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The Art of Giving: Gifts in Contemplation of Death

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What is a deathbed gift?

A deathbed gift, otherwise known as donatio mortis causa is a gift made to another person whilst the gift giver is alive, but is essentially “on their deathbed”. The gift is made in contemplation of death.

True deathbed gifts avoid the protections of the Wills Act 1970 (WA) and the Property Law Act 1969 (WA) in that they allow a person to transfer real or personal property without the usual formalities. An example of a deathbed gift is outlined in the matter of Sen v Headley [1991] Ch 425. In this case, the donor gifted her house by saying words to the effect of, “The house is yours, Margaret. You have the keys. They are in your bag. The deeds are in the steel box.”

 

Surely it can’t be that easy?

Given the nature of a deathbed gift, they are unsurprisingly open to abuse. The court recognises this, and has made it very clear that, when a deathbed gift is claimed, it will very carefully scrutinise the facts. The following factors assist this scrutiny and are all required to be met in order for the gift to be valid:

  1. The gift must be made in contemplation of ‘impending’ death. However, death need not be an inevitable outcome. For example, in Re Craven’s Estate [1937] 1 Ch 423, a gift made in advance of an operation was held to be a valid deathbed gift.
  2. The gift, or a means of accessing it, must be delivered to the receiver. For example, in the case of Sen v Headley, the keys to the house were placed in the receiver’s bag.
  3. The gift must be given on the condition that it can be revoked at any point until the death of the gift giver.

Generally, the second factor has proven the most contentious requirement, as it is often the case that it is not met. His Honour Justice Farwell commented on the importance of this requirement in the matter of Re Craven’s Estate [1937] 1 Ch 423, as follows:

Take for instance the case of a box. The donor says: ‘This box contains certain valuables. The contents of the box are to be for you, the donee, in the event of my death from the operation which I am going to undergo in a few days, but I propose to retain the box and the key of the box.’ If that were the position, it would be possible for the donor at any time to take out of the box whatever was in it and replace what was in it with other valuables, and it is that that should not be possible, that one of the requirements of a good donatio is that the donor should have parted with dominion, so that whatever the subject matter of the donatio was intended to be should remain that subject matter in the event of the death of the donor. In the case of a box, it is not necessary to hand over the box if the key is handed over, because it is assumed that if the key which unlocks the box is in the possession of the donee, the donor cannot have access to the contents of the box so as to deal with them in any way. I know of no decided case in which the question has arisen whether the handing over of a box and one key, it being proved that there was another key retained by the donor, would be sufficient, but, in the absence of authority, in my judgment, it would probably be held not to be a sufficient parting with dominion over the box, because the donor would have retained dominion over it and its contents by retaining the power to open the box, although it might be in the possession of the donee.

 

Can you challenge a deathbed gift?

Deathbed gifts can significantly reduce the size of a final estate and can have a huge impact on what a beneficiary under a Will might receive. In such instances, the beneficiary may wish to challenge the validity of the deathbed gift on the basis that one or more of the above three requirements cannot be established.

A deathbed gift could also be challenged on the basis of the intention of the gift-giver. For example, did the donor intend to give a deathbed gift, or were they actually trying to make a Will? While this distinction might seem superficial on the surface, the court must be satisfied of the intention of the donor because if their intention was to create a Will, the formalities of the Wills Act would apply.

Although there is a clear line of case law upholding the principle of donation mortis causa, the law in this regard is particularly complicated. Establishing whether a deathbed gift is valid can be a very complex process as each case turns on its own particular facts. At Carter Dickens Lawyers, our lawyers have significant experience in Wills and Estates matters, and would happily assist in this regard.

If you would require assistance in determining whether a claim to a deathbed wish is valid, please contact our office on (08) 9408 5212.

 

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

The Pitfalls of Homemade Wills

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Homemade Wills are a tempting proposition for those interested in reducing the costs associated with obtaining legal services. Whilst on the surface these Homemade Wills kits appear be straightforward and binding, this is not always the case. It is important to ensure that your Will is prepared in the proper legal manner so that your wishes are unambiguous, and your estate may be correctly dealt with at the time of your passing.

