two or more witnesses present at the same time and that ‘at least two of the witnesses attest and sign the will in the presence of the testator but not necessarily in the presence of each other’.

Janet’s Will did not meet these requirements as it was witnessed by only one witnesstherefore it is an informal will.

Janet appointed her brother, Leonard as executor and bequeathed her estate to Alana, Rose and Frank inequal share of my total estate, the Will positively excludes certain named persons.

Len Parker agreed to renounce his appointment as executor to allow Alana to seek a grant of probate of the Will on the basis that although it was an informal will, it was her mother’s last will and reflected her testamentary intentions. Alana made application to be appointed administrator of the Will in December 2016.

The application was heard in court in September 2017. By that stage, Alana had become concerned about the validity of the will, apart from its informal execution. Janet had no contact with her grandchildren during her lifetime and had suffered from schizophrenia for many years, characterised by hallucinations and paranoia.

Alana’s own relationship with Janet was difficult as a result of her mother’s illness, although there was never a complete estrangement. Alana made enquiries of her mother’s former doctors, including her psychiatrist who suggested that Janet may not have had testamentary capacity at the time she signed the Will

Testamentary Capacity

If Janet lacked testamentary capacity, the Will cannot be admitted to probate. Janet’s estate would then be administered under the rules of intestacy, with the consequence that Alana would be entitled to the whole of her estate.

The Judge found that Janet suffered from schizophrenia characterised by paranoid beliefs that from 2005 were in relation to her ex-husband and his children, but that aside from those beliefs she was otherwise of sound mind, able to manage her affairs and make financial decisions.

In particular, I find that Janet’s delusional beliefs about her ex-husband and his children have not resulted in her making a disposition that would not otherwise have been made.

The Court accepted evidence that  Janet was able to look after her own affairs, including financial affairs, without the assistance of an administrator or guardian. Janet lived alone, and psychiatric interviews conducted in her home in August 2010 to suggest that her home showed she was coping well with daily life.

Despite her longstanding schizophrenia, Janet was divorced from her second husband five years before making the Will, without the need for a litigation guardian.[5]Further, in June 2015, five years after making the Will, she was apparently able to purchase the property she owned at the date of her death without the need for an attorney or administrator, as the transfer is signed by her alone.

The court held that the elements of the test for testamentary capacity where there is partial unsoundness of mind, as posed in Banks v Goodfellow, were satisfiedfinding that Janet that testamentary capacity when she executed the Will.

Informal Will

The Court accepted that the Will satisfied the requirements for admission to probate. In all respects, except for the presence of only one witness, the Court held that the Will would on its face meet the formal requirements for a valid will. It is in writing, there is no doubt that is signed by Janet the testatrix, and from its content shows that she intended it to be her will.

The document completed in Janet’s handwriting was a “Will Kit” containing multiple references to it being used to make a will. Including a heading ‘This is the last Will and Testament’; the directions on the reverse are headed ‘Directions for Making a Will’; the backsheet begins ‘The Will of…’; the operative part begins with the printed words ‘I revoke all former wills and codicils made by me’; the section for the appointment of an executor clearly identified her brother and contains printed words that refer to the payment of funeral and testamentary expenses and the death of the testator; the printed words ‘I GIVE devise and bequeath unto’ appear before the section that Janet has completed in relation to her beneficiaries; the signature panel refers to ‘the abovenamed Testator’ signing for her ‘last Will’.

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The Curious loss of MH370

A previous post concerned a Western Australian Court ruling regarding a passenger on Malaysian Airlines flight MH370

In March 2014 Danica Weeks drove her husband Paul to Perth International Airport where he boarded a flight to Kuala Lumpur. They were married in November 2007 and had two sons. Paul was an engineer who was travelling to a new job in Mongolia.

Paul boarded the flight to Kuala Lumpur. He had a ticket for onward legs to Beijing on Malaysia Airlines MH370 and thence to Ulaanbaatar by Mongolian Airlines. Paul sent an email to Danica from Kuala Lumpur confirming the onward trip.

