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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