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Wills

16 Sep 2016 - 10:44 | Version 11 |

Contributed by MelissaYates and current to 1 May 2016

A will is a legal document that sets out how a person's assets are to be dealt with on their death. Having a valid will enables people to choose who is authorised to deal with their property on their death (called the "Executor/s") and ensures that the appointed Executor/s distribute the property of the deceased (known as the "Estate") in accordance with the directions stated in the will.

Legally, anyone can draft their own will. Unfortunately even valid wills can be challenged by people who might be disappointed by its contents, so it is important when drafting a will to be mindful of the ways in which a will or an estate can be challenged and to attempt to reduce the likelihood of this happening as much as possible. While newsagencies often sell Will Kits for people to prepare their own wills, even simple wills should be at least checked by a solicitor to ensure that they adequately deal with the assets of the person making the will and comply with the formal requirements for making a will. More complex wills or situations involving step-families, large estates (i.e. worth over $2 million net) or people who are self-employed or who have an interest in businesses (such as companies, partnerships, trusts or self-managed superannuation funds) should be drafted by an appropriately qualified and experienced solicitor to ensure they are properly drafted to achieve the intentions of the person wanting to making the will and to avoid any unwanted taxation consequences where possible.

Low income earners, pensioners and concession-card holders often cannot afford the services of a solicitor to draft their wills. The Public Trustee (see Contact points ) also provides an excellent service to the community and can draft wills and provide advice about wills for a reduced fee. Also, charities such as the Salvation Army and the Red Cross offer special wills days throughout the year where members of the community can have a simple will prepared by a solicitor free of charge or for a heavily reduced fee to encourage people to leave a gift to that charity in their will.

Who can make a will?

Generally speaking, anyone over the age of 18 who has testamentary capacity can make a will. A person who is under 18 may only make a will if it is in contemplation of their marriage or they are or were married previously (see Section 7 of the Wills Act (NT)).

What is testamentary capacity?

If a person does not have testamentary capacity, they are unable to make a valid will. This issue is particularly relevant for people who suffer from intellectual impairment, mental illness, dementia or alcoholism or are elderly or gravely ill.

The courts have been asked on a number of occasions to make a determination as to whether a person who made a will had the capacity to do so. The most quoted authority on this issue is Banks v Goodfellow (1870) LR 5 QB 549 (see also Dixon J's comments in Timbury v Coffee [1942] HCA 37; (1941) 66 CLR 77 at 283) which sets out a number of factors that are essential for a person to be deemed to have testamentary capacity:

  1. The person making the will must understand that they are making a will and what the will does;
  2. The person making the will must have a good grasp as to what property they own and what debts they have and what they are dealing with in their will;
  3. The person making the will must be able to appreciate who in their lives should morally be included in their will and be able to make informed decisions about who they want to include in their will and why; and
  4. The person making the will cannot suffer from any sickness or delusion which might taint or have an overbearing impact on the normal decision-making abilities of that person.

If there is any doubt that the person wanting to make the will has the capacity to do so, certain precautions should be taken to ensure that at the time the person wanting to make the will outlines their wishes for the purpose of drafting the will, sufficient evidence is obtained to potentially give to a court later on to make a determination on capacity if needed. For instance, if a solicitor is assisting with preparation of the will, they should take detailed, 'word for word' file notes of the interview with person wanting to make the will (sometimes, it may even be appropriate to record the interview using a video or sound recorder if the person wanting to make the will consents).

It might also be prudent to seek the opinion of the will-maker's treating doctor by providing them with the 'test' for testamentary capacity (as per Banks v Goodfellow above) and asking if in their opinion the will-maker satisfies those tests.

Any file notes, recordings, letters and reports from treating doctors should all be kept in a safe place along with the original executed will to ensure that if anyone raises a concern about the will-maker's testamentary capacity to make a will, there is sufficient evidence to enable a court to determine whether or not the will-maker had capacity at the time they provided the instructions to make the will.

