Wills

Who can make a will?
Anyone over the age of 18, and anyone under 18 who is married or contemplating marriage, can make a will, provided they have testamentary capacity. Persons under the age of18 who are unmarried can make a will with the approval of the Court; this can be advisable for young people who are earning large sums of money in modelling, in show business or arising out of their sports activities or from commercial endorsements.

The Court can also authorise a will to be made for a person lacking testamentary capacity under Part 2.2 of the Succession Act.

I have been asked to prepare a will by a person whose affairs, to my knowledge, are being managed under an enduring power of attorney. Should I contact the attorney to verify the capacity of the intending testator?
Many people who have testamentary capacity have granted an enduring power of attorney and that fact, of itself, should not cast doubt on the testamentary capacity of the intending testator. Depending upon the circumstances of the intending testator, such as whether he or she is in a nursing home, hospital etc, it would be wise to first check with the testator’s treating medical practitioner or hospital superintendent to ascertain whether the client is suffering from any form of dementia or has differing periods of lucidity. You should consult the Law Society guidelines here.

Can wills be registered in NSW?
There is no public registry of wills in NSW, but a number of private providers offering will registration facilities are in operation. NSW Trustee & Guardian offers a secure storage service for wills, power of attorney and enduring guardianship documents called Will Safe. To find out whether NSW Trustee & Guardian holds the will of a deceased person, a member of the public can make a Deceased Will Enquiry.
The Registrar in Probate in the Supreme Court of NSW has a facility for lodgement of a will in the testator’s lifetime, although this is rarely used. In view of the ease of making a new will or codicil, will registration offers no certainty of proof of that document being the latest will.
From 2002 until 28 March 2014 the NSW Registry of Birth Deaths and Marriages (BDM) operated a Wills Register, however this service is no longer in operation.

Taking urgent will instructions

Do I have to accept instructions?
If a client wishes to make a will and the circumstances are urgent (for example, because of serious illness or imminent travel) it can be difficult to decline instructions.
It is, however, appropriate for a solicitor to decline to accept instructions from a client if, for example:

1. you are not confident you have the experience or expertise to do the work required;
2. you are unable to act promptly to do that work; or
3. the testator is unable to provide you with clear and coherent instructions. 

If you decide to decline the instructions, you should communicate that quickly so that the client has an opportunity to instruct another solicitor without further delay.

How do I assess testamentary capacity in urgent situations?
Wills made when the client is very ill are particularly susceptible to challenge on the grounds of lack of testamentary capacity.  To give the will the best chance of withstanding such a challenge, there are some steps you can take:

• Obtain the will instructions directly from the testator, who should be alone or with a qualified non-family member interpreter if required.
• Ask open-ended questions to test the client’s testamentary capacity.  The sample questions set out by Kunc J in Ryan v Dalton [2017] NSWSC 1007 at [107] are a good starting point:
  • Who are your family members?
  • What are your assets?
  • To whom do you want to leave your assets?
  • Why have you chosen to do it that way?

Record the questions and answers in a file note.

•  If possible, find out whether any diagnosis, medication or behaviour may indicate there is a reason to be concerned about capacity.  Again, take file notes.
•  If possible, obtain an opinion from the client’s doctor as to testamentary capacity, but where the situation is urgent do not delay in making the will.

 Can I just have the client sign my notes of their will instructions?
Because of the potential for construction issues with notes of instructions, this option is not ideal.  However, if there is no time to draft a new will or a codicil or an alteration to an existing will, then having the client sign your notes of their will instructions may be your only option.  Read them through to the client.  Consider whether to include a statement that any earlier will is revoked.  If there is no express revocation, a previous will is only revoked to the extent that its provisions are inconsistent with the later signed notes.  Use the words “I intend this document to form my will”, and have the client sign as well as two witnesses, if available.

Is it better to make a new will, alter an existing will, or make a codicil?

Making a new will
You will need to make a new will if the client does not have a will or if you do not have a copy of their current will.  Even if you do have a copy of the current will, if the changes to be made are extensive, a new will may be the best option.

Altering an existing will
If you have the client’s current will, and the changes to be made are not extensive, one option is to make alterations to the existing will.  For formal validity the alterations should comply with section 6 of the Succession Act 2006 (NSW) (“Succession Act”); they should be signed by the testator and attested by two witnesses.  If a second witness is not available, then have the alteration signed by the testator and one witness, in anticipation of an application under section 8 of the Succession Act.  A note should be made of the date on which the alterations are made.

Codicil
Another option, if you have the client’s current will, is to make a codicil.  Take care to ensure that any codicil is drafted clearly, particularly with reference to the parts of the will that are revoked and the parts that are confirmed, so that the will and the codicil make sense when read together.  A codicil should be executed in the same way as a will, but if there is only one witness an application may be made under the dispensing power provided by section 8 of the Succession Act.