The common issues surrounding Homemade Wills have been exemplified in the Supreme Court of Western Australia’s recent case James Edward Donnelly as executor of the estate of Sarah Shulman v Donnelly 2020 WASC 254. In this decision, Master Sanderson at [13] heavily criticised the ambiguity of the Homemade Will in question, stating:

“Although it is a valid will because it complies with the provisions of the Wills Act apart from appointing the plaintiff as executor, it has no content. It makes no disposition. It is meaningless.”

In this case, despite there being every reason to believe that the deceased intended to leave her entire estate to the first defendant, even the most benign interpretation of the Homemade Will offered no benefit to the first defendant. Apart from being mentioned as executor of the Will, the first defendant was not mentioned at all – in fact, no-one was.

Master Sanderson suggests in this judgement that there is no question of the Will being ambiguous, as it simply remained silent on who was to receive the benefit (the beneficiaries of the Will). Through proper exercise of the construction of the Will, it was determined by Master Sanderson that, on the facts, he was satisfied that the deceased intended to leave her estate to the first defendant.

Although in this case the exercise of discretion fell in the favour of the defendant, this acts as a reminder as to the pitfalls of drafting Homemade Wills.

 

How do the Courts Construct an Ambiguous Wills?

You may be wondering what process is undertaken to properly “construct” or “read” an ambiguous will by the Courts? Construction of a Will is a two-step process:

  1. Firstly, the Will is to be read on its own without regard to any evidence. If this does not lead to an interpretation of the Will then an attempt must be made to deduce the intentions of the testator.
  2. If the intentions of the testator cannot be readily discerned for any reason, then the court should proceed to construe the Will with the assistance of cannons of construction. These cannons often allow a judicial officer to review extrinsic materials, as per section 28A of the Wills Act 1970 (WA), to better consider the intentions of the testator at the time of drafting the Will.

 

Common issues with Homemade Wills

Although use of these Homemade Wills kits may provide you a legally binding Will, it may not be drafted in such a way as to achieve what you truly intended. Common issues with Homemade Wills include the following:

  1. Failure to properly date the Will;
  2. Leaving the wrong assets or assets you are not entitled to distribute;
  3. Misunderstanding legal definitions;
  4. Losing the Will;
  5. Incorrectly witnessing documents;
  6. Unintended Tax Consequences;
  7. Appointing the wrong Executor;
  8. Ignoring potential and eligible beneficiaries; and
  9. Failing to provide for the guardianship of children.

 

Recent Judicial Commentary regarding Homemade Wills

Despite gaining popularity in recent years, Homemade Wills have been an enduring cause of concern within the Judicial system. Recent Western Australian examples which demonstrate this concern include the following:

Kossert v Ruggi as Executor of Will of Korps (No 2) [2012] WASC 191

Kenneth Martin J at [8] stated:

‘Sadly, as so many home-made wills seem to do because of a failure to receive proper legal advice, it throws up the question of [the deceased’s] failure to deal fully by his will with the one substantial asset he left, namely the house and land’

 

O’Brien, as Executor of Will of Hogan v Warburton [2012] WASC 82

EM Heenan J at [3] stated:

“ [the deceased’s] last will was prepared by him or at his direction apparently without any legal advice or assistance. Major difficulties have arisen in determining the proper construction of the testament and, in particular, whether or not it fails fully to dispose of the testator’s estate, so leaving a partial intestacy”

EM Heenan J at [58]:

“Obvious difficulties arise when parts of a will are ambiguous or, worse still, inconsistent. Such problems are often experienced in home-made wills such as this..”

 

Thomas v Pearman [2017] WASC 209

Master Sanderson at [1] criticised Homemade Wills, stating:

“The will and the codicil were home-made. They comprise 14 pages in all. They are a particularly egregious example of the folly of home-made wills.”

 

How can Carter Dickens Lawyers help?

