Australia: Making a will for a person lacking capacity - a statutory will

Last Updated: 11 November 2015
Article by Mark Fatharly and Ann Spencer

All adults with capacity to do so should plan their estate and make a will for distribution of their estate according to their wishes, ideally in a manner which avoids disputes, adverse tax consequences and other difficulties.

To make a valid will in Western Australia, a testator must generally:

  • be at least 18 years old;
  • sign the will in the presence of at least two witnesses, or direct another person to sign it in the testator's name in the presence of the testator and two witnesses; and
  • have the witnesses attest and subscribe the will.

But what about:

  • An adult who loses capacity later in life without having made a will, or if there is a change of circumstances which would usually justify changing their will?
  • An adult who never had capacity due to a brain injury suffered before they are 18?
  • A child who has not had capacity due to a brain injury or because they are not legally of age?

Without a valid will, a person's estate would be divided according to intestacy laws between remaining family members according to a schedule of entitlements. Often the effect of distributing an estate in that manner leads to undesirable consequences, particularly if family members are estranged.

The Supreme Court of Western Australia and equivalent Supreme Courts in other states and territories have power to make a will (called a statutory will) for a testator without capacity. At times the applications may be made urgently when someone is expected to pass away soon. There are particular matters which the Court will need to be satisfied of in these applications. Those matters will vary across jurisdictions and will often depend on the particular circumstances of the case.

In Western Australia the Supreme Court may, on application by any person, make an order authorising the making or alteration of a will in specific terms approved by the court, or the revocation of the whole or any part of a will on behalf of a person who lacks testamentary capacity. A key element of the test applied by the Court in Western Australia is whether the suggested will or alteration or revocation is one which could be made by the person concerned if the person were not lacking testamentary capacity.

Example situations where statutory wills may be made are as follows:

Adults who lose capacity later in life

An adult may suffer an acquired brain injury or dementia but live for many years. They may have no will, or a will which is out of date. There may have been significant changes in family circumstances or tax laws impacting on their estate which are not adequately addressed by their will which was made when they had capacity. If there was an acquired brain injury due to a motor vehicle or other accident, it is possible their estate could have many millions of dollars of compensation held for their benefit which falls into their estate for distribution on their death.

An example of those circumstances was the Queensland Court of Appeal decision in GAU v GAU [2014] QCA 308 in which the Court authorised a variation to a will by codicil to exclude any part of the estate going to the daughter-in-law of a lady suffering dementia who had been very protective of keeping property in the family. The son and daughter-in-law had separated since making the will. The Court of Appeal focussed on what the testator's wishes would be, concluding that it would be to protect her estate from the daughter-in-law if she had capacity herself to change her will.

In New South Wales, in the matter of W v H [2014] NSWSC 1696 there were sufficient assets available in the estate of the incapacitated gentleman that the judge approved the distribution of a substantial portion of his estate to make family provision while he was alive but on the basis that there was more than enough to meet his needs retained and there were releases by those provided for from bringing claims later against his estate. In the matter of RB [2015] NSWSC 70, a statutory will was approved for an 80 year old dementia sufferer in circumstances where, absent that will, there was a multi-party family provision dispute waiting to happen upon his death. The effect of the statutory will was to avoid those disputes.

In the Victorian case of Bailey v Richardson [2015] VSC 255, the Court exercised its discretion to make orders authorising the making of a statutory will on behalf of Ms Evans, a 90 year old woman who had lost testamentary capacity. Ms Evans had never married nor had any children and on intestacy her estate would pass to a niece, Mrs Richardson, with whom she had little contact and professed to dislike. She had never made a will. The Court authorised the making of a statutory will dividing Ms Evan's estate equally between two close friends who had brought Ms Evan's into their families, cared for her in various ways for almost a decade and were joint administrators of her estate. While Justice McMillan was not satisfied of what Ms Evans' intentions were likely to be if she had testamentary capacity, she was satisfied on the balance of probabilities that the proposed will reflected what Ms Evans' intentions might be if she had testamentary capacity. This conclusion was based on a number of circumstances including the women's lasting friendship and care for Ms Evans, statements Ms Evans had made to a lawyer that she would give money to the two friends and the fact that Ms Evans had never indicated that she would leave any money to Mrs Richardson.

In the South Australian case of In the Matter of Michelle (Mary) Maniskas [2015] SASC 77, the Court authorised the making of a will for a 93 year old woman who had lost testamentary capacity. She also had never married nor had any children and lived with her elderly brother, Con. Prior to his death, Con had instructed a lawyer to prepare "mirror" wills for himself and Mary. Con had indicated to an accountant, social worker and the siblings' lawyer that he wished for Mary to inherit his entire estate or, should she predecease him, his estate be divided equally between three charities. He died before these wills were drafted. The Court was satisfied that the proposed will, which named Mary's lawyer as executor and trustee and divided the estate equally between the Salvation Army, the National Heart Foundation and the Greek Orthodox Church, reflected what Mary's intentions would have been if she had testamentary capacity. This belief was based on Mary verbally indicating that she and Con had always intended to leave their money to charity and reacting positively when told the specific charities to which her estate would be given.

Adults who never had capacity due to a brain injury suffered before they were 18

Recipients of compensation payments for brain and other injuries can be substantial. With improved medical treatments and regular therapy, the life expectancy of a severely injured person can be lengthy. Despite not having the ability to work, the eventual estate of such a person can be substantial and their family circumstances can significantly change over time.

An example of such a circumstance is the Queensland case of RKC v JNS [2014] QSC 313. SKC suffered significant disabilities including cerebral palsy and severe mental retardation due to a difficult birth. She was awarded $1.375 million in a personal injuries action for medical negligence in relation to her birth. Should she die intestate, her parents would take her estate equally. RKC, SKC's mother, sought a statutory will that would excluded SKC's father, who had been violent towards both SKC and RKC and had no emotional or financial input into SKC's life. SKC lacked testamentary capacity from birth and had made no indication as to her intentions. The Court approved the will drafted by RKC, providing for RKC, SKC's grandmother, the cousins with whom SKC was clos, and charities such as the Cerebral Palsy League of Queensland. The Court felt that the circumstances rendered the terms of the will appropriate, noting JNS's domestic violence as an additional supporting factor.

Children

In Western Australia:

  • a child cannot make a will, even if otherwise of full mental capacity; and
  • the Court cannot make a statutory will for a child.

The position differs in other states. For example, in South Australia the Court does have the ability to make a statutory will for a person under 18. In Re W, DJ [2015] SASC 45, a 17 year old teenager with a brain injury who had received an $8.5 million settlement did not have a will. On intestacy, his father would have received a large portion of the estate despite being an absent father and acrimonious family circumstances. The court, in authorising a statutory will, focussed on the interests of the teenager, not the interests of the other family members having an interest in his estate. In another recent decision of Re G, CL [2015] SASC 80 a statutory will was made in relation to a 13 year old girl who suffered a brain injury from a pillar collapse and who had also received a substantial settlement sum for her injuries. In appropriate circumstances a statutory will could be made for a child of full capacity, particularly if a teenager is clearly able to articulate their wishes and reasons.

Future of statutory will applications

So far in Western Australia there have been only a few applications made for statutory wills but they are becoming more common in other States and Territories of Australia. While there are some differences in legislation between the States and Territories which may impact the outcome, it is clear that the use of statutory wills will be in growing demand and could be used in a range of circumstances, including where significant tax consequences or significant family disputes could flow from not adequately making a statutory will or codicil, particularly as the population grows.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Mark Fatharly
Ann Spencer
 
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