Paul Boarded Malaysia Airlines flight MH370 to Beijing, the flight disappeared, and there has been no trace since of any person on board that aircraft.

Danica sought leave to swear to the death of Paul in order to apply for letters of administration. It has been reported that Paul did not have a valid Will

In this situation there is no direct evidence of Paul’s death therefore Danica cannot swear an oath to the death of the deceased. However Paul’s death may be presumed to have taken place. This presumption may arise:

“….from his having been on board a ship, which, from its non-arrival in port within a reasonable time, from the absence of tidings of any of those on board, and from other circumstances, is supposed to have been lost at sea; and similarly in the case of a missing or totally destroyed aeroplane.”

Danica swore an affidavit deposing that she and Paul were married. It attached the email from her husband confirming the onward flight. It further deposed that she identified a photo of her husband taken from CCTV footage at the Kuala Lumpur International Airport screening point adjacent to the boarding lounge for MH370.

The Court was satisfied that Paul boarded MH370 at Kuala Lumpur International Airport around midnight on 7-8 March 2014.

Although on strict analysis much of the material in the affidavit might be considered to be hearsay the disappearance of MH370 is so notorious the Court believes it has disappeared and there is now no hope of survivors. All those aboard must be presumed to be dead.

The disappearance of MH 370 has been described as “one of the biggest mysteries in modern aviation history”As of October 2017, only twenty pieces of debris believed to be from MH370 had been recovered from beaches in the western Indian Ocean.

Early this week an investigative report, prepared by a 19-member international team was released. After considering every conspiracy theory, rumour and piece of gossip on social media investigators into the disappearance of MH370 concluded the cause of the disappearance could not be determined until the wreckage and the plane’s black boxes were found.

The pilot and first officer were well-rested and not under apparent financial, emotional or psychological stresshowever some evidence that “points irresistibly to unlawful interference, such as the communications ceasing and the manual turn back” and said several times that “unlawful interference” could not be ruled out.

The investigation concluded that the plane’s disappearance wasn’t due to a mechanical or computer malfunction. A system malfunction alone couldn’t account for sudden shifts in the direction of the plane.

“The change in flight path probably resulted from manual inputs … No matter what we do, we cannot exclude the possibility of a third person or third party or unlawful interference.”

He added that they were not ruling out any possibility.

Danica Weeks said an offer to fly her to the briefing gave her too little notice for a mother-of-two with a full-time job and pets.

“Unfortunately I’m not there today. A few of us, international families, have been unable to make it in that time frame so I’m very angry about that,”

 

 

The legal cure for undelivered testamentary promises

Equitable promissory estoppel, is typically focussed on the conscience of the defendant: it operates when the defendant has induced the plaintiff of an assumption that the defendant will not assert its strict legal rights, so to prevent unconscientious insistence by the defendant on them.

We have discussed situations where a family member (A) returns home to work on the family farm alongside his or her parent (B) with the promise that he or she will inherit the farm as a result. However that promise is not entered in the will or made known to the other family members.

In order to be successful in a claim it is necessary for A the person who acted on reliance of that promise to establish

(1) that it has assumed the terms of the promise are true;

(2) that B has induced or acquiesced in A’s adoption of that assumption;

(3) that A has acted in reliance on its assumption;

(4) that B knew or intended that A would so act; and

(5) that it will be detrimental to A if the assumption is not fulfilled.

In New Zealand the Law Reform (Testamentary Promises) Act 1949, recognisesthat if there is evidence that a Will maker made a promise and then fails to fulfil that promise that they would leave them something in their Will in return for services rendered or work done by the claimant.

If a promise is made by one party to another to provide for that person in the first party’s will, as a reward for services and work done by the other party, the Court will require the party making the claim to show that the promise was made, it will assess that there is a link between the promise made and the services and work done.

The Court will also consider the services and work done to satisfy itself that those services and work qualify as services and work for which a reward is appropriate. In addition, the Court will consider whether the reward was reasonable, regard being had to the services and work performed

The promise may be verbal or written, expressed or implied. A claimant must be able to show that they provided services or performed work and that the deceased made a promise to reward the claimant for those services or work by making some provision for the claimant in their Will. If established the Court can award the claimant reasonable payment out of the estate. When determining what is a reasonable amount the Court will have regard to all the circumstances of the case including the nature of the other claims on the estate.

