COVID-19 has significantly changed the way we do ordinary tasks. With the increasing restrictions on travel, leaving the home and gatherings, tasks we used to do everyday with ease have become more difficult. This is even more so when it comes to making your Will.
Generally speaking, a Will needs to be signed by the testator in the presence of two adult witnesses who are not named in the Will. As gatherings of two or more people are banned, this makes executing a will seem impossible.
Imagine the following scenario:
(1)prior to the outbreak of COVID-19, you had instructed your
solicitor to draft your Will;
(2)you approve your draft will and have made an appointment to see
your solicitor to execute your Will;
(3)after making the appointment but before the appointment date,
the government restricts travel and gatherings of more than two
people; and
(4)before the government restrictions are lifted, you fall
terminally ill and lose testamentary capacity.
While it is true that a person who lacks testamentary capacity cannot make a Will, this does not mean it is impossible for them to have a Will after they lose testamentary capacity.
Section 18 of the Succession Act 2006 (NSW) (Act) empowers the Supreme Court (Court) to authorise a Will in terms approved by the Court to be made on behalf of a person who lacks testamentary capacity. This is known as a statutory will and can be used in situations where a person was in the process of having their Will drafted and executed but loses capacity before they can execute the Will.
Requirements for a statutory will
The requirements of a statutory will are as follows:
- the person in respect of whom the statutory Will is to be made (Testator) must be alive. That is, a statutory will cannot be made in respect of a deceased person;
- the Court must grant leave to a person making an application for a statutory Will. Although a hearing for leave may be treated as a hearing for an application for a statutory Will;
- there is a reason to believe that the Testator is, or is reasonably likely to be, incapable of making a Will;
- the proposed will is, or is reasonably likely to be, one that would have been made by the Testator if they had testamentary capacity;
- that it would be appropriate for the Court to make an order authorising a statutory Will;
- the applicant for leave is the appropriate person to make the application; and
- adequate steps have been taken to allow representation, as appropriate, of persons with a legitimate interest in the application, including those who would reasonably expect to benefit from the Testator's estate. This means that all potential beneficiaries should be notified of the application and the Testator should also be represented by a tutor.
Small v Phillips (No 2) [2019] NSWCA 268
Small v Phillips (No 2) [2019] NSWCA 268 illustrates when a statutory Will may be made.
Millie Phillips (Millie) is a wealthy woman who lost testamentary capacity after suffering a stroke in April 2018. It was estimated that her estate would be worth approximately $90 million, though this was subject to some uncertainty.
Millie's grandson brought the application at first instance and on appeal.
A brief history is as follows:
- Millie had made at least two Wills, one in 1972 and one in 2001;
- Millie constantly acted as if she did not have a Will;
- from November 2015 to April 2017, Millie had a number of conversations with her usual solicitor;
- in 2017, Millie consulted with various advisors to prepare a new Will. This resulted in a Draft Will (Draft Will);
- on numerous occasions, Millie expressed that she did not agree with the contents of the Draft Will; and
- in October 2017, Millie instructed her usual solicitor to prepare her Will.
The Court of Appeal considered the reasonable likelihood of Millie making the Draft Will and the appropriateness criteria in particular.
Regarding the reasonable likelihood of Millie making the Draft Will, notwithstanding her comments that she did not agree with its contents, the Court of Appeal found that the following actions of Millie indicated that there was a reasonable likelihood of her making a Will in the terms of the Draft Will:
- she intended to move forward with having a will produced to her satisfaction;
- her instructions in October 2017, were substantially similar to the terms of the Draft Will;
- it was highly unlikely that she wanted to die without a Will; and
- she took steps to finalise her Will (eg being examined for testamentary capacity, asking her grandson for a list of paintings he would like, meeting with friends to discuss estate planning).
The Court of Appeal also held that certainty is not required when determining whether a proposed Will is one that would have been made by the Testator. It is sufficient for the evidence to show that the Testator is 'reasonably likely' to have made the Will. This allows for a degree of latitude or margin for judgment when considering the intentions of the Testator.
Regarding appropriateness of the Draft Will, the Court of Appeal held that Millie acted as if she had no Will and that the lack of clarity regarding the value of her estate was not sufficient for concluding that the Draft Will was not appropriate.
Conclusion
Whilst it is recommended to make a Will while you have testamentary capacity, unforeseen circumstances may make this impossible and restrictions imposed due to COVID-19 have made the formal execution of Wills more challenging. However, all is not lost when the Testator loses testamentary capacity and their testamentary wishes can still be effected. By making an application for a statutory Will, those close to the Testator can try to ensure that the Testator's wishes can be recorded as much as possible and carried out when they pass away.
For further information please contact:
Angela Harvey, Partner
Phone: +61 2 9233 5544
Email: axh@swaab.com.au
John Trinh, Associate
Phone: +61 2 9233 5544
Email: jxt@swaab.com.au
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.