Court ordered wills

Section 18 of the Wills Act (NT) provides a mechanism for a person under the age of 18 to apply to the court for authorisation to make, alter or revoke a will in circumstances where they wouldn't otherwise be able to. This might be relevant for a young person who receives a substantial compensation pay-out and is not expected to live very long or their health is expected to deteriorate rapidly to the point where they will no longer have testamentary capacity to make a will.

Part 3 Division 2 of the Wills Act (NT) then goes on to provide a mechanism for persons who represent someone who does not have testamentary capacity to make an application to the court for permission to make, alter or revoke a will on behalf of the person without testamentary capacity. Court ordered wills are becoming increasingly common in other states as a tool for family members of a person who has lost testamentary capacity due to either illness or accident to ensure that the wishes of that person are properly formulated into a binding will to avoid any unwanted consequences because that person did not have the opportunity to make, or alter, or revoke a will prior to losing capacity.

A useful reference for court ordered wills is the text written by R Williams and S McCullough, Statutory Will Applications: A Practical Guide (LexisNexis Butterworths Australia, 2014).

What is a valid will?

A valid will must:
  • Comply with the formalities set out in the Wills Act (NT) in relation to writing and execution;
  • Be made by a person who has testamentary capacity (see What is testamentary capacity above) and knows and approves of the contents of their will; and
  • Not have been revoked.

If a will is considered valid, the persons authorised to deal with the property of the will-maker may apply to the court for an order which certifies that they are able to administer the estate of the will-maker in accordance with the terms of their will.

If the will is invalid, it is considered an informal testamentary document and a lengthy and often complex and expensive court process must then be undertaken to ask the court to determine whether that document and the circumstances surrounding how the document was made are sufficient to consider it a 'will' or whether it was just a statement of wishes which was not intended by the deceased to be binding.

Compliance with formal requirements

Section 8 of the Wills Act (NT) sets out how a will should be executed to be valid. For instance, to be valid, a will must be:

  • In writing;
  • Signed by the will-maker; and
  • Signed by at least two witnesses who were present at the same time and witnessed the will-maker sign the will.

The will-maker and the two witnesses should sign each page of the will (if more than one) and make sure the date the will was signed is included on the document. It is preferable but not mandatory that the two witnesses are present at the same time, witnessing the will-maker sign the will and witnessing each other sign the will. It is also a good idea that the will-maker and the two witnesses use the same pen to sign the will in case forensic evidence is required to establish that the will-maker and the witnesses were present at the same time. Be very careful to ensure the people who witness the will are not receiving a benefit under the will, otherwise the gift to that witness may be considered to be void and of no effect (see Section 12 of the Wills Act (NT)).

It is also preferable, but not mandatory, that the will-maker and the two witnesses sign what is called an 'attestation clause' at the end of the will. A standard attestation clause would usually have words like:

'Signed by [will-maker's name] as his/her last will and testament in the presence of us both, who were present at the same time and who, at his/her request and in his/her presence and in the presence of each other, subscribed our names as witnesses'.

An attestation clause is not required for a will to be considered valid, but, if a Grant of Probate is required from the Court in relation to the will, Rule 88.14 of the Supreme Court Rules (NT) requires evidence of attestation and the easiest way to achieve this is by including an attestation clause in the will. If an attestation clause is not signed at the end of the will and a Grant of Probate is required then the witnesses to the will must provide sworn statements to demonstrate that the will was signed and witnessed in satisfaction of the formal requirements.

If the will-maker is paralysed or too weak to sign, the will can be signed with a mark or someone else can sign it on behalf or at the direction of, and in the presence of, the will-maker. In such circumstances, sworn statements that explain the way it was executed and the understanding of the person making the will should also be sworn by witnesses and any other people present in case they are later required for an application for a Grant of Probate (refer rule 88.15 Supreme Court Rules (NT)).

