The facts of the case
Mrs T had come from family money, and had inherited upon her parents’ deaths a sizeable estate, including several properties in Mackay (“Mackay properties”) that she strongly wished to remain in the family upon her death. In 1998, she had made a will giving the properties to her son, Mr A. In 2000, she was diagnosed with Alzheimer’s disease and suffered a severe stroke in 2011. She lacked the capacity to make any further changes to the 1998 will.
Her son, Mr A, and his wife, Mrs A decided in 2014 to separate and divorce. This prompted Mrs T’s husband of 55 years to lodge an application to amend his wife’s will. Section 21 of the Succession Act gives the court discretion to authorise a will to be made, altered or revoked for a person without testamentary capacity. This type of will is also known as a statutory will.
Mr T argued in his application that if his wife had capacity, she would amend her will to ensure their son’s interest in the Mackay properties would be protected from divorce proceedings. As part of his arguments, Mr T stated that he believed his wife, upon learning of the divorce, would have removed Mrs A as a beneficiary and put in place a discretionary testamentary trust under the will to protect the assets for the grandchildren. Furthermore, the 1998 will stated that the assets in question were to go to the son in the event of Mrs T’s death, and if he had pre-deceased her, to her husband, Mr T; a clear indication that Mrs A had never been intended to inherit the Mackay properties.
Mr T’s application to the court failed, on the basis that the judge felt that accepting the application for leave to amend the will would have defeated the jurisdiction of the Family Court. This decision would have allowed Mrs A to ask the Family Court for the Mackay properties to be taken into account when deciding on a property settlement.
Mr T decided to appeal the decision, and the Court of Appeal has made its decision.
Mrs T is now 81 years old and has been in a vegetative state since a seizure in 2014.
The Court of Appeal Justices Muir, Gotterson and Morrison wrote in their judgement:
“In this respect I give particular weight to the evidence of the applicant who has been Mrs T’s husband for over 55 years. He believes that the significant change in the family would have caused Mrs T, if she still had the ability to do so, to review her Will in order to remove [her ex-daughter-in-law] as a beneficiary and that Mrs T would take steps to put in place a trust under her Will to protect the assets that Mr A would otherwise receive outright, for the benefit of Mr A and his children and family (excluding Mrs A).”
The judges also considered that Mrs T had told her husband on many occasions over the years that she always intended that the money she had inherited from her parents should remain in the family and that all her assets and estate be passed down to members of her family.
Of the original decision, the judgement says: “Most tellingly, there was a failure by the learned primary judge to have regard to the likely wishes of the testatrix and to the resolve with which she herself would likely act to see to it that they were carried out, had she testamentary capacity now.”
In other words, the appeal was successful because the judges found that if the will-maker was of sound mind, clearly she wished for her assets to remain in her family and that her testamentary wishes ought to be upheld.
It is the view of the writer, Bryan Mitchell, that that when estate planning, a specialist will look at all of the possible scenarios that might affect a will. This includes what might happen if a will-maker’s adult child goes through a divorce. How will this affect the way assets are left to the will-maker’s children and grandchildren? On balance, the Court of Appeal accepted that a person of sound mind, seeking advice from a succession lawyer, would be advised to consider the effect of divorce and to make preparations for it. Thus, because Mrs T had made her wishes explicitly known to her children and husband, and because in the regular course of estate planning, preparations for divorce would be put into place, the court gave Mr T leave to apply for an amendment to his wife’s will that would remove Mrs A as a potential beneficiary.
Second chance estate planning
Having said that, there is always a second chance. The other interesting thing about this case is the emergence of statutory wills (or court-made wills on behalf of people who cannot do their own). It’s a second chance to get the estate planning right. An application can be made to the court to amend a will to what the person would have wanted, if they could do so.
If you have a client whose testamentary capacity has already declined but where the will no longer reflects their wishes, there is potential to set it right through a court application.