The purpose of drafting a will is to ensure that your assets are distributed according to your wishes when you pass away. As such wills and estate planning may appear straightforward particularly since will kits can be purchased from your local newsagent; However, these do it yourself (DIY) wills may result in legal issues being overlooked with unforeseen or unintended results. Such results may lead to costly, stressful and complicated disputes which could have been avoided had the will maker obtained professional advice.
A recent example of a will which had unintended consequences is the case of Masci v Masci [2015] QCA 245. The facts of the case can be summarised as follows:
- Mr and Mrs Masci had no children together, but both had children from earlier relationships;
- Together they drafted a joint will which essentially provided that:
- one of Mr Masci’s children and one of Mrs Masci’s children were appointed as joint executors;
- the survivor of them to live in the family home until their death; and
- the distribution of the assets on the death of the survivor, so that Mr Masci’s children would receive 50% of the assets and Mrs Masci’s children would receive the other 50%.
- On 7 February 2012 Mr Masci passed away;
- following Mr Masci’s death Mrs Masci sold the family home on the basis that the home was owned as joint tenants and as such she automatically became the sole owner of the property on Mr Masci’s death; and
- Aside from the sale of the family home, disputes also arose surrounding the terms of the will and the intention of the parties.
To resolve these disputes, the Court had to decide whether Mr and Mrs Masci intended to:
- make a mutual will and create a binding contract between themselves not to change their wills; and
- sever the joint tenancy of their house, with the effect that they would own the property as tenants in common and that their interest would form part of their estate and accordingly be dealt with under their will.
The Court held that there was an intention to create a mutual will, and that the joint tenancy had been severed. This meant that Mrs Masci did not inherit Mr Masci’s interest in the family home automatically, and Mr Masci’s interest was required to be dealt with under the terms of the joint will.
This proceeding resulted in two court cases spanning three and half years and costly legal fees all because Mr and Mrs Masci in drafting their wills did not take into account the effect of death on the joint-ownership of the family house.
In another recent case, Yu v Yu & Ors [2015] QSC 373 and following on from the decision in Re Yu [2013] QSC 322, which found that Mr Yu’s will consisted of a series of notes stored on an iphone, the court was required to determine whether $259,000 in insurance proceeds fell within Mr Yu’s ambiguous use of the word “cash”. If these insurance proceeds were cash it would form part of the remainder of the cash to be divided amongst the five beneficiaries; however if it was not cash it formed a part of the residue which was left to the executor. The court ultimately found that the $259,000 was not cash and therefore were not available for distribution to the five beneficiaries.
The lesson to be learnt from Mr Yu’s case is that the price of having a professionally drafted will is minor when compared with the many thousands of dollars that were likely expended by the parties in bringing the two applications to Queensland Supreme Court, the delay in finalising his estate and possibly the unintended consequence of Mr Yu not considering the distribution of his life insurance and superannuation funds.
Other issues which arise in DIY estate planning commonly include:
- inappropriate executors ;
- ambiguous terms;
- provision for pets rather than leaving the pet to a caretaker;
- putting impractical or onerous conditions before a beneficiary can receive their inheritance;
- incorporating provisions dealing with life support and care whilst in a coma;
- incorrect or non-existent provision for distribution of super and the transfer of powers as appointor under a trust deed;
- incorrect execution and witnessing of the will; and
- failures to consider issues with jointly held assets and their distribution;
As lawyers, we can guide and assist you in making your will and in dealing with difficult and complicated decisions to help avoid disputes and expensive court proceedings.
If you are interested in either having your estate plan reviewed or would like to make a will please contact us.