A person not proficient in English should obtain the assistance of a properly accredited translator to ensure the will-maker's wishes are properly recorded in English. The translator would then execute the will along with an amended attestation clause which would set out that the translator read and explained the will to the will-maker and that the will-maker knew and approved of the contents of will and that the will-maker then signed the will in the presence of the translator and two witnesses.

If these steps are not taken, the will could be challenged on the grounds that the will-maker did not understand or approve of the document they signed.

A useful resource which provides special attestation clauses in circumstances where a will-maker cannot sign their own name, or can read but cannot write, or does not understand English, can be found in text written by C Birtles and R Neal, Hutley's Australian Wills Precedents, LexisNexis Butterworths, (8th ed, 2014).

Knowledge and approval of contents of will

If a will is properly executed in accordance with the formal requirements (including with an attestation clause) for a valid will, then the law presumes that the person who made the will knew and approved of its contents (Symes v Green (1859) 1 Sw. & Tr. 401 or 164 ER 785).

If, however, there is some evidence which may cast doubt on whether a will-maker knew and approved of the contents of their will such as age, infirmity, illiteracy or blindness, then it is up to the person who is seeking to establish that the document was the will of the will-maker (such as the Executor) to prove to a court on the balance of probabilities that the will-maker knew and approved the contents of the will in order for the will to be valid. This may be done by sworn evidence from the witnesses to the will, sworn evidence by a doctor who was treating the will-maker at the time the will was made or other evidence as might be appropriate in the circumstances.

Revocation of wills

A will-maker would revoke a will if they no longer wish for that document to have legal effect. Section 13 of the Wills Act (NT) sets out the way in which a will might be revoked. For instance:
  • By a court order pursuant to sections 18 & 19 of the Wills Act (NT) in the case of minors or persons who lack testamentary capacity;

  • By marriage (unless the will was expressed to be made with the intention of marriage) but not in respect of any gift or appointment of the will-maker's spouse contained in the will (see Section 14 of the Wills Act (NT);
  • By divorce or annulment of marriage but only to the extent of any gift or appointment to the will-maker's spouse (to whom they are now divorced) (see Section 15 of the Wills Act (NT)) unless it is expressly stated that the gift or appointment applies notwithstanding that the will-maker is divorced from their spouse;
  • By a later will;
  • By a written declaration that a will is revoked, provided that declaration is signed in the same way that you would a will (i.e. in front of two witnesses);
  • By the will-maker, or by another person in the will-maker's presence at the will-maker's direction, destroying the will with the intention of revoking it; or
  • By the will-maker, or by another person at the direction of the will-maker and in their presence marking the will in such a manner that a court would be satisfied that the will-maker intended to revoke it (i.e. by striking through the pages of the will and writing the words "revoked" on each page)

Solicitors should take care when they are asked by will-makers to destroy wills held in the safe custody of the solicitor for the purposes of revoking them. The solicitor should ensure the will-maker is in their presence when the will is destroyed and that the will-maker signs a written direction that the solicitor is to destroy the will for the purposes of revoking it. Often, a solicitor will receive an email or a telephone call from a will-maker saying that they have made a new will and could the solicitor please tear up the old one. The revocation by destruction is not valid unless this is done in the presence of the person who made the will.

Where the will is invalid or no will is made

If no will is made at all and there is no document made by the deceased setting out their wishes as to what they want to happen to their property or who they authorise to deal with their property in the event of their death, the deceased is said to have died intestate and the deceased's property is dealt with according to legislation called the Administration and Probate Act (NT). This will often have unexpected consequences as, for instance, a deceased person's spouse does not automatically receive the whole of the deceased's property. It must be shared between the spouse and the children in proportions set out by the Administration and Probate Act (NT).

It is possible for only part of a will to be invalid or of no legal effect. In that case, the provisions of the Administration and Probate Act (NT) will still apply but only to the part that is not properly provided for by a valid will. An example of this might be where a will-maker gives away much of their property but the will does not contain a 'catch all' clause which deals with any leftover property they might own (known as a residue clause). In this example, the residue would then be given to the people set out in the Administration and Probate Act (NT) because it wasn't dealt with under the will.

