Informal Wills – No Jacket Required

Most jurisdictions have requirements that must be met in order to have a formally valid will. This is an attempt to prevent fraud, undue influence, substitution or mistake from occurring due to the fact that the person who created the document is not available to be questioned when an executor is applying for probate. I had an earlier post discussing formalities http://heirsandsuccesses.com/2015/08/09/can-i-get-a-witness/

In some jurisdictions Courts can decide to admit into probate a document that does not meet the formalities required for a Will if it is satisfied that the deceased intended the document (or part of the document) to constitute, amend or revoke (whether fully or partially) their Will.

Courts have taken a broad definition of ‘document’ Including a tape recording, video recording, and recently a message created on the electronic notepad of an iphone by the deceased person being admitted as a will. However these are exceptional and usually,the court admits a written document that fails to meet the formal requirements of a Will (for example it is incorrectly witnessed).

To assist in making this decision the Court may take into account that at the time the document was created the deceased intended that it would constitute their Will including any actions or statements that were made by the deceased around the time that this document was created.

Who is a Testator?

A Testator or Testatrix is a person who makes or has made a will; or a person who has died leaving a will. If a person dies without having made a will they are said to have died intestate.

In order to make a valid will there are certain formalities that are prescribed by law. A testator must be of sound mind (have testamentary capacity) when making a will. In part to ensure that a testator is of sound mind, there are legal requirements that when the testator signs a will it is in the presence of several witnesses.

Similarly the testator must have the requisite intention to make a will, if there is no intention there can be no will. A person who is unable to understand that they are signing a document that will distribute their property following their death is said to lack the testamentary capacity to create a will.

A testator also should be making the will without duress and free of coercion from other persons. If this is not the case, a court may later void all or part of the will.

Video and the Testator

Wai Fun CHAN, an 85-year-old woman with eight children living throughout the world, died with property in NSW and overseas on 27 June 2012, leaving a formal will dated 6 March 2012.

After the formal will was prepared and executed she was dissatisfied with it and as she was unable to return to her solicitor for the preparation of a written codicil made a short oral statement on a DVD recording on 8 March 2012 in the presence of one of her children and that child’s spouse. The testatrix commenced her statement by recording the date it was made and stated she was “of a clear and sound mind” followed by a series of short, considered, statements.

Although she was warned that a video recording might not meet the legal requirements for a formal will. She wished to speak to her children granting each of them a legacy over and above any provision made for them in her formal will.

The application for a grant of probate by the executors of the formal will, together with the video will as a codicil was accompanied by a certified transcription of the video will in the original Chinese, and an English translation of that transcription.

The Court found that the video will does not comply with section 6 of the Succession Act 2006 NSW (“the Act”) because it is not “in writing and signed” by the will maker nor “signed” by any attesting witness. The Court found that the DVD is a “document” and was satisfied that the will maker “intended it to form an alteration to… her will” satisfying the requirements of the section 8 of the Act.

Howard Hughes & the Mormon Will

Howard Hughes the billionaire aviator, industrialist and filmmaker died in April 5 1976, at the age of 70, without a will. Hughes’ assets were governed by the Summa Corporation, and were valued at more than $2 billion. At the time of his death no one was certain if Hughes had left a will, and as he resided in several cities probate was opened in Houston, Las Vegas, and Los Angeles.

Summa conducted an extensive search, but failed to discover a valid will. However an unsigned carbon copy of a 1954 will was presented to a probate court as the best available evidence of Hughes’ intentions. Summa argued that although a written will could not be found, Hughes’ wished to leave his whole fortune to the Howard Hughes Medical Institute in Florida.

Some days after Hughes’ death Spencer W. Kimball, president of the Mormon Church received a letter enclosing a an unwitnessed document dated March 19, 1968 and signed Howard R. Hughes. This document immediately raised suspicions because it was totally out of character for the increasingly neurotic Hughes to sign any document. However there was conjecture among a number of handwriting experts as to whether the document was in Hughes’ handwriting.

This document known as the Mormon will named a number of beneficiaries including Melvin Dummar. Dummar claimed that he picked up the hitchhiking Hughes in 1968, loaned him a quarter, and dropped him off, although Dummar later admitted that his story was false.

In a further complication Hughes had three maternal second cousins who under Texas intestacy law would inherit if there was no valid will. Twenty-three of Hughes’ maternal and paternal relatives combined to fight Summa. In June 1978, after a seven-month trial, a jury decided that Hughes did not author the Mormon will. As no valid will was discovered, the court awarded the Hughes estate to the billionaire’s surviving relatives appointing one of them to administer the estate.

