Written by Janine Foo.
Often people find estate planning confronting, daunting and potentially costly when consulting advice from a wills and estates lawyer.
Having a proper estate plan prepared on the advice of professionals can ensure your assets that you worked your entire life building are properly safeguarded and distributed in accordance with your intentions in a timely manner, upon your death.
A well thought out estate plan minimises the risk of your loved ones going through emotionally taxing legal proceedings, delays in receiving their provisions under your will and your estate paying significant legal costs that would diminish the value of your estate.
The Homemade Will and the consequence
In the case of Re Hely; Application by Arbuthnot & Donoghue [2018] VSC 614, Daryl Hely (“the deceased”) left an estate worth $25,043,551.57 and a Will dated 2 December 2016 with deficiencies that were prepared by and with the assistance of his daughter, who was not a lawyer and did not have any expertise in drafting Wills.
Sometime in late 2014, the deceased engaged a lawyer to prepare his Will. This Will comprised of seven testamentary trusts for his seven children, specific cash gifts to his grandchildren, capital gains tax and the distribution of the residuary estate.
The deficiencies in the Homemade Will
On 2 December 2016, without the assistant of a lawyer, the deceased crossed out clauses in his 2014 Will and told his daughter to simplify his will and type up a new one. Much to the detriment of all the beneficiaries in the deceased estate, the executor was unable to administer the estate until an application was made to the Victorian Supreme Court to rectify the Will. The following are the deficiencies in the deceased 2 December 2016 Will which the executors sought to be rectified with the Victorian Supreme Court:
- Seven testamentary trusts with no named beneficiaries;
- Cash gifts “up to a maximum of” a specified amount was ambiguous and the executors had no understanding of how much the cash gifts should be made out for;
- Capital gains tax liability was unequally distributed amongst the beneficiaries;
- Cash gifts made out to the grandchildren had vesting ages that were inconsistent between two clauses in the Will; and
- There was uncertainty on what formed part of the residuary estate.
The Take Away
The legal proceedings brought by the executors to rectify the 2 December 2016 Will was costly on the estate, caused extensive delay in the distribution of the estate to the beneficiaries, and unnecessary added stress to all parties involved. This could have all been avoided if proper legal advice was sought in putting together an estate plan.
At the end of the day, have a professional draft your will with your intentions can provide you with the peace of mind of knowing that your estate will be properly administered upon your death.