If the will is invalid because it does not satisfy all or some of the formal requirements, then it may still be given legal effect by an application to the court to dispense with those formal requirements under Section 10 of the Wills Act (NT). This is a costly and complex process, however, and requires the person putting forward the document to provide a lot of evidence to the court to satisfy them that the document was intended by the deceased to be their will despite not complying with all the formal requirements. More information on how the courts deal with informal wills can be found by reading the cases of Hatsatouris v Hatsatouris [2001] NSWCA 408 and Lindsay v McGrath [2015] QCA 206.

What to consider when making a will

One of the most important functions of a will is choosing the person or people you want to deal with your estate when you die and to carry out the wishes contained in your will. This is your Executor. Your Executor should ideally be a person who is familiar with your affairs, is able to diplomatically balance the needs of your beneficiaries or family members in times of emotional hardship, is willing to seek and take advice where required (such as legal advice or financial advice) and is fairly organised and has demonstrated that they manage their own affairs well. Sometimes, where no single person within your group of family, friends and colleagues possesses all of these characteristics, two people would be appointed as joint Executors. If joint Executors are appointed, this means that both people named would have to work closely together and cooperate to carry out the wishes of your will. They would both need to sign documents authorising the administration of your Estate so it would be preferable for them to both be living close to each other or have a convenient means of communicating with one another.

It is also advisable that your Executor should also be a resident of Australia to ensure there are no adverse taxation consequences during the process of administering your Estate.

A back-up Executor should also be included whereby if your first choice of Executor has already died, is unable to take on the role or unwilling, someone else that you have carefully considered can step in their place.

Beneficiaries should also be carefully considered. It is important to ensure that every will contains a 'residue clause' whereby any assets which have unintentionally been left out of the gifts you have made in your will or any gifts that 'fail' because the beneficiary is no longer alive to receive it, are 'covered off' so that you avoid a partial intestacy. It is important when considering your beneficiaries to consider who might have a claim on your Estate such as a spouse, children or someone financially dependent on you for support.

If you have children under the age of 18 you are also able to express a wish as to who is to become the primary care-giver or guardian of those children. Often, this role will fall to the surviving parent but in circumstances where both parents have died you may wish to nominate a desire that a certain friend or family member be offered that role. An appointment of a guardian is not legally binding and still subject to consideration under Family Law, however, it provides your family and friends with a clear idea as to what your wishes would have been. It is recommended that you do not appoint a husband and wife as the guardian. Given the increasing rate of separation and divorce, it is better simply to appoint the member of the couple who is related to you or who is your guardian of choice. The spouse of that nominated guardian will be consulted as part of the administration process anyway.

Common terms in wills

Beneficiary - a person who is to receive a benefit under a term of the will (can be either male or female, or a corporation or charity).

Bequeath - an old term used to give a gift of personal property such as cars, jewellery or furniture to a person. Now tends to be a generic term equivalent to 'give'.

Codicil - a document which amends a previously made will, signed in the same way as a will and kept with the will it amends. This allows a will-maker to make minor amendments (such as changes to who the Executor might be for instance) to the terms of their will without have to re-do an entire will.

Devise - an old term used to give a gift of real property (i.e. land). Now tends to be a general term equivalent to 'give'.

Estate - the property owned by the will-maker or the property owned by a deceased person who was intestate.

Executor - the person who is authorised by the deceased to carry out the wishes express in their will. Sometimes, older wills refer to a female executor as an Executrix. This is no longer necessary. There can be more than one executor however, no more than three is recommended to avoid an overly cumbersome process in administering the will.

Intestate - the situation which arises when a person does not have a will or alternatively, part of their will is invalid, meaning no direction is given in respect of the deceased's estate and must be dealt with according to legislation.

Residue - the balance of a persons property which has not specifically been dealt with in the previous clauses of the will. For instance, a will-maker might give their house and contents to their spouse and give the residue to their child. This would mean that the house and its contents would go to the will-maker's spouse but anything owned by the will-maker which was not the house or its' contents would be given to the child.

