Sonny Bono – Intestacy

Sonny Bono, died following a ski accident in which he hit a tree in 1998 at age 62 without leaving a Will. Bono had three ex wives, four children, several business interests, and an estate estimated at $1 million.

Bono was successful in various careers in entertainment, as a restaurateur and a politician. He was mayor of Palm Springs, and later the United States Congress. In congress he was a respected lawmaker who helped pass legislation to protect the environment and championed changes to copyright law. So you think that he would have no excuse not to make a Will.

As a resident of California, and because Bono died intestate under State law all of his children were entitled to a portion of the estate even though he had a surviving spouse. After he died his estate was placed into the California probate process with his wife at the time of his death, Mary, named as the executor of his estate.

Additionally, former spouse Cher also filed as a claimant against the estate alleging she was owed back alimony payments. His illegitimate son also made a claim against the estate, however DNA testing ruled out Bono’s paternity of this claimant.

The estate was in a complicated and expensive probate process while the various claims were addressed.  Bono could have saved his loved ones the grief, stress and conflict, (not to mention the expense) of defending these claims by planning for his future and making a Will.

What is a Codicil?

A codicil is a supplementary document that amends a previously executed Will. (Execution of a Will is when it is formally witnessed) The Will maker executes the codicil with the intention of adding to, altering, revoking explaining or confirming a Will, provision or part of a Will. As a subsidiary testamentary instrument, a codicil must be executed with the same formalities as a Will and becomes part of the will and must be proved with the Will as part of probate.

If your intentions have changed it may be prudent to have a new Will drafted. As a Codicil could make a small or large addition to or revocation of large parts of the Will, and in some instances can completely change the gifts under the Will.

A codicil is a document that makes reference to the original Will, describes the required change and is then signed and witnessed in exactly the same way as a full Last Will and Testament. A codicil confirming a will may have the effect of republishing the will or reviving an earlier revoked will. For example a codicil attached to the Will of a divorced testator could inadvertently confirm the provisions in favour of a former spouse.

In reality a codicil is an anachronism that arose at a time where legal stationers were employed to handwrite legal documents, including leases, wills and marriage settlements. Thanks to word processing software a new Will can be easily prepared and is preferable to a codicil.

A new Will is preferable for several reasons notwithstanding ascertaining that the Will referred to in the codicil is the latest unrevoked Will of the testator and still represents their wishes the person drafting the codicil must ensure the technical requirements as to the consistency of the language used in the codicil and the original Will crucially the date of the Will given in the codicil.

There may be reasons for a Codicil if the Will is complex, or the testator is very ill, a codicil may be appropriate if the alteration is straightforward. However, if your testamentary intentions have changed it is best to have a new Will made to avoid the complications that a codicil can bring.

Charitable trusts don’t have to treat everyone charitably

We have discussed ruling from the grave and the issues that it can cause. Recently the Trustees of a charitable trust approached the Supreme Court of New South Wales seeking advice.

Martin Sharp a well known, and significant, Australian artist with a substantial body of work died on 1 December 2013.

Sharp made a will in September 2012 that was amended by a codicil made in November 2013. Probate of the Will was granted in August 2014.

Sharp an only child, did not marry, and had no children. He grew up in and lived for the majority of his life and later owned the family home in Bellevue Hill known as “Wirian”.

Wirian is the major asset of Sharp’s estate. In 2008 Wirian was valued at of $8 million with the total estate valued at $11.25 million. Sharp’s Will provided that the whole of his estate, after payment of debts and expenses, was to be held in a trust known as the “Street of Dreams Martin Sharp Trust”(“the Trust”).

Wirian was a neighbouring property to the private school Cranbrook. Sharp wrote in his Will that he had developed an unfortunate and antagonistic relationship with the School. Sharp’s Will directed that his trustees not deal with or favour that School in the administration of the Trust established under this Will, and that as he never consented to its use requested that the school stop using his name in the Martin Sharp art prize.

The Executors of the estate sought clarification that the Will established, a valid charitable trust. Whether, the Executors may sell Wirian for the purpose of furtherance of the Trust; or appoint a substitute corporate trustee to administer the Trust

The Attorney General of New South Wales in her role as protector of charities was the first defendant. Sharp’s next of kin at the date of his death nor her power of attorney wished to be represented in the proceedings unless the court determined that the “will fails”.