Our expert lawyers are able to properly draft a will in the accepted legal manner, ensuring all of your wishes are to be fulfilled upon your passing. This will circumvent the ambiguous situations that often arise from Homemade Wills kits, and ensures that you can confidently have your Will executed as per your intentions.

At Carter Dickens Lawyers, we have the experience and knowledge to help you navigate this potentially complicated area of law. We understand the difficulties faced by families upon the death of a loved one, and we hope to ease this process by ensuring your final wishes are understood and binding.

Our Wills and Estates matters are provided on a fixed fee basis. Wills and Estates matters we may assist you with include the following:

  • Single Wills
  • Couples Wills
  • Enduring Power of Attorney (EPA)
  • Enduring Power of Guardianship (EPG)
  • Advanced Medical Directive
  • Probate Application
  • Letters of Administration (Deceased had no Will)

If you would like to discuss your Wills and Estates related matter, please contact Carter Dickens Lawyers on (08) 9408 5212.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

 

Do you require a ‘Sharia-compliant’ Australian Will?

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Australian Muslims are often obliged to ensure that they have a legally valid Will which conforms to both Australian Law and Islamic guidelines. This is particularly difficult to achieve where key understandings of the cultural, religious and legal needs of Islam are misunderstood by the practitioner tasked with drafting their client’s Will.

Islamic law is not recognised in Australia as we are deemed to be a ‘secular’ nation. Your will, therefore, needs to comply with Australian law for it to be legally enforceable, whilst incorporating the required clauses to ensure that your assets are distributed in accordance with the Islamic rules contained in the Quran.

At Carter Dickens Lawyers, we seek to bridge this gap and have ensured we have services tailored towards these specific needs of our clients. Our ‘Sharia-compliant’, or ‘Islamic Wills’, offer a service which provides legally valid Australian Wills custom-made to satisfy the strict Islamic guidelines following a person’s passing. In particular, we understand the varying requirements with regards to burial arrangements, the distribution of the estate, payment of obligations and the powers of trustees.

 

Burial Arrangements

Burial Rites

By executing a valid Islamic Will, a Muslim can give directions for the executor to make proper preparations for the washing and shrouding of the body. In addition, directions can be made for the funeral procession, funeral prayers and the burial. This allows a Muslim to state their intention to have an Islamic funeral.

At Carter Dickens Lawyers, we further ensure a proper Islamic burial via making provision for the counsel of a pre-selected Imam for any questions that arise.

Autopsy

As per the Quran, your valid Islamic Wills may contain directions for the prevention of voluntary autopsies, unless required by Australian Law. In addition, your Will can contain provisions for either allowing or preventing removal and donation of organs and other internal body parts.

 Obligations & Distribution of Estate

 Under Islamic law, your estate will be distributed as follows:

  • First, all funeral expenses must be paid, followed by the payment of all debts (secured and unsecured) owing.
  • The remainder of your estate, after deducting liabilities/debt is referred to as your net estate.
  • From your net estate, Islamic law permits you to distribute up to one-third as a legacy to any person, provided they are not heirs to the remainder of your estate. A legacy can be paid to a Muslim or non-Muslim and to any organisation or charity of your choice.
  • The remainder of your net estate, after deducting any legacies, must be distributed to your heirs in accordance with Islamic law. The section below outlines the expected shares.

 

Expected Distribution Percentages

Essentially the beneficiaries of your estate are your spouse (if you have one), your parents and children. Other immediate family members may become beneficiaries if your parents or children have not survived you. The percentage distributions are allocated as per the Quran, and varies depending on survivorship of the beneficial parties. Essentially, the basic inheritance shares are to be distributed according to the following table:

Relative Share
Each surviving parent 1/6
Surviving husband (where children exist) 1/4
Surviving husband (no children) 1/2
Surviving wife (where children exist) 1/8
Surviving wife (no children) 1/4
Surviving son (where surviving sister(s) exist) Son receives twice the share of a daughter
Surviving son (no sister) Son(s) receive remainder of estate
Surviving daughter (where surviving brother(s) exist) Daughter receives half the share of a son
Surviving daughter (no brother) Only one daughter = 1/2 of the estate

Two or more daughters = they share 2/3 of the estate

It is due to these particular Islamic requirements and their interaction with jurisdictional legal issues that legal advice is recommended prior to drafting and executing a ‘Sharia-compliant’ Australian Will.