Gary Wendt, Neville McBeth and others acquired, restored, raced and maintained classic motorcycles.

When Gary died in a car accident he had over 15 classic motorcycles in his collection. It was Neville’s firm belief that Gary had intended those motorcycles to go to Neville and his friends following his death, in order to continue to preserve and maintain the machines.

Gary’s Will had been made many years before his death. Andrea his defacto partner was named executrix and sole beneficiary. Some time before he was killed Gary & Andrea had separated and both entered into new relationships. Neville and the other applicants were upset to learn after Gary’s death that probate had been granted to Andrea.

Neville brought a claim however in dismissing the case the Court held that the proceedings were misconceived and legally untenable as he had not established the elements to found a claim under the Act.

On appeal the New Zealand High Court was satisfied that Neville had provided considerable assistance to Gary as they pursued their shared passion for collecting, restoring and racing classic motorcycles. Neville had acquired and modified parts that were incorporated into Gary’s motorcycles as well as assisting in logistical support for racing of those motorcycles.

However under s 3 of the Act a claimant must prove there was an express or implied promise by the deceased to reward the claimant for services or work provided by the claimant by making some testamentary provision for the claimant

The Court was satisfied that Gary told Neville and others that he would be leaving his motorcycles to them. However there was insufficient evidence to establish a claim under the Act between the services that Neville provided to Gary and the expectation of receiving some of  his motorcycles following his death

“I can understand the disappointment McBeth and other friends of Mr Wendt when they learnt Wendt made no special provision in his will for the distribution of motorcycles,”

Neville told the Court the assistance that he and others gave Gary over the years had been given with no expectation of reward. Neville said he happy to help his friend who had a high profile among motorcycle enthusiasts and Gary wished to pass on his motorcycles for the purpose of preserving and maintaining them and not as a reward for services provided to him.

The High Court dismissed the appeal, ruling that Neville had not presented enough evidence of the work he had carried out on the bikes or of Gary’s promise to him.

Neville has said he will appeal this decision.

I have posted previously that Wills are documents that should be updated regularly. If a Will is not reviewed regularly then your estate may not be distributed in the way that you or your loved ones wish.

 

 

 

 

Colleen McCullough’s Will – life imitating art?

Colleen McCullough a writer of considerable fame, having written, amongst other books, The Thorn Birds died on 29 January 2015 at the age of 77 on Norfolk Island where she had lived for many years.

Colleen moved to Norfolk Island in 1983 following the success of The Thorn Birds, which has sold more than 33 million copies worldwide since it was published in 1977. It was her second novel and remains the biggest-selling book in Australian publishing history.

In The Thorn Birds the family matriarch Mary Carson, changes her will  leaving her brother Paddy nothing, and instead naming the parish priest Ralph de Bricassart executor and leaving the Catholic Church the main beneficiary .

Colleen’s only living relative was her husband Ric whom she had married in 1984. There were no children of the marriage but Ric had two children from a previous marriage.

Selwa Anthony, a long-time friend of Colleen and one of two named executors in a Will Colleen executed on 12 July 2014, the other named executor of that will, renounced probate. In this Will she bequeathed her entire estate to the University of Oklahoma Foundation Inc. Colleen had received an honorary doctorate from the University of Oklahoma and had lectured there. Selwa claimed that Coleen changed her will after finding Ric had “taken a mistress and spent all the money”.

However, Colleen signed and initialed documents in October 2014, and January 2015, with the intention to revoke the will made in July 2014.

Colleen’s solicitor testified that the October and January documents were

“part of a plan to lead Ric to believe that a valid will had been created in his favour to relieve Colleen of pressure from him”.

However the solicitor admitted, that in January 2015 she handed Ric a document which purported to be Colleen’s will, leaving her entire estate to him.