 What wording should I use if I cannot find a second witness?
If the Court is asked to exercise the dispensing power, it needs to be satisfied that the deceased intended the document purporting to contain testamentary intentions to form his or her will.  For clarity, consider using words along the following lines:

For a new will:  “I intend this document to form my will”.  

For an alteration: “I intend this alteration to form an alteration to my will dated [insert date of will]”.  

For a codicil: “I intend this document to form a codicil to my will dated [insert date of will]”.

Executors

What happens if the will doesn't appoint an Executor?
One of the beneficiaries, usually a major beneficiary, can apply for Letters of Administration with the Will Annexed. When that application is granted the applicant is the Administrator of the Estate, with all the duties, obligations, rights and powers of an executor to carry out the wishes of the deceased as set out in his/her Will.

What happens if there is more than one executor and they all die before the Estate is fully administered, are their executors the executors of the first estate, or is a further grant required from the Court?
No, it is the executor of the last surviving executor who is automatically the executor in the first estate “by right of representation” as soon as he or she obtains a grant of Probate of the will of that last surviving executor. If the last surviving executor dies without a will, a further grant will be required to complete the administration of the first estate. The application to the Court will be for Letters of Administration cta. dbn. (cum testamento annexo, de bonis non administratis) (with the will annexed, in respect of the unadministered assets).

What if the executor appointed in the will is under 18?
A limited grant of Administration can be granted to his/her guardian, to expire on the executor turning 18. At that time a grant can be obtained by the executor to complete the administration of the estate.

What is the position if there are two executors and they don't agree to work together to obtain a Grant of Probate?
The duty of the executors, if they decide to accept their appointment, is to obtain probate and discharge their duty of care towards the beneficiaries. If the disagreement between executors is causing delay in the application for Probate, one of them, preferably with a solicitor's advice, should give notice to the other that he/she intends to apply for Probate and call on the other executor to join in the application. If that executor fails to respond within the specified time, the first executor may proceed to apply for Probate on his/her own, with leave being reserved to the other executor to come in and prove the Will.

What if the disagreement relates to issues such as entitlement or the identity of, or the disposal of, the estate property?
Either or both of the executors can apply to the Court under Section 63 of the Trustee Act for an opinion, advice or direction on any question regarding the management or administration of the estate property or regarding the interpretation of the Will. Provided no fraud, misrepresentation or wilful concealment is involved, an executor who acts in accordance with the opinion, advice or direction of the court is deemed to have discharged his/her responsibility as executor.

Is an executor automatically entitled to the payment of commission for his or her efforts?
On rare occasions in the will a specific legacy is left for the executor to cover his or her executorial work. In that event no further order is needed for payment of the commission specified. Similarly if there is a legacy or other bequest to the executor contained in the will, there is a prima facie presumption that the legacy or bequest is intended to cover any entitlement to commission. Otherwise payment of commission may be authorised by the Court on application by the executor on the filing and passing of accounts in the estate. The payment of a commission may also be agreed by all the beneficiaries provided they are of age and not subject to any legal disability.

How is an executor or trustee protected against further claims before the estate or trust can be safely distributed?
A Notice of Intention to Distribute the Estate (or Trust) should be advertised, in the prescribed form, giving at least thirty (30) days for claimants to notify the legal personal representative of their claims. Distribution should not take place until at least six months after the date of death or, if the legal personal representative has received notice of an intention to make a family provision claim which has not been commenced, at least 12 months after the date of death. 

Probate and Letters of Administration

Does a will need a grant of Probate or Letters of Administration before assets of the deceased can be dealt with?
It depends on the nature of the assets. If the estate is small and the assets comprise say a motor vehicle, furniture and personal effects and a small bank, credit union or building society account, these can usually be dealt with – in the case of a will – by production to the bank or financial institution of the will, a death certificate, evidence of the executor’s identity, a completed withdrawal form and a completed indemnity in the form required by the bank or institution. In this case the executor is personally liable for the payment of the funeral expenses and debts of the deceased, up to the value of the estate, and is personally liable to the beneficiaries for payment of their entitlement.

Where there is no will, in the above circumstances, subject to production of the death certificate, a completed withdrawal form and a completed indemnity as above, and evidence of the identity of the next of kin, payment may be made to the next of kin who will then be liable for payment and distribution as above to the persons entitled.

One disadvantage to proceeding without a grant of probate or letters of administration is that the person dealing with assets is not able to obtain protection from liability for claims through the publication of statutory notices. An option to consider is to refer a small estate to the New South Wales Trustee and Guardian who has additional powers in dealing with small estates including the filing of an election to administer the estate which provides all the protections of a grant of probate or administration.

When should Probate be applied for?
The Probate Rules require an application for Probate to be made within six (6) months of the testator's death. If the application is not made within that period an explanation of the reasons for delay will have to be given in the form of an Affidavit, either a separate Affidavit or included in the Affidavit of the Executor.

