Revocation by Marriage

If you have a Will it is revoked if you marry someone after making it unless the Will was made in contemplation of that marriage.

Legislation in most jurisdictions provides that Wills made in contemplation of marriage generally or in contemplation of a particular marriage are not revoked by the marriage of the will maker.

Courts have held that the definition of contemplation of marriage depends upon the facts of the case. Importantly Courts have held that the will maker must hold the intention that the Will is to remain in effect after the marriage. Generally speaking a Will is made in contemplation of marriage if the will maker intends to propose or has marriage in mind when the Will is executed.

 In Western Australia a Will is revoked by Divorce except where the Courts find that there is evidence that the will maker didn’t intend this to occur. This provision seems harsh, as many of the provisions of a Will are not related to the spouse.

In other jurisdictions partial revocation occurs upon Divorce (and in Tasmania and the ACT these provisions include the termination of relationships other than Divorce). Where the former spouse is treated as if they had predeceased the will maker.

Importantly Divorce or annulment will not revoke the former spouse as trustee for the children of the will maker and former spouse.

In cases where a Will names no other beneficiaries apart from the former spouse the will maker is intestate upon divorce.

Voluntary Revocation of a Will

The revocation of a Will is simply the cancellation of a Will so that it no longer operates. A will can be revoked  in a number of different ways but importantly in order to revoke a will voluntarily the testator not only must act, but also have the intention, to revoke the will.

In Writing

In some instances a will can be revoked without creating a new will, for example creating a document signed by the testator in the presence of two witnesses, who witness his signature, is a properly executed intention to revoke a Will

Destroying the Will

A testator can revoke a Will by destroying it either by burning, tearing, or in some other manner, however the act must physically destroy the Will, and not simply be symbolic. The testator must show a clear intention to destroy the will as the act of destroying it is insufficient to prove revocation.

Execution of a new Will

The most common way that a Will is revoked is where a later Will is executed where that later will includes a revocation clause. Occasionally a new Will is executed without a revocation clause, however if the new Will is inconsistent with the former Will revocation to the extent of the inconsistency is implied by the Court

By Writing on or Dealing with the Will

In some jurisdictions a Will may be revoked by writing on, or dealing with the Will either by the testator or by some one else at the direction of the testator in his or her presence. In order for the Will to be revoked in this manner a Court must be satisfied that the intention of this act was to revoke the will.

Lost Wills

Where a Will is lost it is presumed that as it was last seen in the custody of the testator it has been revoked by her. In an earlier post regarding Brett Whiteley and the Kitchen Will http://heirsandsuccesses.com/2015/08/21/brett-whiteley-and-the-kitchen-will/ this presumption may be rebutted by evidence suggesting the testator could or would not have revoked the will

Mistake or Conditional Revocation

In proving that the testator intended to revoke a Will there could be either a revocation by Mistake for example where the testator destroys a Will thinking that it has already been revoked – which fails because there was no intention to revoke the Will; or a Conditional revocation where the testator revokes a Will on the basis of a condition that does not occur – for example if a Will was to be revoked on the remarriage of the testators daughter – where this does not occur the Will is not revoked.

Intestacy & the Sole Director Pt 2

Andrew Assim died suddenly on 12 March 2015 without executing a will. He was the sole director and shareholder of three proprietary companies, including Elizabeth Bay Real Estate Pty Limited. The deceased was licensed to conduct this real estate business, which managed rental properties for clients and collected rent on behalf of owners of those properties; importantly he was the sole signatory on the trust account of the real estate business.

Rent money is received monthly into the business trust account. After the deduction of the management fees the business ordinarily pays out the net rental to clients at the end of each month. The immediate problem was that there was no signatory to the trust account of the business to enable these monies to be paid out. Since the deceased’s death Mr Tayfun Demirezen, an employee of the business and a licensed real estate agent, had been managing the rent roll.

The plaintiffs, Ayleen and Elise Assim, the only daughters of Andrew Assim, urgently petitioned the Court on March 27 2015. They sought appointment as administrators of their father’s estate. His daughters were concerned that the goodwill of the business would be seriously damaged unless they were appointed administrators. As administrators the Daughters could appoint a director to Elizabeth Bay Real Estate, who could authorise a person to operate the trust account enabling monies to be paid out at the end of the month.

