Thursday, 6 July 2017

Executors Commission changes

The right of Executors to charge commission for their services is currently regulated by the Administration and Probate Act 1958 (Vic), the Wills Act 19917 (Vic), The Legal Profession Uniform General Rules 2015 and relevant case law. In Walker & Ors v DÁlessandro [2015] VSC 15, the Court laid down some basic rules to be followed by a Practitioner seeking to take commission from the estate of a deceased person. These, in a nutshell, were that the Practitioner was obliged to provide details of work done to justify the commission separately from details of any charges for legal work, should advise all relevant parties of their right to have the Court review any sum claimed for commission and that the beneficiaries be advised of the desirability of obtaining independent legal advice.
The new Section 65A of the Administration and Probate Act gives the Court power to order the return of excessive commission to an estate upon the application of ANY interested person (including a creditor) and also to do so upon its own motion.
Newly added SS 65B and 65E  preclude commission unless the informed consent of all beneficiaries is provided in writing prior to the execution of the will but permit professional fees in the alternative.
Section 49A of the Wills Act similarly provides that a remuneration clause in a will is void unless the testator provided informed consent prior to the execution of the will.
Section 65C of the Administration and Probate Act permits an Executor to charge commission with the "informed"consent of the beneficiaries. See also Rule 12(4) of the Legal Profession General Conduct Rules in this regard.
Section 65D prescribes the information that must be provided when seeking to take fees and commission. The basis of remuneration, the method of calculation, the estimated value of the payment and the interested parties right to have the amount reviewed must all be disclosed. The information must be provided in writing, in plain English and must also be provided to the parent or guardian of any minor.
Transitional provisions stipulate that the new sections only affect wills signed after they commenced in 2016.

Monday, 3 July 2017

De Facto Step Children

Section 90 of the Administrarion and Probate Act defines those eligible to make a claim for further provision from the estate of a deceased person. "Eligible Person" includes "...a child of the deceased."
In a recent Supreme Court trial the Plaintiff was a child of a FORMER domestic partner of the deceased. The domestic relationship endured over 40 years until the Plaintiffs mother died about 15 years prior to the Testators death. After the Plaintiffs mother died the Testator entered into a new domestic relationship and left his entire estate to his new partner.
Associate Justice Derham found that the Plaintiff was an eligible person as that expression included stepchildren of the deceased and that status was maintained despite the death of the Plaintiffs mother prior to that of the testator.
The Defendant appealed this decision and the Court of Appeal dismissed the appeal affirming that the Plaintiff remained a Stepchild of the deceased. Scott-McKenzie v Bail [2017] VSCA 108

Sunday, 2 July 2017

Undue Influence on person making will

Proving that someone has exerted undue pressure on somebody making a will has become a little trickier than in the past. It is no longer sufficient to make untested allegations about someone's conduct, evidence of which can later be drawn out in crosss examination at trial. The Probate jurisdiction of the Supreme Court of Victoria now requires Practitioners to provide particulars of the undue influence at the interlocutory stage (prior to trial) so mere suspicion of conduct or circumstantial evidence will usually be insufficient. As the person who did the will is dead by this point in time, providing sufficient evidence is going to be quite problematic.
Previously the Court has been prepared to infer undue influence from certain extraneous factors. Not any more, at this stage. So beware caveating the will drawn at the request of a sibling by the siblings lawyer when some signs of dementia were evident. It may go to testamentary capacity but it won't clear the bar for coercion.
The 2017 Court of Appeal case of Montalto v Sala was an appeal from a decision of her Honour Justice McMillan striking out particular off undue influence by a caveator. The facts were alarming, at least to the writer, and would normally have been sufficient to displace the burden of proof. Justice McMillan found otherwise and struck out the particulars as inadequate. The Court of Appeal upheld the  trial judges finding. See Re Montalto [2016] VSC 266, [28]

Thursday, 29 June 2017

Leaving kids out of the will

Exclusion clauses in Wills are consistent with the long accepted principle of testamentary freedom in Victoria but are ill advised without good legal advice. The problem with an exclusion clause (in which a person making a will explains why he is leaving a certain person out) is the ease with which any reason or allegation, made against some one left out of a will, might refute the claims. It is a much better idea, if it is proposed to leave a family member out of a will, to instead collate and retain evidence of the behaviors and circumstances in which the omission is contextualised. Statements in the will makers hand can be problematic, as often inadmissible allegations and assertions are included. Edited statements signed by the will maker and revised regularly are perhaps a minimum requirement. Affidavit evidence would be even better.
The benefit of the separate evidence not contained in the will is that it can be used only if required and avoids any reference to the omitted person in the actual will itself, an error which, in and of itself, often invites a claim.
At the end of the day, no amount of evidence will protect an estate against a good claim by someone to whom the will maker is obviously obliged to make provision. Where this situation exists alternative approaches need to be considered. These approaches also have potential downsides.