Carter Dickens Lawyers excel at providing legal assistance and advice regarding the specific circumstances surrounding these Wills. We will ensure that you are made aware of any risks, and will provide a fully compliant Will to ease the potential legal strain associated with your passing.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

Applying for a Grant of Probate

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What is Probate?

Probate is the process in which a deceased person’s Will is proved and registered by the Supreme Court of Western Australia as being the last valid Will of the deceased person.

A Grant of Probate confirms that the executor named in the deceased person’s Will has the legal right to deal with deceased person’s estate. Banks and other financial institutions, Landgate, and share registries will often require a copy of the grant or to see the original version when dealing with the executor/administrator on the deceased’s person’s property.

The type of Grant required from the Supreme Court depends on the circumstances surrounding the execution of a Will by the deceased. For example, where no valid Will has been left, the process of applying for a Grant is via Letters of Administration, this process becomes more complex than a Grant of Probate, and we therefore recommend contacting Carter Dickens Lawyers to assist you through the process.

 

Common Forms of Grant:

  • Probate – where a person has died leaving a Will that nominates a person as executor the Court may grant Probate to that person.
  • Letters of Administration with the Will Annexed – where a person has died leaving a Will that does not name an executor or where the only executor named in the Will is unable or unwilling to apply for a grant of Probate, the Court may grant Letters of Administration with the Will Annexed to an appropriate person who will usually be a beneficiary of the deceased’s estate.
  • Letters of Administration – where a person has died without leaving a valid will the Court may grant Letters of Administration to an appropriate person who will usually be a beneficiary of the deceased’s estate.

Being awarded one of these types of Grants is representation to the World that the Executor/Administrator of the Estate has the right to deal with the deceased’s Estate.

 

When Will Probate Not Be Required?

There are particular circumstances where an Executor may not require a Grant of Probate from the Supreme Court of Western Australia. These include:

  • The deceased person did not own any assets in Western Australia (in which case Probate may be necessary in the Supreme Court of the relevant State);
  • The deceased owned real estate at the date of death as a joint tenant with another person. In this case the title can be transferred to the surviving party without a grant of probate being required;
  • The deceased’s bank account was jointly held with another person such as a spouse or partner. Such bank accounts will normally be transferred to the surviving party on production of a death certificate to the bank by the surviving party;
  • The deceased’s only other assets were personal possessions and household effects;
  • Shares owned by the deceased have a market value of less than $15,000;
  • The bank accounts of the deceased have a balance of less than $10,000 (the precise balance before a bank requires a Grant varies between individual banks).

 

Documents Required in Simple Application for Grant of Probate

All basic applications for probate require the same five documents (which increases to six if there are any other testamentary instruments). Additional documents may then be required to satisfy the court as to other issues.

The five basic documents (the sixth being any other instrument of a testamentary nature) are:

  1. motion for a grant of probate;
  2. affidavit of applicant for probate;
  3. rule 9B statement of assets and liabilities;
  4. the original will and any codicil;
  5. the original death certificate; and
  6. any other instrument of a testamentary nature.

 

What is the Process to Obtain a Grant of Probate?

The executor named in the deceased person’s Will must make an application to the Supreme Court. An application can be made at any time after fourteen days from the death of the deceased person, but it is necessary for the deceased’s death certificate to be provided in this application.

Once an application for a Grant has been lodged in the Supreme Court, the typical period of processing is four to eight weeks, however, this is dependent on the court’s capacity to hear the matter.

If the court is satisfied with the application, they will issue a Grant of Probate. If the court is not satisfied with the application, it may issue a requisition notice. A requisition notice is simply a notice which advises that there is a defect with the application or that the court requires more information.

At the conclusion of this process, the deceased person’s original Will is retained by the Supreme Court, with a copy of the Will being attached to the Grant of Probate.

