In Re Oliver (deceased) [2016] QSC 264, Mr Oliver signed a will on 11 October 2011 that had been prepared by the Public Trustee (‘Will’). The Public Trustee had managed Mr Oliver’s affairs since 1990 as he suffered from severe and chronic schizophrenia most of his adult life. In fact, he had been confined to hospital from the time he was 19 years old until his death.

As he never married or had any children, Mr Oliver’s next of kin were his four siblings. However, the Will benefited Mr Oliver’s sister to the exclusion of his three other siblings (although one brother was a substitute beneficiary). After the Public Trustee applied for probate of the Will, Mr Oliver’s brother lodged a caveat against the grant being issued. Mr Oliver’s brother sought to have the Will declared invalid and, on the basis that there were no other wills in existence, be appointed as the administrator of Mr Oliver’s estate to be administered under the rules of intestacy.

In disputing the brother’s claim, the Public Trustee argued that the Will appeared on its face to be rational and it should therefore be presumed to be valid. While the Court accepted this argument despite the fact it excluded two siblings, it ultimately found in favour of Mr Oliver’s brother since the evidence of Mr Oliver’s schizophrenia sufficiently displaced the usual presumption of validity.

Critical to the Court’s decision were the following deficiencies on the part of the solicitor who prepared the Will:

• The solicitor’s note did not reveal whether Mr Oliver named all four siblings (or just some) or explain why Mr Oliver only wanted to benefit his sister. It did not appear from the note that the solicitor investigated whether Mr Oliver was aware of those who had claims on his bounty in accordance with the requirements for testamentary capacity as outlined in Banks v Goodfellow (1870); and
• Although the solicitor procured a doctor to complete a form at the time the Will was executed that answered questions about Mr Oliver’s testamentary capacity in line with the matters outlined in Banks v Goodfellow, the doctor’s answers were not helpful or responsive nor did the doctor state what involvement they previously had with Mr Oliver.

Because of the Public Trustee’s unsatisfactory solicitor notes and medical evidence, the Court was “not actually persuaded on the balance of probabilities that the deceased had capacity at the time he made the will” and accordingly declared the Will invalid. Following from this, the Court refused to order that the Public Trustee’s costs be paid from Mr Oliver’s estate since it “came to Court propounding a will which it could not prove because of its own default in documenting, by its solicitor and by the doctor it contacted at the time of making the will.”

Interestingly, although Mr Oliver’s brother was successful in having the Will declared invalid, the Court appointed the Public Trustee as administrator rather than him since they did not think he would rationally and impartially fulfil the duties of an administrator.

If you require legal advice about the validity of will or simply need assistance in preparing a will, please contact HPL Lawyers on (02) 9905 9500.

The post Will Made by Schizophrenic Man Declared Invalid by Queensland Court appeared first on HPL Law Group Sydney.

An executor enjoys a position of great trust and power. As the person (or persons) responsible for administering a deceased person’s estate and carrying out their wishes, it is not surprising that courts hold executors to a high standard of care in fulfilling their duties and exercising their powers.  A recent decision of the New South Wales Supreme Court (‘Court’) highlights once again the duties of executors and the serious consequences should they fail to discharge these duties.

The executor’s conduct

In Parsons v Davison [2016] NSWSC 1491, the deceased appointed his brother as executor in his last will dated 2 July 1990 (‘Will’). The Will left the deceased’s estate to the Plaintiffs and the executor’s three children. The Court granted probate of the Will to the executor in March 2011.After four years had passed and administration of the estate had still not been completed, the Plaintiffs applied to the Court for the executor’s grant of probate to be revoked and for letters of administration to be granted to them in his place on the grounds that the executor had failed to promptly and properly administer the estate.

The executor’s conduct during the course of the administration included the following:

• He had not yet sold or transferred to the beneficiaries two blocks of land, some farmland and 1001 shares in a private company;
• He paid himself a commission of $46,500 from the estate without the consent of the beneficiaries, although he later repaid this to the estate;
• He had lived rent-free in one of the deceased’s properties for approximately four years;
• He claimed that he was entitled to a third interest in the deceased’s company shares; and
• He did not keep proper accounts of the estate and as a result, was unable to pass such accounts through the Supreme Court of Western Australia.

The decision

Following earlier authorities, the Court decided that the case was one that warranted the removal of the executor since “the due and proper administration of an estate has been put in jeopardy or has been prevented by reason of acts or omissions on the part of the executor…establishing that he is not a fit and proper person to carry out the duties involved in the due administration of the estate.”

Critical to the Court’s decision was the executor’s conflict of interest regarding the company shares and his failure to keep proper accounts:

“ The evidence is sufficient to establish that the defendant has a conflict of interest in relation to his holding of the 1001 shares in Moore Securities as an asset of the estate, both in respect of his expressed claim to be entitled to an interest in those shares, and also the possibility that he may have dealt with the assets of Moore Securities in an unauthorised manner. Furthermore, the performance by the defendant of his duty as executor to maintain proper accounts for the estate has been entirely unsatisfactory. It appears that the primary supervision of the execution of the deceased’s will has fallen to the Supreme Court of Western Australia. Registrar Boyle, of that court… referred to the fact that there had been four appointments in relation to the requirements to pass the accounts. At each appointment, while there had been some explanation of various estate accounting matters, the defendant had never been able to deal with all of the matters necessary to properly pass the accounts of the estate. The Registrar referred to this as being a ‘serious concern’.”

