Testamentary capacity and the importance of an accurate medical report

Posted by: Richard Thompson

Lessons learnt from Konui v Tasi & Anor [2015] QSC 074

 

On a daily basis, hundreds of lawyers around the State are instructed by clients to prepare new Wills.  When obtaining instructions and witnessing these testamentary documents, lawyers are under a strict duty to ensure that in their mind the client has "capacity".  That is, that the individual has the requisite understanding of the nature and effect of entering into the document.

It is not uncommon for solicitors acting for a client who has health conditions to seek medical opinion regarding the client's testamentary capacity.  Obtaining a medical report is important evidence in the event the Court is asked to determine whether the client had the requisite capacity when signing a Will or Codicil.

In the recent Supreme Court case of Konui v Tasi & Anor [2015] QSC 074 the Court considered a report given by the Testator's treating doctor in determining whether the deceased had capacity two days prior to death when an informal Will was signed.

Where a valid formal Will exists, there is a presumption that the Testator had testamentary capacity. Therefore the onus is on the party attempting to prove that the Testator did not have the capacity to sign the Will.  Justice Boddice in the Konui case made an important distinction to this presumption when His Honour at 43 said:

"The onus of proving testamentary capacity where there is an informal Will lies on the party seeking to convince the court the deceased intended the informal document to constitute his or her Will"

This essentially reverses the usual presumption of testamentary capacity and makes it critical for the party making the application for the validity of the informal Will to provide the Court with the necessary evidence, such as a medical report from the presiding doctor.

The doctor in Konui formed the professional opinion that the deceased did have capacity on the day of signing the purported Will.  However, it became clear through the course of the trial that that the doctor provided the opinion without the knowledge that the deceased had access to a patient controlled opioid for pain relief. 

The Court found it inconceivable that the deceased had not accessed the drug, which in turn could have caused the deceased to become drowsy and adversely affect short term memory.

Although the doctor maintained that the deceased was lucid throughout the day of signing the purported testamentary document, the Court did not accept the doctor's opinion and ultimately found that the deceased did not have the required capacity when signing the informal Will.  This meant that the Will was not valid and the Testator's wishes expressed in that document would not be followed.

Whilst there was additional evidence that the Court considered when reaching this decision, it is interesting to consider whether the Court would have found differently had the doctor provided the report after properly considering the deceased's access to the analgesia.

The lesson learnt from the Konui case is to ensure a doctor has properly considered all medical aspects of the client before making their assessment and providing a capacity report.  This will greatly assist upholding the last wishes of a client should the matter be decided by the Court.

Do you need your Will reviewed or updated? For a free, no obligation, review of your current succession plan, please contact our Succession Law team.

Do you have concerns about the capacity of an individual when they signed a Will? For a free, no obligation meeting to discuss further, please contact our Estate Litigation team.

Richard Thompson, Lawyer, is part of Anderssen Lawyers' Succession Law and Estate Litigation teams. Richard can be contacted on (07) 3234 3113 or richard@anderssens.com.au.

New Lawyer (with familiar surname) Joins the Firm

Posted by: Scott Thompson

We are pleased to announce that Richard Thompson has joined the firm. Richard has 5 years post admission experience in private practice and will be engaged across all areas of the firm, working closely with our senior lawyers. Scott Thompson, Managing Director is delighted to have his son, a 3rd generation lawyer, as a colleague. Richard is married to wife Lisa, father to 14 month old Teddy and lives on the north coast. Working both from the office and remotely, he will be taking advantage of the work/life balance Anderssens offer. Richard is a keen triathlete, having achieved many outstanding results over the years, such as winning the Hawaii Ironman World Championship (18-24 age group). Click here for Richard's Page.

Time Running Out to Lodge a Superseded Development Application to BCC

Posted by: Megan Tilbrook

Over the last couple of months we have had clients inform us about the impact the changes from City Plan 2000 to City Plan 2014 have had on their land. For those who have sites where the changes have had a negative impact on the development potential we have considered in consultation with our clients and their team of experts whether it would be appropriate for a request to be made to apply the superseded planning scheme to a development application.

Section 95 of the Sustainable Planning Act 2009 allows a request to be made to the council to apply the provisions of City Plan 2000 to assessable development. Any request however must be made within 12 months of the new scheme coming into effect - that is the request must be made by 30 June 2015.
If the council decides to refuse to apply the superseded scheme there are some circumstances where compensation can be claimed for the reduction in the value of the land. To have the ability to claim compensation however it is essential that a request be made to apply the old scheme first.

If you have any concerns about the impact City Plan 2014 has had on your land you must take action prior to 30 June 2015, or your rights will be lost forever.

Anderssen Lawyers Case Study Series - Case Study 1: Do you really need a Binding Death Benefit Nomination?

Posted by: Kylie Wilson

The recent Supreme Court decision in Munro v Munro [2015] QSC 61 highlighted again the consequences of invalid Binding Death Benefit Nominations that are not prepared in accordance with the terms of the Trust Deed of the relevant Self Managed Superannuation Fund.
http://archive.sclqld.org.au/qjudgment/2015/QSC15-061.pdf
 
It is timely therefore to consider whether or not a Binding Death Benefit Nomination should be put in place at all. It is all too common for Binding Death Benefit Nominations to be signed by clients with the documents that establish their SMSF. However, in our view, no Binding Death Benefit Nomination should be prepared for a client unless it is prepared as part of the overall estate planning strategy for the client.
 
Below are two different case studies to highlight the issues that need to be considered when determining whether or not a Binding Death Benefit Nomination should be put in place.