The Court accepted Colleen’s health was very poor in October 2014, but it was not so poor as to affect her mental capacity or her ability to make a will.

In January 2015, although she was seriously ill, she was able to give her solicitor instructions to prepare a power of attorney,  and on 17 January 2015 to shout at her solicitor to give the will to Ric.

The Court rejected Colleen’s solicitor’s evidence that she only did what she did, or wrote what she did, to placate Ric and protect Colleen. Cross-examination established that she did not have instructions from Colleen to pretend anything.

 

 

 

Selwa Anthony, challenged the new wills on the basis that Ric had “unduly influenced” his wife in the months before her death.

 

Ric told the Supreme Court that while their marriage had problems and with Colleen’s consent he had taken a mistress – he returned to be her carer in her final days. The Court agreed finding that Ric Robinson had not taken advantage of his wife’s poor health.

 

Further whatever the imperfections in their marriage, the tensions over financial matters, Colleen’s concerns over Ric’s spending over the years, and Ric’s affair, the situation by October 2014, and beyond, had improved from that in June 2014 and was not so acrimonious as to necessarily preclude as a possibility that Colleen would decide to reinstate Ric, her husband of more than 30 years, as the sole beneficiary of her estate.

 

The Court found that Colleen made a will in July 2014 bequeathing her entire estate to Oklahoma University, as she was fully entitled to do. By October 2014, she had changed her mind and decided to give her estate to Ric, for reasons not shown to be irrational, and more importantly, not as a result of any delusion, mental illness or incompetence again, she was fully entitled to do so.

 

The Court ordered that each party should bear their own costs.

 

 

 

 

 

 

Intestacy and Family Provision via the Contemplation of Marriage

The Succession Act 2006 (NSW) provides that marriage of a testator will revoke the testator’s Will unless it was made in contemplation of marriage.

It is common practice that a Will made in contemplation of marriage includes a statement to that effect. However courts have held that:

(a) to contemplate something does not necessarily import an intention to bring it about;

(b) the deceased need not have intended nor understood that his or her contemplation of a particular marriage would preserve his or her will from revocation if that marriage took place; and

(c) there is no requirement that a will be made because the making of the will and the proposal to marry.”

David Grant made a Will in January 2014 (“the Will”) naming his brother as executor and leaving his estate equally to his three children (2 biological sons and 1 step-son).

David was married twice. His first marriage to Lisa ended in divorce, and there was a subsequent property settlement. When David met Lisa she had two young children: Siegfried and Maximilian who subsequently changed their surname to “Grant”. Twin sons were born to David and Lisa in 1990.

At sometime prior to David’s death he and Siegfried were estranged. Maximilian was named as a beneficiary in the Will.

Katerina and David commenced an on again/off again relationship in 2006 when David was still married to Lisa. They commenced living in a de facto relationship in April 2012, following David’s final, formal separation from Lisa although they did not immediately reveal their relationship to their respective families or friends.

David and Katerina collaborated in the purchase of a property in McMahon’s Point in 2013. It was bought in David’s name but he and Katrina provided money toward the purchase  (in unequal amounts) and agreed that they would service the loan and pay all outgoings on the property, in equal proportions.

The Will was prepared for execution in late November 2013, at about the time of completion of the deceased’s purchase of the McMahon’s Point property. Instructions for the preparation of the Will were given, via email and telephone conversations between David and his solicitor, in November 2013.

In January 2014, David arranged to sign the Will in the presence of witnesses without engaging his solicitor in the process of settling its terms or attending to its execution.

David married his second wife Katerina three months before he died from brain cancer on 14 December 2015. David and Katerina had no children.

David’s estate was valued at approximately $4.4 million the majority of the estate comprised the McMahon’s Point property that he and Katerina shared. David also had a death benefit in his self-managed superannuation fund in the amount of $850,000 with no nominated beneficiary.