The Court found that the Will established a valid charitable trust for the purpose of (among other things) the advancement of arts education; the preservation of ‘Wirian’ for carrying on Sharp’s works and projects and; the advancement of Sharp’s work on Luna Park and Tiny Tim.

The Court held that prior to the establishment of the Trust, the executors and trustees named in the Will have the power to sell ‘Wirian’ if it is not possible or practical to retain the property; and on the establishment of the Trust, the trustees have no power to sell ‘Wirian’. Similarly there is no limitation in the Will on who may be a trustee of the Trust and thus no reason why the trustee could not be a corporation.

The Court directed the estate pay the costs for the hearing.

Mutual Wills – what are they?

Mutual Wills arise where two (or more) people make an agreement as to the disposal of their property through Wills and each has, in accordance with the agreement, executed a Will.

Mutual Wills are often made between husband and wife, in second or later marriages and where there are children from earlier relationships. They provide a mechanism for protecting the property brought into a marriage usually for the benefit of children of prior relationships — while allowing the survivor enjoyment of the property during their lifetime.

The object of Mutual Wills gives the survivor enjoyment of the property, but preserves assets for the children of the prior relationship, rather than have the property go to other relatives of the survivor.

The doctrine of ‘Mutual Wills’ dates back to the late 18th century, the case involved two people making promises about their wills to ensure that their family would benefit in a particular way after each of their respective deaths. The enforcement of the promises through the medium of a constructive trust lay at the heart of the doctrine.

The doctrine is based upon the mutuality of obligations; each testator making provisions by will in return for provisions made by the other(s). The obligation on the survivor to the mutual wills agreement was specifically enforceable. Therefore, when one person dies without having revoked her will (that is, she had performed her part of the contract), the other party is bound to give effect to their agreement.

Mutual Wills are not that common, and the binding nature of the arrangement means that the survivor loses the power to gift their property freely both during their lifetime and by Will.

In a leading case on Mutual Wills in Australia the wife had inherited property under the Will of an uncle. The husband had no property. Instead of leaving a life estate to the husband and then leaving the remainder to certain relatives, an agreement was made between the husband and the wife that she would leave the bulk of the estate to her husband, with him promising to make a Will leaving his property to those relatives and that he would not alter that Will. Wills in the agreed terms were made; the wife died; the husband subsequently made a different will under which the wife’s relatives interest was much smaller  than under the will made in accordance with the agreement. The Court decided that as the wife had died without revoking her will, then the husband was bound after her death not to revoke his Will at all. The obligation on the survivor to the mutual Wills agreement was specifically enforceable by the relatives.

Survivorship – no they didn’t sing eye of the tiger!

We have discussed the administration of a deceased estate where the assets were fully owned by the deceased alone and pass according to their Will.

Where an asset is held by two or more people under joint tenancy it is passed via the right of survivorship, this means that on the death of one of the owners their share automatically passes to the surviving owner or owners without having to wait for probate.

Assets that are held in joint tenancy include, (but are not limited to) property, bank accounts, and shares. A joint tenants interest in the asset cannot be gifted in a will unless the other joint tenant has already died.

A joint tenancy is created at the time the asset is purchased with each owner having the same rights and responsibilities relating to the asset – it is the unified nature of a joint tenancy that enables the ‘right of survivorship’.

Essentially when one joint tenant dies their interest ceases and the remaining joint tenants share expands by the value of that interest. When there is one survivor the joint tenancy has ended and the survivor becomes the full owner of the whole property

If there is not the unity of title, time and interest the co-ownership is a tenancy-in-common. Tenants in Common are able to gift their share of the asset to who ever they choose. If there is a will, according to the will, the estate is administered according to a formula set out in legislation.

Although Joint Tenants property interests do not form part of their estate if they are survived by other joint tenants it is vital that you plan for the future that recognises your wishes. After all you may be in a position where you are the sole survivor of a joint tenancy and wish to direct the property but this is not possible if you do not make a will.

Dying Intestate is like kicking a Hornets nest

Stieg Larsson who wrote the novel The Girl with the Dragon Tattoo; died in 2004 (before the novel was published) without a Will. Larsson &  Eva Gabrielsson, his companion of 32 years, and collaborator had never married. Swedish intestacy law did not recognize the relationship therefore Gabrielsson did not inherit the rights to his work or any part of his estate. Larsson’s estate including the literary estate was divided between his father, and brother.

