Family Provision for your Lover /girlfriend / ???

A recent decision of the Victorian Supreme Court, subsequently affirmed on appeal, gives great pause for thought to those of us who would choose to maintain a relationship with a lover alongside their marriage or with a married person. 
Malcolm Forsyth died suddenly of a heart attack aged 63. He left his share of  the family home which he had inherited from his parents, to his Brother. He was a single man but had commenced an intimate relationship with a married woman in 1992. After Malcolm's death, his lover claimed that even though she was already married, she and Malcolm had made a "life long" commitment to each other and had decided to spend as much time together as they could and that they would get married when they could.
Malcolm was, of course dead by this time, so this evidence is always difficult to controvert.
The facts were that they never married (she in fact remained living with her Husband for most of the relationship), they maintained separate homes, were each financially independent and kept their relationship hidden from some family members.
Numerous offers of settlement were made to Malcolm's lover none of which were accepted.
His Honour Mr. Justice Harper decided to award half of Malcolm's estate to his lover on the basis that she was someone that Malcolm had an obligation to provide for from the proceeds of his estate. Whilst some concern was expressed by one of the Judges on appeal about the decision being "at the margin" the decision was upheld on appeal.
Thus the family home no doubt, together with several hundred thousand dollars in legal costs,  disappeared out of the fortunes of the Forsyth dynasty forever.
Rest in Peace Malcolm
For practitioners the appeal provides a most interesting examination of the admissibility and confidentiality of discussions at mediation, in the light of SS 24A of the Supreme Court Act and 131(1) of the evidence Act.
See - Forsyth -v- Sinclair [2010] VSCA  195

Storage of wills, Lost Wills, Destruction of a will, Probating a copy of a will

Athena Yiossis made a will in 1995. She left everything to her three children but created a life interest enabling her autistic Son Rakesh to remain in her home until he died. Unfortunately no-one actually thought to take out probate of the will and when one of her Sons finally checked in 2006 they found the home still in the deceased's name alone. Everyone knew that a will had been made but unfortunately the original will and the title to the house had apparently both suffered the same fate. Both originals had been kept in the family home where the autistic boy, with a proclivity for disposing of paperwork he saw as useless, lived alone. Apparently "Rakesh"  had inadvertently  thrown the original title and will out in the rubbish some years after his Mother passed away. Fortunately the solicitor who made the will had retained a "marked up" copy which was presented to the probate office earlier this year. The probate office in South Australia was not prepared to grant probate of the copy and referred the matter instead to a judge in the Supreme Court in that State.

The applicable Probate Rules in South Australia are similar to those in Victoria and state that such a copy may be admitted to proof provided it is supported by affidavits as to:-
(a) The original will having been properly signed and witnessed.
(b) The existence of the will after the death of the testator or such evidence as will rebut the presumption that the will was revoked by having been destroyed AND;
(c) the accuracy of the copy will or other evidence of the contents of the will.

Complicating the Courts task in this case was the fact that the deceased was still married to her third Husband from whom she had separated in 1984. Evidence was led that satisfied the Court regarding the long separation of the parties and the fact that the third Husband was probably dead.
In the event the Court was satisfied that the copy was a complete and accurate copy of the will and that it had been duly executed and had not been revoked by the deceased before she died. The copy was admitted to probate and Rakesh was safe to stay living in mum's house until his death.

Infants as beneficiaries. Selling property. Trustee Act 1958

A decision was handed down in an interesting case in the South Australian Supreme Court last week. A deceased person had left his estate to his Sons and an infant Grandchild. The Court was approached for permission to sell the property pursuant to Section 63 the South Australian Administration and Probate Act which contains similar  terms to the provisions in the Victorian Trustee Act. The Court is empowered to order that property in a deceased person's estate be sold in any case in which the Court considers that the sale would be for the benefit of  any infant entitled to the property. Most cases turn on whether the sale will actually be for the benefit of the infant concerned or not and it is up to the applicant to demonstrate that it will be for their benefit. Often, the difficulty in maintaining a low income generating property for many years, coupled with capital gains tax problems and the pressing financial needs of the infant will mitigate in favour of such an order being made.
In this case ( In the Estate of John Davi (Deceased) [2011] SASC 95 ) the Court found that the proposed sale of the real estate property in Kensington Park was for the benefit of the infant concerned and exercised its discretion to order the sale accordingly.
Selling and distributing  property prior an infant attaining the age of 18 years may be worth considering in certain limited circumstances where it can be clearly shown to be for the benefit of the infant concerned.