Katerina claimed that the Will was not made in contemplation of marriage and their marriage in September 2015 revoked the deceased’s Will dated 3 January 2014 arguing that:

David did not make a formal proposal of marriage  until June 2015;

  • at no time before then, did Katerina commit herself to marriage in advance of a proposal capable of acceptance;
  • at the time he executed his will on 3 January 2014, David did not have in contemplation marriage to Katerina, only freeing himself from his marriage to Lisa;
  • and the will was prepared in haste and, after procrastination on the part of the deceased, executed in haste as a “stop gap” will to be reviewed at leisure later at an unspecified time.

If the Court accepted this argument David would have died intestate; meaning Katerina would receive: the personal effects;a statutory legacy of around $450,000; and one half of the remainder of the estate (with the other half to be divided between David’s two biological sons).

The executor and three sons to whom David had left his estate claimed that the Will was made in contemplation of marriage so that the Court should uphold the Will as valid and they would receive their equal shares. In this situation, if the Court upheld this argument, the deceased’s second wife would not receive any benefit from the estate, as the 2014 Will did not provide for her.

Given the two very different outcomes, in addition to the claim that the Will was revoked by marriage, Katrina also made a family provision claim to be considered in the event that the Court determined that the Will was valid and she was to receive nothing from the estate.

Conversely, David’s stepson Maximilian also made his own family provision claim to be considered by the Court in the event that the Court determined that the Will was revoked by marriage, due to the fact that the stepson was not a biological child of the deceased and only biological children take a share of their parent’s estate on intestacy.

The court found that David didn’t make the Will in contemplation of his marriage to Katerina and by section 12(1) of the Act, the Will was revoked by and upon that marriage. Therefore Andrew died intestate. Pursuant to the rules of intestacy, Maximilian was left without adequate provision from the estate.  The Court ordered that family provision in the amount of $750,000 was to be paid to Maximilian from David’s superannuation fund proceeds, as the notional estate.

 

 

 

 

Who Inherits your Digital Assets

Interestingly whilst we all die – our online presence can exist indefinitely. Importantly legal verification and storage of access to our online persona continue to evolve.

Google allows you to use a setting called Inactive Account Manager which allows you to decide what happens to your data and at what time your account is to be treated as inactive – no one ever really dies they just stop using their Google account.

Facebook gives you options for what you want to happen to your account when you die — you can select an ‘inheritor’(a sort of digital executor) for your Facebook profile, to accept new friend requests, update the profile and cover photo, and write memorial messages.

Germany’s Federal Court of Justice (BGH) recently said online data should be treated the same as private diaries or letters, and pass to heirs.

The case involved parents of a 15-year-old girl killed by a train in 2012. The parents were trying to establish if she had committed suicide. As a corollary if it was suicide the train driver was entitled to compensation.

The parents had sought access to her chat messages and posts in order to find out whether she had been bullied. Facebook argued that it would compromise the privacy of the teenager’s contacts.

A court in Berlin had ruled in favour of the family, saying that the contents of the girl’s account could be seen as similar to letters and diaries, which “can be inherited regardless of their content”.

In 2017 Facebook an appeals court agreed with Facebook that any contract between the girl and the company ended with her death and could not pass on to the parents.

The BGH, agreed with the lower court expressing the view that it was common to hand over private diaries and correspondence to legal heirs after death, and there was no reason to treat digital data any differently.

As the child was a minor the court believed the parents had a right to know who their child had spoken to online. The parents have reportedly taken over the account.

We have posted before about the need to protect your online or digital assets; not just your social media accounts, but your email address(es), cloud, and online financial details; and any hardware (laptop, desktop, hard drives) protected by passwords.

Just as it is prudent (and I would suggest necessary) to have a valid and up to date Will – you should have a digital inventory setting out which details all of your relevant usernames, passwords and secret questions, to enable simple access to your personal and financial information.

In the event that you are incapacitated (this is why a power of attorney is important) your appointed Attorney can control and deal with your digital assets.

This should be stored securely – but needs to be accessible to your Attorney or Executor should they need it – and remember your executor will need it. Importantly make sure that you update this information when you change your passwords.

The advent of blockchain technologies may provide an ability to securely store and verify documents. Importantly disputes regarding digital inheritance, particularly in relation to crypto currencies can be eliminated with blockchain secured documents.