One reason given for Gabrielsson and Larsson not marrying was security reasons. Larsson was a reporter who covered extremist groups and received multiple death threats. Under Swedish marriage law, at the time of marriage couples are required to publish their addresses therefore marrying would have been a security risk.

A literary executor manages the authors copyright, decides the territories where books are sold, and who translates the books and manages the film rights.

Gabrielsson requested the rights to control Larsson’s work so it would be presented in the way he wanted claiming. Gabrielsson claimed the Larsson was estranged from  his father who was more like a distant relative and Larsson wasn’t aware that his brother was married or had children and  none of his work colleagues knew that Larsson had a brother.

The family argued that if Larsson had wanted Gabrielsson to inherit anything, he would have written an appropriate Will. Soon after Larsson’s death Gabrielsson found an unwitnessed 1977 Will, that left his estate to a branch of the Communist Workers League. As it was unwitnessed it was not valid under Swedish law.

Following a protracted dispute over the estate a settlement was reached giving Gabrielsson title to the home she shared with Larsson but nothing else.

The only way that you can direct your assets after you die is if you create a valid will. Intestacy law directs your estate but not necessarily in a way that would reflect your wishes. You shouldn’t leave your family to deal with managing your intestate estate – that could include protracted legal disputes. Making a will is an important part of planning for your future  giving you and your loved ones peace of mind.

Advance Care Directives in practice

Mr A (“A”) was a patient admitted to the emergency department of a hospital, suffering from septic shock and respiratory failure. Although all appropriate treatment had been given to A, his condition deteriorated, he developed renal failure and was being kept alive by mechanical ventilation and kidney dialysis.

At this stage the hospital became aware that a year before his admission A, had a solicitor prepare an appointment of enduring guardianship directing his guardians to

“refuse consent for a TRANSFUSION of whole blood, red cells, white cells, platelets, or blood plasma to be given to me under any circumstances”

On a separate worksheet completed in his handwriting A indicated that he did not wish to have dialysis. A’s solicitor told the Court that when he prepared the document he explained the risks of refusing a blood transfusion to A but not the risk of refusing dialysis.

The hospital sought a Court declarations to the effect that the document was a valid “Advance Care Directive” and that it would be justified in complying with his wishes expressed in that directive. The Court considered that in making the decision to refuse dialysis A had legal capacity and it was clearly his own voluntary decision, therefore the hospital could not administer dialysis to A.

Mr A was unconscious and unable to give instructions as to his medical care therefore the hospital took steps to preserve his life whilst seeking the Court’s decision. The Court made orders recognising A’s right to refuse dialysis treatment as set out in the worksheet even though medical evidence suggested it would hasten A’s death.

If A had not completed the Advance Care Directive it would have been difficult for the hospital to follow A’s wishes. An Advance care directive is an important part of planning for your future and should be discussed with your loved ones at the time it is prepared.

Living WIlls – what are they?

An “Advance Care Directive” (also referred to as a Living Will) is a document stating the specific medical treatment that the patient does or does not wish to receive. In order to make an Advance Care Directive a person must have legal capacity, and the document must set out the medical treatment that they want to receive  in a clear and unambiguous way

All jurisdictions in Australia have enacted legislation enabling a person to register a refusal to accept medical treatment or appoint another person to carry out their wishes.

Advance Care Directives enable you to set out the medical care you wish to receive when medical technology might be required to keep you alive. Importantly as you may lack the capacity to make decisions about your medical treatment the person or persons you appoint as substitute decision-makers, family members and significant others must be informed of your medical wishes.

In the absence of an advance care directive consent for medical treatment must be considered on a case by case basis and may be given by:

the patient if they have legal capacity;

the patient’s guardian;

the spouse of the patient (if they have capacity),

by the patient’s carer;

or by a close friend or relative of the patient.

A persons capacity to make health care decisions, must be carefully considered as what appears to be valid consent given by a capable adult may be the result of undue influence, or of some other circumstance.

As consent for treatment is considered on a case-by-case basis if an unconscious patient presents at a hospital, and it is not practicable to obtain the consent of the next of Kin, or there is no record that the patient does not wish the treatment to be carried out they may be administered emergency medical treatment that is reasonably necessary.

In most circumstances it would be assault to administer medical treatment prohibited by the advance care directive.

In order to create an Advance Care Directive a person needs to carefully consider their wishes, and preferences for future health care, end of life, and the appointment one or more Substitute Decision-Makers to make these decisions if you are unable to do so yourself.