It is a legal requirement that the signatory to a trust account must be a licensed real estate agent. As neither of his daughters had a real estate agent’s licence they sought upon their appointment as administrators to appoint directors to the real estate business who would appoint Mr Demirezen as a signatory on the trust account and have him conduct the day-to-day affairs of the real estate business

The Court found that Ayleen and Elise Assim sufficiently demonstrated that their father died intestate, and that they should be appointed administrators. As the purpose of this proposed appointment was principally to preserve the value of the real estate business from the damage that would flow from an inability to operate the trust account, the court limited the appointment in order to achieve that objective.

Intestacy & The Sole Company Director

As has been discussed if you die without a Will distribution of your estate is made more difficult. An executor can begin to administer a deceased estate almost immediately but it takes time for letters of administration of an intestate estate to be granted by a Court. The situation is further compounded if a sole director of a company dies without a valid Will as the company does not have a person who is properly authorised to immediately take over the management of the company.

Multiple Directors

When one of the directors of a company dies the surviving directors continue to manage the company and may appoint a temporary director (pending the appointment of a new director by the company shareholders).

Sole shareholder

If a company has a sole shareholder who dies leaving a will, the directors can continue to manage the company until the shares are transferred to the beneficiaries of the estate.

Sole Director & Shareholder

If the sole director is also the sole shareholder, and dies without a valid Will it creates difficulty for the management of a company. The Corporations Act provides that, in the event of the death of a single director of a proprietary company, the executor or administrator of the deceased’s estate may appoint a new director. Therefore the company can keep running until shares are transferred to beneficiaries of the estate who may then appoint a new director.

Where there is no will a person needs to apply to the Supreme Court for letters of administration to manage the estate which may take months. In this time the company has no one who is properly authorised to act for it, and may be unable to trade. It may be difficult to operate bank accounts with the likelihood that the value of the business (an important estate asset), will be impaired. Equally if the business is to be sold for the benefit of the estate its value may erode if it cannot be sold quickly.

Aboriginal Australia & Intestacy

Indigenous Australia with a diverse spread of people from rural, urban, traditional and historical communities is not a homogenous entity. Which makes it difficult to formulate a general scheme that would be suitable to apply with regard to intestacy throughout all Indigenous communities in Australia.

Generally in Australia, the distribution of property on intestacy is based on family relationships based on lineal, bloodline relationships that have been transferred through English law and society. As such general intestacy rules may be inappropriate to members of Indigenous communities, who may have a broader concept of family relationships including to people who are not blood relations who are owed important obligations under customary law. This can apply regardless of whether the Aboriginal people live a traditional lifestyle.

Aboriginal customary law may recognise kinship without blood relationship, including adoption and by marriage. Aboriginal relationships such as mother, brother, sister and so on, may not necessarily be the same as those relationships in western society, and should be reflected in legislation and be interpreted more broadly than they would be at common law.

It has been found that it is common for Indigenous people to die intestate. There are a number of suggestions as to why this is the case, including literacy, mobility, and in some cases cultural attitudes towards death where people are unwilling to record their succession plans in a Will.

Currently a number of jurisdictions make intestacy provisions for Indigenous people. Generally speaking these fall into two categories. Firstly there are those that extend the definition of spouse under general intestacy rules to include customary marriage. Secondly, there are three jurisdictions that, depending on the circumstances, provide for a separate or additional distribution regime for Indigenous people.

In New Zealand property other than Maori freehold land devolves according to the legislated general rules of intestacy. Where the owner of any beneficial interest in Maori freehold land dies intestate, that interest devolves via rules that follow a lineal chain of title from the deceased. Interestingly if the intestate leaves a surviving spouse, generally that spouse is entitled to a life interest, or an interest until remarriage, in the intestate’s land.