The legal battle over the Hughes estate was not settled for 34 years. If Hughes had completed a will the expense and rancor that followed his death may have been avoided.

Will makers Testamentary Capacity

A person making a Will must have testamentary capacity at the time that it is made (or at the time that the instructions are given) in order for the will to be valid. The test for establishing whether a testator has mental capacity to write a Will was established in Banks v Goodfellow.

John Banks, the Will maker had been confined to an asylum for some years.  After discharge, he continued to suffer from delusions; notably, he was of the belief that a man called Featherstone Alexander was persecuting him.

Banks prepared a Will leaving his estate to his niece, Margaret Goodfellow.  Margaret died intestate, two years after Banks and her estate passed to her half-brother, who was not related to the Will maker.

John Banks junior, the son of the Will maker’s half-brother, then contested the will.  He argued that Banks senior did not have testamentary capacity. The Court found that Banks’s will was valid, and although he suffered from mental illness which caused delusions it did not influence his decision regarding who should benefit from his estate.

Under the Banks v Goodfellow test, the Will maker must:

  • understand the nature and effect of a will
  • understand the nature and extent of their property
  • comprehend and appreciate who has a reasonable claim on their estate
  • be suffering from no disorder of the mind or insane delusion that would result in a gift that would not have been made under normal circumstances

It is important to note that it is a low threshold test, as it is the belief of Courts and Governments that a person’s right to make a will should be upheld whenever possible. This is reflected in the idea that there may be a ‘lucid interval’ where a person suffering from a mental illness may have will-making capacity.

Ruling from the Grave part 2

In last Fridays post we discussed a Court overturning a Will makers wishes under Family provision legislation. However, as a general rule, Courts are reluctant to deny a person’s testamentary wishes.

Patrick Carroll (“Mr. Carroll”) died on 16 April 2012. He made his will on 15 December 2011 (the “Will”). His children are Jehovah’s Witnesses, and he did not approve of their adherence to that faith. In his will made on 15 December 2001 Mr. Carroll made the gifts conditional upon them attending his funeral (the “Attendance Condition”) and, becoming a Roman Catholic within three months of his death (the “Baptism Condition”). Each of the Children attended his funeral. None of them has become a Roman Catholic.

The Children were the product of a “mixed marriage” between Mr. Carroll who was a Catholic and his ex wife Lillian who was Anglican. His oldest child Anthony was baptized as an Anglican but Mr. Carroll did not raise his children as Catholic, they did not attend Mass, and were not enrolled in Catholic schools.

Mr. Carroll and his wife separated in 1959. The Children continued to live with their mother. Around the time of the separation, Lillian became a Jehovah’s Witness. The children were all subsequently baptised as Jehovah’s Witnesses and continue to remain active members of their congregation. Apart from Anthony there is no evidence that any of the Children had undergone any form of baptism prior to becoming Jehovah’s Witnesses. Mr. Carroll was very unhappy with Lillian and the Children becoming Jehovah’s Witnesses.

Each of the Children attended Mr. Carroll’s funeral, however none of the Children has become baptised into the Catholic Church, either prior to the expiration of three months after Mr. Carroll’s death or since that date.

A Court will try to uphold conditions in the Will except where they are uncertain or impossible to satisfy, are contrary to public policy, or both. The Children argued that these conditions, particularly the Baptism Condition, were uncertain, impossible or contrary to public policy. The New South Wales Supreme Court concluded that the requirement for each of them to become a Roman Catholic is a condition precedent (where an event must occur before a beneficiary can receive a gift)  which is not void for uncertainty, impossible or contrary to public policy.

None of the Children became a Roman Catholic within three months of Mr. Carroll’s death; therefore their respective shares in his estate shall be divided among the other beneficiaries in accordance with the terms of the Will.

Can I get a Witness

A Witness is a person who observes the signing of a Will at the time and place that it occurs and affirms this by signing the document.

 Who can be a witness

A witness must be able to form the intention “to attest and subscribe a will”, this means they have to be able to place their signature or other sufficient identifying mark representing their name on the will with the intention of attesting that the testator has signed the will in the presence of the Witness. The names and addresses of witnesses should be recorded on the Will.

Beneficiaries as Witnesses

In most jurisdictions a witness or a person married to a witness may not be a beneficiary under the will. In jurisdictions that have abolished this rule in order that doubts the Will was witnessed correctly are minimised a good rule of thumb is that a beneficiary not be a witness to a will.

The follow the following steps should be taken when the Will is being witnessed.