• Jack and Jill are married with three children. Jack has been running his own plumbing business but has never given much thought to asset protection. He runs the business as a sole trader in his own name.
• Jill is killed in a car accident and at that time Jack is being sued for negligence as a consequence of some faulty plumbing work. Jack and Jill have their own SMSF and when their SMSF was established they signed valid Binding Death Benefit Nominations to direct each other's death benefit 100% to their spouse.
• The Binding Death Benefit Nomination directs Jill's superannuation death benefit directly to Jack where it will be an asset available to be accessed by creditors. Without the Binding Death Benefit Nomination the Trustee of the Self Managed Superannuation Fund (Jack or a corporate trustee of which Jack is a director) would have retained discretion to direct the death benefit away from Jack where it was not accessible by creditors.

The above case studied can be compared and contrasted with the following case study:

• Bob is a lawyer and decides to do his own Binding Death Benefit Nomination without reviewing the terms of the Trust Deed for his Self Managed Superannuation Fund.
• Bob and his second wife Wendy are both directors of the corporate trustee of the Self Managed Superannuation Fund. 
• Bob's binding death benefit nomination directs his death benefit to the children of his first marriage. However, the trust deed for his Self Managed Superannuation Fund provides that Death Benefit Nominations are not binding on the trustee.
• On Bob's death Wendy becomes the sole director of the corporate trustee of the Self Managed Superannuation Fund, and elects not to pay out the death benefit to Bob's children from his first marriage, contrary to the Binding death benefit direction.

The above case studies are designed to highlight some of the reasons why Binding Death Benefit Nominations need to be considered carefully. It should be ensured before such a document is signed that:

1. There is a reason it should be put in place;
2. If it should be put in place that it directs the death benefit to go where the client actually wants it to go; and
3. It is valid and enforceable.

Are there any black sheep in your family?

Posted by: Valerie Chagnon-Couture

In Queensland, a spouse, child or dependant of a deceased person can make an application to the Court for a share of a deceased person's estate on the basis that adequate provision for the applicant's maintenance and support was not made. This is known as a Family Provision Application. A child for these purposes includes a biological child, a stepchild and/or an adopted child. Foster children may also have a claim in certain circumstances. 

Written notice of the intention to claim against the estate must be given to the executors or administrators of the estate within 6 months of the date of death. An application must then be commenced within 9 months of the date of death. It is important to note that the estate should not be distributed by the executors within 6 months of the date of death or executors can be personally liable if a claim is made against the estate.

Where a claim is made against an estate, some aspects the Court will consider include:

1. The size and nature of the deceased person's estate;
2. Whether the deceased had any obligations or responsibilities to applicant;
3. The applicant's financial position, needs, age, health and future prospects;
4. The relationship between applicant and deceased;
5. Whether provisions were made for the applicant during the deceased's lifetime;
6. The deceased's testamentary intentions (memorandum of wishes, letters, etc); and
7. The financial position, age, health and future prospects of the beneficiaries named in the Will.

In the majority of cases decided by the Courts in Queensland, the estate has had to bear the legal costs of both the estate and the claimants against the estate, even where a claimant is unsuccessful in his/her claim. However, some recent cases have seen the Court order unsuccessful applicants to pay the costs of the executor and the separately represented beneficiaries. It remains to be seen whether the Courts will continue this trend in relation to the legal costs of unsuccessful applicants but it does mean many applicants will need to consider the possible legal costs of an unsuccessful claim when making a Family Provision Application.

For further information on family provision applications or for advice on how to protect your estate against such applications, please contact our succession team.

 

 

Agribusiness Monthly

Posted By: Kylie Wilson

The Agribusiness Monthly provides timely information and analysis on agricultural conditions, commodity price updates and commentary on the latest sectoral trends and developments. 

To read the article, CLICK HERE.
 

Legal Alert Is your Superannuation death benefit going where you want it to after your death?

Posted by: Kylie Wilson

On the 25^th of March 2015 the Supreme Court of Queensland delivered a Judgement in the matter of Munro & Anor v Munro & Anor [2015] QSC 61.

The Court declared that a Binding Death Benefit Nomination form signed by Barry Munro was not binding because it did not comply with the terms of the trust deed for the Barry and Suzie Super Fund. 

This meant that the trustees of the Barry and Suzie Super Fund after Barry Munro's death were able to distribute Barry's death benefit at their discretion and not in accordance with the binding death benefit nomination form that had been signed by Barry John Munro on 22 September 2009.

Interestingly, the Court distinguished the well-known case of Donovan v Donovan by determining that although the relevant clause of the trust deed required that a binding nomination comply with the "Relevant Requirements" this did not require the Binding Death Benefit Nomination to comply with Regulation 6.17A of the Superannuation Industry (Supervision) Regulations.  The Court also confirmed that Regulation 6.17A does not apply to Self Managed Superannuation Funds unless the trust deed for the Fund requires that a BDBN comply with that regulation.

Notwithstanding this, Mr Munro's Binding Death Benefit Nomination form directed his death benefit to be paid to "Trustee of my Estate" and the Court determined that this nomination did not comply with the relevant clause of the trust deed for the Self Managed Superannuation Fund as this was not a nomination of either Mr Munro's executors under his Will or any of his "nominated dependants" and was therefore not a binding nomination for the purpose of the relevant clause in the trust deed. 

The case highlights again the importance of ensuring that a Binding Death Benefit Nomination is in fact binding in accordance with the terms of the trust deed of your SMSF if you wish to ensure that your death benefits are to be paid in accordance with that Binding Death Benefit Nomination.