Australian parliaments should be more active in promoting the benefits of Wills for all Australians. It is particularly concerning where Indigenous concepts of family in customary law often contradict the general law relating to intestacy. It is, therefore, not always appropriate, for the general law to apply without qualification in cases where an Indigenous person dies intestate.

Minister Waives States Right to Bona Vacantia

In yesterdays post I discussed the changes to the intestacy provisions regarding bona vacantia. Ian McDermott (also known as Ian Thompson) died without a Will leaving an estate, valued at about $166,000.

Ian was unmarried at the time of his death, had no children of his own and his parents and only brother has predeceased him. Under New South Wales intestacy laws the deceased’s estate passes to the State, subject to any Court orders that might be made by way of a grant of family provision relief

At some stage Ian was married but that marriage ended in divorce. His former wife made no claim against his estate, however her daughter who had lived with the deceased and her mother believing that the deceased was her natural father, made a claim. As her mother and the State of New South Wales elected not to appear in opposition to her claim the court could proceed to make a family provision order disregarding her mothers interest in the deceased’s estate.

The stepdaughter applied for and was granted letters of administration of the intestate estate, and submitted a claim for family provision showing that she had a familial claim on the estate of the deceased, and substantial need for assistance. As she was a single mother with three children, living in social housing, and dependent upon welfare for her income.

The Court agreed that the stepdaughter could take the entire estate to provide for her maintenance, education and advancement in life and that her legal costs for the Court proceedings be paid out of the estate of the deceased.

If Ian had left a Will he may have directed his estate in a different manner. As he did not make a Will it is only fair that  people like his stepdaughter have the ability to apply to the Crown Solicitor to ask the Minister to waive the State’s right to the estate in their favour; or alternatively to argue that they had a just or moral claim on the intestate estate when the alternative was that the proceeds of the estate would be paid into general revenue.

If I die Intestate does the Government get my Estate?

Bona vacantia is the Crown’s statutory right to the property of an intestate. If the legislated order for relatives has been exhausted then the State is entitled to the estate of the intestate. In modern society the reduction in the size of the average family and the higher incidence of single child families the possibility of an intestate estate passing to the state or territory is now more likely than it once was.

Currently all bona vacantia estates go to consolidated revenue, with some arguing that this benefits the general community and not some remote relative who had little or no contact with the deceased. While in some jurisdictions there are provisions recognising Aboriginal customary law, the argument that the estates be made available for charitable purposes has not been acted upon.

Legislatures have examined the various legislative schemes that directed bona vacantia estates and some have broadened who may claim under an intestate estate to cousins and made provision to allow other claimants the ability to petition the court to overturn bona vacantia

In most Australian jurisdictions there is a provision that where, where no statutory relatives are entitled, the Crown may, out of a bona vacantia estate, provide for dependents, whether kindred or not, of the intestate and any other persons for whom the intestate might reasonably have been expected to make provision.

In NSW for example the State is entitled to the whole of the intestate estate where the intestate dies leaving no person entitled to the estate. However a written application can be made to the Crown Solicitor for the waiver of the State’s rights to an intestate estate. If the application is granted the State may waive the it’s rights in whole or part to an Intestate estate in favour of:

  • dependents of the intestate, or
  • any persons who have, in the Minister’s opinion, a just or moral claim on the intestate, or
  • any person or organisation for whom the intestate might reasonably be expected to have made provision, or
  • the trustees for that person or organisation.

This may include charities or community organisations that had a sufficiently close association with the deceased to make an application for provision out of that deceased intestate’s estate.

The Estate of Jim Morrison

Jim Morrison died on July 2 1971, from a heroin overdose with an estate worth $400,000. Some years before he died, Morrison created a will leaving everything to his common law wife, Pamela Courson, and if she failed to survive Morrison by three months, then his assets would pass to his brother and sister.

After Jim Morrison died, his estate was tied up in litigation in probate court. Women came forward claiming that Morrison was the father of their children. The other members of the Doors sued the estate claiming that there were outstanding cash advances that had been paid to Morrison.

In early 1974 the court recognised Courson as Morrison’s heir.  Courson died in April 1974 without a Will therefore under intestacy law Jim Morrison’s estate comprising a quarter of the Doors future royalty income, and rights in Morrison’s image passed to her parents.