Khloe Kardashian, health care proxy for Lamar Odom?

In September 2009, Lamar Odom married Khloé Kardashian. As is usual with the Kardashian family their wedding was featured on Keeping Up with the Kardashians, a reality show featuring members of the Kardashian family. During the course of their marriage Odom also featured on the show and a spin off program. He became a household name to those unfamiliar with his basketball career.

In December 2012, Kardashian filed for divorce from Odom, both parties signed papers in July 2015 pending final approval from a judge. On October 13, 2015, Odom was hospitalized after being discovered unconscious. He was in a coma and placed on life support. It was reported that Kardashian was making the healthcare decisions on his behalf. In the aftermath of this accident, Odom and Kardashian have decided to call off their divorce.

In the US a wife is the most common person named as a health care proxy to make health care decisions for their spouse in the event that they can no longer make those decisions themselves. If Odom did not change his health care proxy, or the power was drafted so that it did not terminate at the time the divorce papers were filed Kardashian may retain the power, to make any decisions about his care whilst he is unconscious or lacks the capacity to make them himself.

In Australia each State and Territory has provision for people to create an Advance Care Directive (ACD) also referred to as a living will. An Advance Care Directive is a written document enabling a competent adult to nominate the equivalent of a health care proxy, to record preferences for future health and personal care, or both.

In Odoms case athough the divorce hadn’t been approved by the Courts it raises questions regarding an ex spouses right to their ex-spouses estate in the event of their death.

In California, once divorce proceedings are filed the parties are restrained from taking actions during the divorce proceeding altering the designation of beneficiaries and other specified actions therefore their estate passes according to their Will. If a party dies after the dissolution of the marriage transfers to the ex spouse are terminated but not life insurance. It was reported that Kardashian remains the beneficiary of a $10 million life insurance policy in Odom’s name even after their divorce is finalized.

In most jurisdictions in Australia, certain provisions contained in the Will  are revoked by the divorce or annulment of the marriage, and legislation treats the spouse as if they predeceased the Will maker. However in Tasmania and Western Australia the entire Will is revoked by divorce.

The best way to ensure your estate is directed the way that you wish it to be after a divorce is to make a new will. In the same way as marriage and the birth of a child, a relationship break down is a life event that calls for a new Will in order that your estate is directed the way that you wish in the event that you die.

Pride & Prejudice & Entailed land

An entail or “fee tail” operates like a will that sets up a primogeniture system for real estate. Entail restricts the sale or inheritance of an estate and prevents the property from being sold, or left by will, to anyone other than a pre-determined heir. The primogeniture system, meant the eldest son inherits the title, even if he had an older sister. Daughters couldn’t inherit their father’s title even if they had no brothers, and daughters’ sons and grandsons couldn’t inherit. The title had to pass to and through legitimate sons.  Although a work of fiction Pride and Prejudice illustrates the problems that can arise through the entailing of property if there is no male heir.

Entailing property was an attempt to maintain the high social status of a family. A lord or other landholder left his house and land to his son “and the male heirs of his body”, ensuring that a single male descendant received the family’s real estate. Where the family has a noble title, the entail follows the title, so the same man gets the real estate and the title.

In Pride and Prejudice Mr. Bennet, the father of protagonist Elizabeth Bennet, had only a life interest in Longbourn, the family’s home and principal source of income. As the property was entailed Mr Bennet had no power to sell it or gift it through his will as it was to be inherited by the next male heir.

If Mr. & Mrs Bennet had a son Longbourn would have passed to him, but it could not pass to any of his five daughters. Instead, Mr Bennet’s cousin Mr Collins as the next nearest male heir would inherit the property. Upon Mr Bennet’s death Mrs Bennet would get a life interest in the estate but the five Bennet daughters, would lose their home and income. In the novel Mrs Bennet is motivated by the desire to arrange a good marriage for each of her daughters to ensure their financial security.

Jane Austen’s brother Edward, had inherited entailed estates from Thomas and Catherine Knight, distant cousins of their father under the will of Elizabeth Knight, who died in 1737. When Thomas Knight died in 1794 he left the estate to his wife for her life, who subsequently moved away before her death and gave up the estates to Edward. Catherine Knight’s will stipulated that Edward change his legal name to Knight which he did in 1812.

In the UK fee tail was abolished in 1925, however some land could still be entailed if they were created under a Will made prior to this date, however as of 1996 no new fee tails can be created.