In addition to revoking the executor’s grant of probate, the Court also ordered that the executor pay the legal costs of the Plaintiffs. If that was not bad enough for the executor, the Court also ordered that he would not be entitled to have his own legal costs paid from the estate.

Implications for executors and beneficiaries of estates

This case demonstrates that Courts will step in if an executor is not performing their duties to a satisfactory standard. An executor cannot take as long as he or she wishes to administer an estate without reasonable excuse, nor can they do whatever they want. An executor also needs to ensure he or she keeps satisfactory records and accounts. Executors are under serious legal obligations.

An executor’s job can often be difficult and time-consuming. Navigating the duties and responsibilities of an executor can also be overwhelming. For this reason, lawyers can help ease the burden. The executor in this case did not appear to have any legal representation in administering the estate. Had he received professional assistance, as recommended by the Supreme Court of Western Australia, this decision may have been different.

Please contact HPL Lawyers on (02) 9905 9500 if you require assistance in administering a deceased estate.

The post Parsons v Davison: Court Removes Dilatory Executor appeared first on HPL Law Group Sydney.

1. Background

Mrs Barakett died in 2013 survived by three adult sons. Her estate consisted of a house in western Sydney and term deposits totalling just over $200,000. Mrs Barakett made a will in 1974 appointing her oldest son (‘Lou’) as executor and left her estate equally between her three sons. Lou obtained probate of that will. Subsequently, Mrs Barakett’s other son (‘Tony’) sought to propound a will made by his mother three months before her death, which had been prepared by a solicitor (‘2013 Will’). The main difference between the 2013 Will and the earlier will was a clause permitting Tony to reside in Mrs Barakett’s house as long as he wished provided he paid all outgoings. Upon the termination of the right of residence, the house was to be divided between the three sons equally.

Lou contested the validity of the 2013 Will on the basis that his mother did not have testamentary capacity (i.e. the capacity to make a will) at the time it was made and did not approve its contents due to suspicious circumstances. At the time when she made the 2013 Will, Mrs Barakett was 98 years old, bedridden and dependent on Tony as her paid carer. The solicitor who attended Mrs Barakett’s house to obtain instructions for the will was accompanied by an Arabic interpreter who turned out to have qualifications below the minimum level of competence required for professional interpreting.

While the Supreme Court of New South Wales (‘Court’) acknowledged that Tony’s arranging of the 2013 Will to be made was a suspicious circumstance, the Court ultimately decided that the 2013 Will was in fact valid because the file notes of the solicitor who took instructions from Mrs Barakett demonstrated that she was able to give cogent instructions. The Court viewed the inclusion of the right of residence in the 2013 Will was a rational assessment of Tony’s needs since he had lived with Mrs Barakett for over 20 years and was unable to work. Although the Guardianship Tribunal had found in 2008 that Mrs Barakett lacked capacity to manage her financial affairs, this did not mean that she lacked testamentary capacity.

2. Family provision application

In addition to propounding the 2013 Will, Tony applied for further provision from his mother’s estate on the basis that the right of residence and third share in the estate was not adequate provision for his proper maintenance. Tony sought an additional $125,000 and a ‘Crisp’ order that would provide alternate accommodation for him should he vacate the house for any reason.

At the time of the hearing, Tony was in receipt of the aged pension and had under $9,000 in savings, an old car and nominal household goods. In contrast, at least one of his brothers was comfortably better off than Tony (Lou did not disclose his financial circumstances). The Court summarised Tony’s circumstances as follows:

“ He has few financial resources and no earning capacity. He has not done well in life and suffers from some mild mental disability. He has no prospect of work. He is 69 years of age. His mother maintained him by providing accommodation for him. Household expenses were also paid out of his mother’s income. There is no-one else liable to support him.”

Notwithstanding Tony’s strong financial needs, the Court dismissed his claim for further provision. Although the Court admitted that the earlier will did not adequately provide for Tony’s needs, the 2013 Will did make adequate provision through the inclusion of the right of residence:

“ The provision of rent-free accommodation is a valuable benefit. I do not think that an interest that might be described as a “portable life interest” whereby Tony could require the house to be sold and the proceeds applied in providing him with alternative accommodation for his life is necessary to provide such adequate provision for his proper maintenance and advancement. If he chooses to leave, or has to leave, the Cobb Avenue property, it can then be sold and he will be entitled to one-third of the proceeds of sale…The pension is adequate for his day-to-day needs which are not extensive.”

The Court further recognised that, despite Tony having an extremely close relationship with his mother later in life, his two brothers had substantial claims on their mother’s estate arising not from financial need but from their upbringing, filial relationship and their attention to her.

3. Implications

This case shows that the Court will be reticent to award more than an equal share to adult children in modest estates even when a child has a greater financial need. The Court places strong importance on the competing claims by a deceased’s children even if they are financially better off. This decision also demonstrates that adequate (and further) provision for adult applicants may not always be pecuniary and can consist of simply allowing an adult child to reside in their parent’s house.

The post Barakett v Barakett: Dependent Adult Son Denied Further Provision from Mother’s Estate appeared first on HPL Law Group Sydney.