 

For More information please see the Supreme Court of Western Australia’s Wills & Probate Webpage or contact Carter Dickens Lawyers on (08) 9408 5212 for a free 15-minute phone consultation with one of our Lawyers.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific facts of your Legal Matter.

Are you legally prepared for COVID-19?

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Whilst we prepare for many events in our lives, we often neglect to discuss the difficult ‘what if’ topics like passing away suddenly. Unfortunately, for many people, this means they leave their family without information and guidance about what to do when they die. Without adequate preparation, your loved ones may be left exposed to drawn out litigation required to settle your estate. As such, it is importantly to ensure you are legally prepared for the unforeseen to prevent further hardship to your family.

On the 11th of March 2020, the World Health Organisation (WHO) declared the Coronavirus (COVID-19) a pandemic. This is just one example of many unforeseeable global issues that may have significant implications for those who are legally unprepared. It is vital that people of all ages ensure that they are prepared for the legal ramifications of death or illness. Please make sure that you stay up-to-date and comply with all government directions and policies regarding COVID-19.

If you have not already done so, you should ask yourself the following questions to see if you are legally prepared for the unforeseen:

Do I have a Will and is it up to date?

No one wants to be worried about their assets from a hospital bed, as such it is vital to have a Will prepared. A Will is a legal document that sets out how you wish for your assets to be distributed after your death. It forms part of an estate plan and is an important strategic step in preserving your property for your family or other beneficiaries.

Passing away without a Will can place a significant burden on your family. It can impose onerous legal fees on your loved ones, and may result in your assets being distributed by the Supreme Court of Western Australia. Having a Will may ensure that your estate is dealt with promptly and efficiently and that your family is not left to fight drawn out legal battles.

Simply put, a Will properly drafted by our lawyers is the best way to have your assets dealt with in accordance with your wishes after your passing. A Will is designed to reduce future complications and reduce the likelihood of disputes arising from the interpretation of your Will between trustees, beneficiaries, and other parties.

Do I have an Enduring Power of Attorney?

An Enduring Power of Attorney (“EPA”) allows you to appoint someone you trust to make property and financial decisions on your behalf in the event you lose the legal capacity to manage your own affairs. This will include managing your money and real estate. An EPA does not permit an attorney to make personal, medical and lifestyle decisions.

In light of events such as the COVID-19 pandemic, the benefits of an EPA are clear given the chances of hospitalisation or isolation. In such an event, an EPA would allow your appointed attorney to undertake a range of tasks  on your behalf when and if appropriate to do so. These may include everyday tasks, such as paying your bills and signing documents that require urgent attention, or more complex tasks such as dealing with your property (i.e. selling property) during your recovery.

Do I have an Enduring Power of Guardianship?

An Enduring Power of Guardianship (“EPG”) allows you to appoint someone to make personal, lifestyle and treatment decisions on your behalf should you ever become incapable of making these decisions yourself. These decisions include, but are not limited to, where you will live and what medical treatment you will receive.

With events such as COVID-19 having potentially life-threatening health impacts, it is vital to ensure that you have a guardian, appointed via a legally enforceable EPG. Your appointed guardian should understand your health care plans, directives and wishes should you become incapable of dealing with your own health care decisions. You must also ensure that if you have already appointed a guardian, they know of their appointment and are willing to act in such a capacity.

Where no attorney is nominated via an EPG you risk having the Public Advocate, which is a government body, appointed to assume responsibility over your health care decisions. This means that should you become mentally, or physically incapacitated without having executed an EPG, your family may not have sole control over your health care decisions.

Did you know that your Superannuation does NOT form part of your estate by default?

Superannuation is not considered an estate asset. A super fund is a type of trust meaning that it is not legally “owned” at the time of death. This means that on death it does not flow to the estate of the deceased automatically. Instead, without a binding death nomination a trustee of the super fund will pay out ‘death benefits’ in accordance with the governing rules of the fund and relevant law. This means that if you arrange to leave all your super to a child or spouse, this might not be honoured upon your passing.

