claims

Statement of Testamentary Intention

Section 100(2) of the Succession Act 2006 (NSW) provides that a written statement made by a deceased person during their lifetime which may explain or justify the provisions of a will is admissible in evidence.

This means that a Court can have regard to the Deceased’s wishes and intentions as expressed in such statements, often called a “Statement of Testamentary Intention“, in making a decision regarding the distribution of their estates such as where a Family Provision Order has been sought (an order which effectively alters the division and distribution of a deceased person’s estate, deviating from that stated in their Will to which Probate has been granted).

Where a person makes a Will that they think may ultimately be contested (such as where an estranged child is left out of the Will), then a Statement of Testamentary Intention can be executed at the same time, whereby the person making the Will sets out their reasons for excluding that person as a beneficiary.  A Statement of Testamentary Intention is often made in the form of an Affidavit or Statutory Declaration, but it can even include an audio-visual recording of the person making the Will made with their consent, statements made orally to another person or even a contemporaneous email, but a written and sworn statement is usually the best if time permits.

The risk in making a Statement of Testamentary Intention is that if for example:

  • it is not documented properly;
  • was not made contemporaneously with the Will; or
  • where a significant period had elapsed between the making of the s.100 Statement and the time of the Deceased’s passing (that is, it is not up to date – as the reasons may have been eroded by later interactions and events etc, such as where a relationship has been repaired)

then it can lack evidentiary weight and can even act to benefit the excluded person, such as:

  • if it notes matters that would ordinarily be considered ‘hearsay’ (such that it can be objected to being admitted into evidence);
  • where unsubstantiated opinions or slurs are used; or
  • where there are factual statements or reasons given that can be shown to be incorrect

as they can undermine the basis of the will-maker’s decision to exclude a person and bolster the plaintiff’s case against the estate.

Usually the reasons for excluding a beneficiary from a Will should not be stated in the Will itself, but if they are to be documented, should be set out separately in the s.100 Statement so that the Executor can decide whether or not to use it in evidence.

FURTHER INFORMATION

For further information, please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Dispute Resolution / Estate Planning / General / Litigation / Probate / Risk management  by 01 Nov 2024 0 comments

Non-contestable Will

We often get asked “can you draft a non-contestable Will ?”

You can draft a Will to state who you want to be your executor and how to divide and distribute your assets once you pass away. Even with a valid Will stating your wishes and even if it has been admitted to Probate (or even if you die intestate), the distribution of your estate can be altered by the Court order under the Succession Act 2006 (NSW) (Act).

Put simply, there is no way to draft a Will prevent such a claim on your estate (and no, you can’t make a gift dependent on not making a claim), but there are things that can be done to help prevent (or minimise) a claim, including:

  • not having an estate at all
  • carefully drafting your Will and drafting evidence to help oppose a likely claim
  • obtaining a release under the Act

A Will can only deal with assets that you have as at the date of your death. One of the best ways of preventing a claim on your estate is therefore to not have any estate in the first place!  This is easier said than done and often means that benefits such as the principal place of residence exemption for capital gains tax (CGT) may not be available and other benefits cannot be accessed, but with the use of trusts and other structures, you can avoid having any personal assets to be distributed on your death. This is an extreme option that not many opt for given the many downsides and potential benefits that need to be forgone.

Where people have not set up their affairs so as to have no actual estate, but later seek to do so (such as by gifting assets, severing a joint tenancy or selling assets to others for less than full valuable consideration), they need to be aware of the provisions in the Act relating to “notional estate“. Notional estate rules in NSW effectively operate such that any assets disposed of in the period of 3 years prior to your death may be notionally brought back into your estate and available for division by the making of a family provision order in favour of an eligible person under the Act. As with most decisions, there are also potential negative consequences such as stamp duty, CGT and loss of social security entitlements from gifting rules.

Most people do not consider it advantageous to them during their life or their intended beneficiaries to have no estate at all for reasons such as those relating to CGT etc. For those, one way to help prevent or minimise the risk of a claim for a family provision order is to ensure that they have a carefully prepared Will and accompany that Will by a (usually contemporaneous) Statement explaining why a person did not get a benefit in the Will or is to receive less than they may have expected. This is known as a Statement of Wishes or a Statement of Testamentary Intention and is often prepared in for formal form of an Affidavit so it can be use in evidence. Such documents may be updated as required and care must be taken to ensure that they are factually correct as defects can undermine their force, particularly as you won’t be around to give evidence to correct any errors.

One way to prevent a claim for a family provision order is to apply to the Court for an order under s.95 of the Act releasing an estate from claims under the Act. This can be done either before or after your death, such as part of a family settlement of another dispute or claim on an estate and aims at achieving finality regarding family disputes. The Court may only approve such a release and make an order after considering all of the relevant circumstances, so this will involve preparation of appropriate initialing proceedings and affidavit evidence.

As with any estate, each person’s circumstances, assets and relationships with potential beneficiaries and claimants are different and care needs to be taken to consider all information available so as to make the right decisions regarding your estate. This will involve weighing up the pros and the cons of each decision and bearing the consequences and risks of doing so.

FURTHER INFORMATION

For further information please contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

Stay up to date – LinkedIn | Facebook | Twitter | Instagram

in Asset Protection / Dispute Resolution / Estate Planning / Litigation / Probate  by 01 Nov 2023 0 comments