  1. The Will maker must be in the same room at the same time as both witnesses throughout the witnessing process.
  2. Neither witness, or the spouse or partner of a witness should be a beneficiary of the will
  3. The Will maker and both witnesses must use the same pen to sign and witness the will. It should be a blue pen.
  4. The date that the Will was signed and Witnessed must be inserted in the space provided.
  5. All pages in the Will must be numbered and in the correct order.
  6. The will maker should state in front of both Witnesses that they have read the will and agree with what it says
  7. The Will maker should sign above the word Testator (if male) or Testatrix (if female) on the base of each page and the end of the will using the same pen and in the presence of both witnesses.
  8. Then using the same pen the first witness in the presence of the will maker and another witness signs below the attestation clause. The witness then adds his or her name occupation and address. The second witness then signs alongside the signature of the first witness in the presence of the will maker and the first witness, and the second witness then adds their name occupation and address.
  9. Two copies of the will should be made.

Ruling From the Grave

In most jurisdictions there is legislation allowing certain relatives to take action against the estate in the event that they feel the Will has not left them with adequate provision for their maintenance, support, education, or advancement in life. In finding what is adequate the Court looks at the circumstances of the case including the size of the estate, the nature of the relationship between the claimant and the deceased, and the claimant’s present circumstances.

Michael Wright  left a large estate when he died on 26 April 2012 aged 74. He was survived by his current wife, two earlier wives and by three adult children from an earlier marriage. Olivia Mead was born on 3 September 1995  as the result of a brief relationship that the deceased had with Elizabeth Anne Mead. Olivia was provided for in her Father’s Will by the establishment of a $3 Million dollar trust (“the Trust”) which Olivia would receive at age 30, as long as she met the conditions of the trust.

Recently the Western Australia Supreme Court accepted her claim that she had been left without adequate provision for her “maintenance, support, education or advancement in life” granting her $25 million as long as she does not make any further claims on her Faather’s estate.

The Court held that Michael Wright’s estate was “colossal” and may be in excess of $1 billion. In fact the other beneficiaries acknowledged that what they receive under the Will is so significant that any award to Olivia will make little difference to their position. In the view of the Court an award of $25 million would not fall outside the “reasonable expectation of most members of the community.”

The Court found the construction of the Trust troubling as Olivia was at the mercy of the trustee. The trustee in its sole discretion could decide to retain all of the earnings in the Trust until she turned 30. If Olivia wished to buy a house for example and sought money for that purpose the trustee would be within its rights to refuse. Similarly the Trust will only provide money for the purposes of education until Olivia was 23 years of age.

The Court held it was arguable that based on the construction of the Trust  a minor conviction or involvement with someone who used drugs could exclude Olivia as a beneficiary. Similarly the clause restricting her freedom of religion was thought by the Court to be “extraordinary” as she could be excluded as a beneficiary if she were to convert, take a deep interest in, or  associate with people who practiced a non-Christian faith.

A Will enables you to direct your estate as you see fit however it does not give you the unfettered ability to rule from the grave by providing conditional gifts (e.g. requiring religious conversion) or trust arrangements that may be construed by a Court as uncertain or impossible to satisfy.

What does an executor do?

An executor is the person appointed in a Will to execute, manage, administer, direct, and dispose of his or her estate. Depending on the complexity of the estate an executor may wish to engage an expert with experience in the legal tax and accounting requirements.

Many people when nominated as an executor are unsure of what is expected of them. An executor usually;

  • assists in making funeral arrangements,
  • locates the Will and applies for probate,
  • determines who are the beneficiaries,
  • collects the assets,
  • settles debts,
  • distributes assets according to the Will,
  • prepares and manages accounts and tax returns.

In some cases an executor may have to defend the estate against litigation.

If you want to appoint an executor that you believe is capable and interested as acting as executor who is not a beneficiary of the estate (usually a friend or relative) you should discuss this with them prior to the Will being made.

Who is an Executor

The simple answer is that the executor is the person named in your will to administer your estate after you die. The executor is responsible for managing the estate, protecting its assets, and carrying out your wishes.

You can name as many executors in your will as you like, sometimes people name a solicitor as an executor, but this isn’t necessary. It should be noted that the executor can be held personally responsible for mistakes made in the administration of an estate and may consult as many experts as they believe is necessary.

The duty of the executor is to complete the administration of the estate so that the creditors can be paid and the remaining assets handed over to beneficiaries as soon as reasonably possible, whilst complying with the laws of the state that govern the administration of deceased estates.

In most cases the person appointed as an executor is beneficiary under the will. In certain circumstances there could be good reasons to appoint  an executor who is not a beneficiary under the Will, either a friend or relative, or if the estate is large and/or complex a professional executor (who normally takes a percentage of the value of the estate.)