Testator - the person making the will. Sometimes, in order wills, a female testator is described as a testatrix. Modern wills often use the term will-maker instead.

Storage and safe-keeping of wills

A will is an important document and should be kept in a safe place, such as with the Public Trustee or with the solicitor. If the original will cannot be located once a will-maker dies, the executors must then make an application to the court to prove a copy of the will and overcome that presumption that if the original cannot be located, then it must have been destroyed for the purpose of revoking it. This is costly and complex and should be avoided by keeping the original will in a safe will depository such as with the Public Trustee who stores wills free of charge or with a solicitor in their safe custody safe.

If a will has been tampered with in any way, it may raise doubt as to whether the will was revoked or whether an amendment was made to will etc. The Supreme Court Rules (NT) contain provisions which state that if a will appears tampered with in any way, either by marks, burns, tears etc. then any application for a Grant of Probate will require sworn evidence to convince the court that these marks were not amendments or alterations to the will or that the will was not revoked.

To ensure this evidence is not required, do not put paper-clips on original wills, do not remove staples once applied, do not staple other documents to the will, do not mark the will in any way, do not hole-punch the original will, do not tear the will. Best practice is to staple the will once in the top left-hand corner, place in a plastic sleeve and then in an A4 envelope clearly marked for safe-keeping.

Changing a will

Circumstances can change between the time a person makes their will and their death. The will-maker might sell or buy property, give it away or lose it. Beneficiaries or Executors to the original will might have died or new ones come into consideration.

A will itself can't be altered after it has been signed unless the alteration is signed by the will-maker and the two witnesses in the same way as for the whole will.

Changes to a will after it has been signed will only be valid if done by codicil or revocation or revocation and republication.

A codicil is an addition made to an earlier will. It must conform to all formalities already outlined above. A codicil that refers to the will in general terms effectively confirms the will and any earlier codicil. Codicils are used to make minor changes to wills. If major changes are required or where the will is brief, the old will should be destroyed and a new one drawn up.

Making International wills

On 10 September 2014, Australia became a signatory to the Convention providing a Uniform Law on the Form of an International Will 1973 ('the UNIDROIT Convention'). All states and territories of Australia have now amended their Wills Act or equivalent to provide for how to execute and draft a will to comply with this convention and therefore a will drafted and executed in Australia, in accordance with these provisions, will be valid and of full legal effect in all countries which are signatories to the UNIDROIT Convention. http://www.unidroit.org/status-successions provides a schedule of the countries who have become a party to the UNIDROIT Convention since it was first adopted in 1973.

On 10 March 2015, the Wills Amendment (International Wills) Act 2013 commenced which amended the Wills Act (NT) to include the Annex to the UNIDROIT Convention which sets out how to comply with the requirements for an international will.

Part 5A of the Wills Act (NT) now applies in respect of wills which are to have international effect and Schedule 2 of the Wills Act (NT) sets out the formal requirements namely:

  • The will must be in writing and signed by the will-maker;
  • The will must be witnessed by two witnesses and an authorised person (i.e. a solicitor authorised to practice law in Australia or a notary public) (see Section 48D of the Wills Act (NT));

  • The will must contain an attestation clause and be signed by the will-maker, the two witnesses and the authorised person;

  • The authorised person must attach a certificate to the will in compliance with Article 10 of the Annex to the UNIDROIT Convention;

  • The will must be dated;

  • The will must be signed on all pages by the will-maker, the witnesses and the authorised person.

For international wills which are to apply in countries which are not signatories to the UNIDROIT Convention, it would be advisable to draft multiple wills for the will-maker: one in Australia to deal with their Australian property strictly (and the will must specifically state that it only applies to the Australian property of the will-maker) and one in each other jurisdiction where the will-maker has assets, prepared and executed in accordance with the laws of that jurisdiction.

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