$9 Million Estate – But no Will

On 30 October 2015 Justice McMeekin in the Supreme Court at Rockhampton approved the creation of a Will for a 30 year old man who was involved in a near-fatal motor vehicle accident in 2005, when he was aged 20. The accident has left him with major injuries and severe permanent physical, intellectual, cognitive, behavioural and communication deficiencies.

As a result of his injuries he requires around-the-clock assistance.

The injured person was referred to in the judgment as “RW”.

These are the essential facts:-

1. RW has two children aged 13 and 10;
2. RW’s injury claim was settled for $5.2M and his settlement monies are managed by Perpetual Trustee Company Limited (“Perpetual”);
3. Although the substantial award provided for RW to have around-the-clock paid supervision and care, his parents have taken up the role of providing full-time care and quit their jobs for that purpose after RW’s accident;
4. Because there have been no payments to paid carers, the size of the settlement sum has grown to in excess of $9M;
5. Prior to the accident RW was in a de facto relationship with the mother of his two children. They did not marry. The relationship broke down shortly after the accident and RW’s de facto partner subsequently commenced a new relationship and has two further children from that relationship;
6. RW’s children’s mother has had little contact with the children since the accident and the children have been cared for by RW’s parents;
7. RW did not have a Will prior to the accident;
8. RW does not have capacity to make a Will now.

RW’s Parents’ Concerns

RW’s parents were concerned that in RW’s situation, Queensland law in relation to the distribution of intestate estates (intestacy meaning that there is no Will in existence) would allow his two children to inherit very considerable sums of money when they reached the age of eighteen.

RW’s parents applied to the Court for approval to make a Will that they had formulated on behalf of RW.

A Court approved Will is known as a Statutory Will.

RW’s parents sought a Statutory Will with the following provisions:-

1. The revoking of previous Wills and Codicils;
2. The appointment of Perpetual as an executor and trustee with two other financial advisors as sequential executors in default;
3. A gift of RW’s household contents to RW’s parents;
4. A gift of 20% of RW’s residuary estate equally to RW’s parents;
5. A gift of 5% to RW’s sister and in the event she predeceases RW then to her son; and
6. A gift of 37.5% of RW’s residuary estate to each of his two children to be held on trust for the children until they reach the age of 25.

The Law

The Succession Act 1981 (“the Act”) gives the Court jurisdiction to make Statutory Wills.

Justice McMeekin considered the provisions of section 24 of the Act to conclude that he could make the Will as proposed.  In particular, he considered the following:-

1. Whether he was satisfied that the applicant, RW’s father, was an appropriate person to apply for the making of the Will, given that the father was to share in 5% of the estate pursuant to the proposed Will, which in effect amounted to a sum in excess of $450K.Justice McMeekin found for a number of reasons that he was satisfied that it was appropriate that RW’s father make the application despite RW’s father benefitting from the WillOne reason was that it was RW’s parents who had cared for him since the accident and who will continue to care for him and raise his two children.
2. Whether all the persons with an interest in RW’s estate had been served with the Court application material and had the opportunity to make submissions to the Court as to whether the Court should approve the proposed Will or not;The issue under this head was whether RW’s former de facto partner should have been made aware of the Court proceedings with regards to the proposed Will and whether she should have had the opportunity to appear before the Court.Justice McMeekin had to consider whether RW’s former partner would be eligible to challenge his Will and seek provision from the estate in the future. Presumably, if he found that the former de facto partner had standing to challenge RW’s Will, then Justice McMeekin would require her to be served with the application material so that she could make submissions.Only a child, a dependent, or a spouse of RW is eligible to challenge RW’s Will. On the critical issue of whether the former partner was a spouse or not, Justice McMeekin confirmed that for the purposes of challenging a Will, a couple must have lived on a genuine domestic basis as a de facto couple for a continuous period of at least two years before the other partner died.Justice McMeekin accepted evidence that RW had not been living in a de facto relationship for a substantial period of time and certainly not in the last two years. As a result, he found that the former de facto partner would not qualify as a spouse entitled to challenge RW’s estate when he died and therefore she was not required be served with the Court application material and should not have the opportunity to be heard.
3. Whether RW has the testamentary capacity to make a Will himself;Based on the medical evidence that was put before him, Justice McMeekin decided that RW did not now have capacity, nor was he likely to ever have capacity again to make a Will.
4. Whether he was satisfied that the proposed Will would be a Will that RW would make if RW did have testamentary capacity;Justice McMeekin found that in benefitting RW’s parents, RW’s sister and in leaving the major proportion of his estate, namely 75%, to his children, this was the type of Will RW would have made if he had capacity to make a Will.
5. Whether there was a Will or document with testamentary intention in existence made by RW prior to his accident, despite proper searches having been conducted.

In light of the above, Justice McMeekin made the Will in terms as proposed by RW’s parents.

This case demonstrates that in appropriate circumstances, the Court will make a Will on behalf of a person who has no capacity to make their own Will, so as to avoid the operation of the intestacy rules, and what might be an inappropriate distribution of a person’s estate otherwise.

This case also demonstrates the necessity of having a Will in the first place, and we, of course, encourage our clients to see the solicitor of their choice within our firm in order to make a Will or review their existing Will. The same applies to the necessity of having an up to date Enduring Power of Attorney.