Morrison’s parents litigation for a share of the estate ended several years later in an out-of-court settlement with the Morrison’s taking half of the royalties and the Courson’s controlling the rights to manage and control Morrison’s image, music, and royalties.

In the early 1970’s, things like a persons image and personality rights were not considered particularly important, at the time intellectual property law provided that royalties from Morrison’s lyrics would have ceased in the mid 1990’s however, this has been extended by legislation until at least 2041. Today there is a growing market for products the bear a celebrities likeness.

If Pamela Courson had made a Will she could have directed her estate in a manner that reflected Jim Morrison’s wishes. As it was Mr Courson who controlled Morrison’s image, music and royalties disliked him, however he did a lot to encourage the Morrison mystique by entering into commercial arrangements to exploit his likeness. Morrison’s parents did not have a close relationship with him before he died, with Morrison claiming that his parents were dead yet received half of his royalties.

Spousal Share and Intestacy

The distribution of an intestate estate is governed by legislation therefore it is treated differently depending upon the jurisdiction where the intestate lived. A useful illustration of the differences is how the spouse of the intestate is treated in the different states and territories in Australia

Who is a Spouse?

A Spouse is defined in a similar manner across Australia as someone who is married to or in a civil union with the intestate or is an eligible partner (often referred to as a de facto partner) who has lived for 2 years continuously with the intestate.

If a Spouse survives the intestate with no children, or grand children (“issue”), or with only issue of their own they are entitled to take the whole of the intestate estate, however in some jurisdictions the spouse is entitled to the whole of the estate only if there is no surviving issue, parents, siblings, or issue of siblings of the intestate.

Multiple Spouses

If the intestate is survived by an ex spouse and a current de facto partner then depending upon the jurisdiction the division of the estate depends upon the length of the relationship between the eligible partner and the intestate. In some cases if the eligible partner has been living with the intestate for the minimum of two years and less than 5 years the estate is shared equally, however if the period has been greater than 5 years the eligible partner takes all of the estate.

Statutory Legacy

In certain circumstances each jurisdiction prescribes a statutory legacy. Depending upon the jurisdiction the amount of the estate that goes to the spouse ranges from as little as $50,000 to a maximum of $500,000. The Spouse is entitled to the prescribed amount if the intestate leaves an estate equal or greater than that amount with the balance above this amount being shared depending upon a legislated formula.

Calculating the spouses share is indicative of the complexities of the Administration of an intestate estate. The benefit of leaving a Will is that you can leave your estate in the manner that you wish and not via a legislated formula that could mean people you have little or nothing to do with could be entitled to benefit from your estate.

Without sounding like a broken record – the importance of a Will

In March 2014 a 30-year-old man died unexpectedly leaving an estate valued at around $600,000. He did not have a will and although he had separated from his wife two years prior to his death, and reached a property settlement he had not signed his divorce papers. Therefore Intestacy law mandated his estate go to his estranged wife.

The intestate and his wife were together for a relatively short time. They got married and built a house, however they had a difficult relationship that further deteriorated after they married. The wife moved out of the marital home, commenced divorce proceedings, instigated a property settlement and signed the divorce papers.

Under the terms of the property settlement approved by the Family Court the wife received $35,000 in return for transferring her interest in the matrimonial home, plus goods and chattels valued at around $15,000.

In November 2013, the wife served divorce papers, in an act of petulance the intestate refused to sign them. When asked his father believed that he refused to do so in order to inconvenience his estranged wife.

The intestate died in March 2014; notwithstanding the property settlement his estranged wife was still his spouse. Intestacy law creates an order of entitlement, and in this case because the divorce hadn’t gone through his estate goes automatically to his spouse.

The intestate had been with his new partner for 15 months. Interestingly if they had been together for 24 months intestacy law would have recognized her as a de facto partner and she would be on an equal footing with the wife.

The important message to take from this is to make sure you have a will. And if you are party to any legal proceedings, make sure you take them seriously and finalise all the paperwork as soon as possible.