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Statutory wills – what you need to know

What happens if a family member loses capacity before they have finalised their will? Do the rules of intestacy apply? Was that what was intended? Perhaps not…

This issue was recently considered by the NSW Court of Appeal in the matter of Small v Phillips (No 2) [2019] NSWCA 268. The proceedings were an appeal from a decision of Justice Lindsay in Re MP's Statutory Will [2019] NSWSC 331. The applicant, although a relative of the person who had lost capacity (the Protected Person), would not necessarily have met the requirements to make a claim for provision against the Protected Person's estate after the Protected Person died. The applicant applied to the Court to make a statutory will. Without the court making a statutory will, it is unlikely the applicant would have received anything from the estate.

Prior to losing capacity, the Protected Person had engaged solicitors to prepare a will which bequeathed certain gifts to the applicant. That will was never finalised and executed. In fact, it appears that the Protected Person refused to execute that particular will. In the statutory will proposed by the applicant, the applicant was a significant beneficiary and the substantial residue was bequeathed to a charitable trust to be established.

At first instance, Justice Lindsay dismissed the application, finding that the Protected Person had not settled on any clear intention in relation to a will before she lost capacity. Reasons included the fact that the Protected Person had refused to sign a draft will, had refrained from signing any will and had been warned of the risks of intestacy (which would have meant that the Protected Person's two children would have inherited the whole estate).

The Court of Appeal disagreed, allowing the appeal, setting aside the orders made in the Court below and ordering that a statutory will be made in the form annexed to the judgement.

The Protected Person had become incapacitated suddenly after a stroke. The Court of Appeal stated that if the Protected Person knew she was about to lose capacity to make a will, it was unlikely that she would have wanted her estate distributed to her two children. According to the Court of Appeal, it is not necessarily what the person would be reasonably likely to have done if they had testamentary capacity, but what they would be reasonably likely to do if they knew they were about to lose testamentary capacity.

You may be able to apply to the Supreme Court for a statutory will on behalf of the family member who no longer has capacity. Such a will can only be made when the person is still alive.

Once the person passes away, there are very specific ways in which a will can be challenged, or a claim made on an estate, including the following (click through for further articles):

None of these may be applicable in a particular case and if a claim for a statutory will is not made, specific bequests that the person may have wished to make, such as gifts to charities or setting up special trusts for family members, will not be able to be made by a court following the person's death.

It is important that if an application for a statutory will is to be made, it is done urgently if the person who is the subject of the application is ill.

Making an application

There are a number of statutory prerequisites which must be satisfied before a court will make a statutory will:

the applicant needs to obtain the leave of the Court to make the application;
the applicant needs to provide the Court with the prescribed information, such as an estimate of the value of the estate and any available evidence regarding the person's wishes; and
the Court must be satisfied of a number of matters, including that the proposed will is or is reasonably likely to be one that would have been made by the person, if they had testamentary capacity.

If you would like more information on statutory wills or protected estates, please contact Snezana Vojvodic or Cherrie Homer.

The material in this article was correct at the time of publication and has been prepared for information purposes only. It should not be taken to be specific advice or be used in decision-making. All readers are advised to undertake their own research or to seek professional advice to keep abreast of any reforms and developments in the law. Brown Wright Stein Lawyers excludes all liability relating to relying on the information and ideas contained in this article.