Beneficiaries

Does an adopted child qualify as a "natural" child in an estate?
The Adoption Act 2000 provides (s.95) that an adopted child has the same rights in relation to the adoptive parent(s) as a natural child born to them; they are regarded in law as the parents of the adopted child, who is regarded in law as the child of the adoptive parents and as having ceased, on the making of the adoption order, to be the child of the birth parents. The intestacy provisions of the Succession Act 2006 provide that an adopted child is regarded as a child of the adoptive parent and for the purpose of distribution and the child’s biological relationships are to be ignored.

Administration of Estate

Can a solicitor-executor come to an agreement with him/herself on the legal costs payable, apart from the costs up to the grant which are regulated?
No, similarly if the solicitor is a co-executor with another person. Disclosure of the basis and estimated amount of costs will need to be disclosed to the beneficiaries affected, usually the residuary beneficiaries.

When do accounts have to be filed and passed?
Under s. 85(1AA) of the Probate and Administration Act 1898, accounts must be verified and filed or verified, filed and passed where the executor or administrator is:

(a) a creditor of the estate of the deceased, 
(b) the guardian of a minor who is a beneficiary of the estate of the deceased, 
(c) the executor or administrator of the estate where the whole, or a part which, in the opinion of the Court, is a substantial part, of the estate passes to one or more charities or public benevolent institutions, 
(d) a person, not being a beneficiary, or, in the opinion of the Court, a substantial beneficiary, of the estate, selected at random by the Court, or 
(e) a person otherwise required to do so by the Court.

Further, an executor or administrator may wish to file accounts, for example, in order to apply for commission.

When do legacies have to be paid?
As soon as practicable once the executor has made provision for the payment of all debts and liabilities of the deceased and the estate. As a general rule, if not paid within 12 months after the death of the deceased, the legacies bear interest from that time at 2% above the cash rate last published by the Reserve Bank of Australia before 1 January in the calendar year in which interest begins to accrue.

Do estate monies have to be placed in an Estate account?
Not necessarily; if the monies are going to be received from the realisation of assets and paid out within a short period-a few months only-they can be paid to the credit of the estate in a solicitor’s trust account. However, if there is any significant delay in investment of monies not required to be distributed, those monies should be invested prudently by the executor as provided in section 14A of the Trustee Act 1925.

Are Probate costs regulated?
The costs of the legal work of and incidental to obtaining the grant of Probate or Letters of Administration, up to delivery of the grant by the court, are regulated as to the maximum amount chargeable. Costs in the administration of estates are deregulated. Practitioners must disclose to their clients, before commencing the retainer, their fees, including GST, for work in estates whether costs are regulated or deregulated. However, note that the disclosure requirements do not apply where the total of the legal costs, excluding disbursements, are not likely to exceed $750 or any amount prescribed by the regulations, whichever is higher.

I am acting for two executors, one of whom wishes to apply for commission. Can this be done by agreement or by court order?
The quantum of payment of commission can be agreed to by all of the beneficiaries if they are sui juris (have legal capacity), otherwise application should be made to the Court for an order for payment of commission at the time of filing and passing the estate accounts.

The amount which may be allowed to the executor seeking commission will depend on the degree for which he or she has been responsible for the discharge of the office of executor. The commission for private executors will be based on their "pains and trouble", and will be such as is "just and reasonable", having regard to their involvement in the administration. The normal range is between 1 and 1.5 per cent of the gross value of corpus and about 2 per cent on income. Excessive payments of commission or costs are liable to be set aside under s.86A of the Probate and Administration Act 1898.

There is a decision of the Supreme Court in Buckley and Others v Permanent Trustee Co Ltd (1990) 21 NSWLR 112 in which it was held that a trustee company may be liable to a reduction in its normal rate of commission if the co-executor had participated in discharging the executorial duties. 

Power of Attorney

Is a Power of Attorney liable to Stamp Duty in NSW?
No.

Does a Power of Attorney have to be registered before a contract can be signed by the Attorney?
No. It must however be registered in the General Registry of Deeds before dealings affecting land, such as a Transfer, are signed.

Should I provide a copy of my client’s will to his attorney?
Without the authority of the client a solicitor is not at liberty to provide the attorney with a copy of the will.

Under s22 of the Powers of Attorney Act a person who is named as a beneficiary of a specific item which is sold, mortgaged, charged or disposed of by a person as an Attorney has the same interest in any surplus money or other property of the Estate as if no sale, mortgage, charge, disposition or dealing had been made. It is therefore prudent to alert the Attorney if they intend to deal with the principal’s property the subject of a specific gift in the principal’s will.

In NSW the only person entitled as of right to view the will of a living incapable person is the NSW Trustee and Guardian. To avoid problems it is recommended that at the time of making the power of attorney specific instructions be obtained as to whether or not the solicitor may provide the attorney with a copy of the principal’s latest will.