Charitable Trusts

Charitable Trusts are increasingly featured in wills prepared for clients whose immediate family are already well off or have no immediate family they would wish to benefit. Most Charities run websites giving accurate information regarding the wording of any bequest but you should still consult a lawyer to get this right. I act as the Trustee of various Charitable Trusts and recently had the great pleasure of presenting our local Chewton Football club with new tops for every team for the 2011 season, on behalf of the Frank P. Carpenter Charitable trust.

Benefitting a religion or race in your will

A case running in the Supreme Court in Queensland at the moment will decide whether, at least in that State, it is permissible to exclude a particular race or religion from a charitable bequest in your will.
Abraham Werner, who died in 1989 with no children, left some $700,000.00 to a charitable trust to educate "Non-Muslim" orphans.
After running the trust on this basis for some ten years, the Victorian Equal Opportunity Commission has now become involved and maintains that "...while grants and awards may target particular communities, they are not, by law, allowed to prescribe exclusion based on race, religion or ethnicity..."
Perpetual Trustees, the Trustees of the Trust,  have only been able to distribute some $230,000.00 from the charitable trust because it is illegal in some states to advertise for applications from "Non-Muslims".
They have not been able to distribute any monies since 2005.
Great care needs to be taken in targeting any bequest in your will so as not to inadvertently infringe State or Federal anti discrimination provisions.

Power of attorney to children

This post is further to my recent post about joint and several attorneys.
A recent survey of 410 Victorians aged from 65 to 100 years old, conducted by Monash University, revealed some interesting statistics. Of the group surveyed some 280 participants had executed a power of  attorney.  Of these, some 170 had appointed one or more children to look after their financial affairs. The others had appointed their spouse or other family members.
Only 5% of the survey group had elected to appoint a professional  person to fulfil this role.
Interestingly the survey also revealed the perception, amongst those canvassed,  that financial abuse of the elderly was not common in the community.
Clearly some work needs to be done to address this incorrect perception and to formulate strategies to protect the elderly from this common type of abuse.
For further information in relation to the survey go to http://www.statetrustees.com.au/ who originally commissioned the survey.

Power of attorney. To appoint or not to appoint ?

Stavro Haralambopoulos was a very wealthy man by the time he began to overlook payment of various  utility and other accounts. When he was finally cajoled into making out a power of attorney he made a bad choice which not only resulted in none of his accounts being paid,  but in the systematic diminution (by theft) of his assets by over half their value. Stavros appointed his Son Con and his Wife Leanne as his attorneys.
Leanne was the slutty Australian girl that Con had married against the wishes of his parents, Brothers and Sisters, who could not understand why Con would not find a suitable Greek girl for marriage. Now, normally I would have absolutely nothing against a slutty Australian girl, but in this instance she did let the team down.
You see, Stavros, when he made out his Power of Attorney, overlooked the fact that his life long Solicitor had inserted the words "Jointly and Severally" into the actual appointment. This meant, of course, that Leanne could sidle off and unilaterally sign cheques, draw funds and sell property without consulting her Husband, or Stavros for that matter.
She began slowly and cautiously, simply paying the odd account of her own so that it would be difficult to tell, upon a cursory examination of the accounts, whether it was one of Stavros' bills or not. Over time she became hugely emboldened, writing out cheques directly to herself, to her children, buying a a new car, televisions and so on. When it was obvious that absolutely no-one was watching she actually gifted some real estate property to her daughter Voula who began erecting a house on the land. Other family members noticed this activity and started asking inconvenient questions.
Leanne's ship had finally hit the sand.
Are the police interested ? Not really, " it was all done strictly on Stavros' own instructions"  you see.
Can we get the money back ?  Yeah right.
Can Stavros amend his will to rectify the situation ? No, his condition has deteriorated into full blown dementia by now.
Hopefully Con and Leanne can be convinced to waive any further entitlement to their Fathers estate, but this remains to be seen.
The moral to the story? Appoint a sole attorney or joint and several attorneys only in rare and exceptional circumstances. Remember Joint AND Several means just that.