However, an up-to-date Binding Death Nomination can be used to override the trustee’s discretion and ensure that the arrangements you have made during your lifetime are honoured. Simply put, a Binding Death Nomination is a legally binding nomination allowing you to advise the trustee who is to receive your superannuation benefit upon your passing and how to distribute your benefit.

Note, Binding Death Nominations should be reviewed regularly, as they can lapse in binding force after a period (usually 3 years). If you do not have a Binding Death Nomination or have not reviewed it in recent years, we advise that you talk to one of our lawyers regarding your options.

Do I have all my important documents in order?

You should ensure that copies all your important documents are stored together with your Will. Usually, after a person passes away, that person’s family will struggle to locate all relevant documents, passwords, and keys. To assist your family, you should prepare a list detailing your:

  • assets and liabilities;
  • access codes and passwords;
  • the location of keys and other documents i.e. bank account details, superannuation details etc.; and
  • details of your financial advisor, lawyer, accountant, insurance company and similar entities.

It is important to share with someone you trust the location of that list.

Do I need to nominate a guardian for my children?

If you are a parent of a child under 18, it is important that you know who will take care of your children if anything were to happen to you. Generally, whilst care of your children would flow to the other parent, it is worthwhile determining who would assume care of your children in the unfortunate event that both you and the other parent have passed on.

Fortunately, s71(3) of the Family Court Act 1997 allows you as a parent to appoint a testamentary legal guardian for your child via a Will or Deed. The appointment of a guardian will only take effect upon the death of the last surviving parent or legal guardian of the child. The appointment ends when the child reaches the age of 18 years. If you are unsure of who will take care of your children if you and the other parent are no longer, it may be time to speak to one of our lawyers.

If you have not yet prepared the above documents, you leave your family open to the potential of costly litigation. Further, there is no guarantee that your arrangements would be honoured upon your passing if you do not have a legally enforceable Will.

 Contact CD Lawyers today, and we can assist you and your family in ensuring you are legally prepared for the unforeseen.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

Have you made a Will?

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At Carter Dickens Lawyers, we specialise in Family Law matters but also have years of knowledge in practice areas ranging from criminal law to estates planning and litigation.

Passing away without a Will can place a significant burden on your family. It can impose onerous legal fees on your loved ones and may result in your assets being distributed by the Court. By having your Will drafted by us, we can assist you to have your assets divided in accordance with your wishes upon your passing. You can also nominate the person you wish to act as your executor to look after your Estate when you pass.

It is important to seek professional assistance when writing a Will. Our lawyers will write your Will in accordance with your instructions and provide practical advice that will help prevent any complications after your passing. This reduces the likelihood of disputes regarding interpretation between trustees, beneficiaries and other parties.

A Will properly drafted by a lawyer is the best way to have your assets dealt with as you wish after your passing – but how do you manage your affairs in the event that you lose capacity to make decisions while still alive?

Enduring Power of Attorney (“Attorney”) and Enduring Power of Guardianship (“Guardian”) documents allow you to appoint a trusted person to make decisions on your behalf when you are no longer able to do so. An Attorney is eligible to make property and financial decisions on your behalf. A Guardian has authority to make personal, lifestyle and treatment decisions for you.

Attorney and Guardian documents must be in a specified format in order to be legally enforceable. It is important that you keep the original Attorney and Guardian documents and consider giving copies to your appointed attorneys/guardians and your lawyer. It is also recommended that you provide your GP and relevant health professionals copies, due to the nature of the documents. All copies, especially the original, will need to be kept in a safe place where they will not be lost, damaged or destroyed.

Attorneys and Guardians can assist your family in making life a little bit easier at a difficult time for all. It is important that you have these documents completed in order to be prepared for situations in which you are no longer able to make decisions for yourself.

Our office can prepare Attorney and Guardian documents for you, and write your Will for a fixed fee arrangement. This can be further reduced if we draft the documents together. We also offer discounts for people that hold a pension card. Contact our office for more information.

Please note that the above is general information and should not be relied upon as legal advice. All situations are different and legal advice must always be tailored to the specific situation.

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Phone: (08) 9408 5212

info@cdlawyers.com.au