Class 2 Readings PDF

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Chapters 3, 4, 5, 6 & 12 of the prescribed text (Certoma) Tihana Mandic, 'Family Provision Law in New South Wales: Celebrating its Centenary' (2017) 91 Australian Law Journal 769, 769-72 [the article can be found in the LLB 389 Subject Readings via Moodle] Anthony Gray, 'Family Provision Applications: A Critique' (2017) 91 Australian Law Journal 750, 750-68 [the article can be found in the LLB 389 Subject Readings via Moodle] Sally Bruce, 'Discretionary Testamentary Trusts' (2017) 44(4) Brief 32, 32-7 [the article can be found in the LLB 389 Subject Readings via Moodle] Darryl Browne, 'The Many Guises of Informal Wills' (2018) 50 Law Society of NSW Journal 88, 88-9 [the article can be found in the LLB 389 Subject Readings via Moodle] Michelle Painter, 'Court of Appeal Reins in Generous Family Provision Decisions in 2017' (2018) 43 Law Society of NSW Journal 71, 71-3 [the article can be found in the LLB 389 Subject Readings via Moodle] Amy Dale, 'Where There's a Will (There's a Legal Dispute), LSJ Online 30 October 2019 [the article can be found in the LLB 389 Subject Readings via Moodle]

Tihana Mandic, 'Family Provision Law in New South Wales: Celebrating its Centenary' (2017) 91Australian Law Journal 769, 769-72 [the article can be found in the LLB 389 Subject Readings via Moodle] -

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Just over 100 years ago, the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW) was enacted in New South Wales. It consisted of two parts, the first relating to what has become known as family provision law and the second relating to the guardianship of children.This article is limited to the former Although enacted in 1916, the Testator’s Family Maintenance and Guardianship of Infants Act 1916 (NSW) (TFM Act) applied retrospectively, encapsulating claims to be made on the estate of a person who had died on or after 7 October 1915 (s 3(1)), a date correlating with the introduction of the Testator’s Family Maintenance and Guardianship of Infants Bill (TFM Bill) into the Legislative Council. Its purpose was to ensure that, principally, a man provided for his wife and, to a lesser extent, his children – a purpose which was achieved by qualifying testamentary freedom The TFM Bill and its unsuccessful predecessors were criticised for limiting the right of a testator to do as he pleases with his own property, by empowering the court to make a seemingly arbitrary decision in awarding claimants a portion of the estate assets. Despite this, there was general consensus among parliamentarians that it was morally wrong for a husband not to provide his wife and children with property sufficient to maintain them. The issue was how this concept could satisfactorily be executed while at the same time maintaining testamentary freedom. Until 1836, widows were entitled to dower (use of one-third of the realty of their husbands’ estate).

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Dower was formally abolished in New South Wales by the Probate Act 1890 (NSW) which left widows and dependent children in a precarious and powerless situation if a husband chose to gift his estate to others. in 1903, there was a first attempt to enact legislation. It was made by Mr J Hughes on 24 September in the Legislative Council, but was defeated at its second reading.3 Among those who were opposed to its introduction was John Norton. He was a strong advocate for testator freedom Thirteen years later and following nine further attempts,5 the 1916 Bill was read for a second time in the Legislative Assembly on 3 August by the Attorney-General and Minister of Justice, Mr D R Hall. Another member, Mr Wright, objected to the Bill, and rather crassly, said: I have had considerable experience, and my belief is that many women would make better wives, and look better after their children, if they knew that it was in the power of the husband to leave his money somewhere else.7 This statement reflects the unfortunate thinking of many at this time despite the slow rise of women’s rights, and demonstrates the underlying subjugation that continued to be inflicted upon women. On 30 August 1916, the Bill was read for a second time in the Legislative Council by Mr J D Fitzgerald. The purpose was comprehensively expressed as being: [W]here a man or a woman has died leaving a will, and where under that will he or she has neglected to make adequate provision for the proper maintenance of the testator’s wife or husband and children, the court in its equitable jurisdiction may be invoked on behalf of the wife, husband, or child and the Equity Court may take all the circumstances into consideration and may make such order as it thinks fit for the maintenance of the dependents out of the estate of the testator Between the first attempt to introduce the TFM Act in New South Wales in 1903 and it receiving assent on 18 September 1916, similar legislation was enacted in Victoria in 1906,9 in Tasmania in 1912,10 and in Queensland in 1914. is freedom. The catalyst for the retrospective enactment of the TFM Act was the death of two men in early 1916: Francis James O’Neill and, ironically, given his firm stance against the TFM Bill, John Norton. Having had quite a prolific career as a solicitor, parliamentarian and newspaper owner, Norton left almost the entirety of his large estate to one child, Joan, excluding his wife Ada and his son Ezra. In divorce proceedings commenced by Ada in 1915, the court had held that her husband had been guilty of habitual cruelty, adultery and had been a habitual drunkard.12 He was later described as “the most flamboyant example of the larrikin-demagogue that Australia has known” In 2014, it was reported that “[w]hile the death rate in New South Wales has increased by about 10% over the past decade, fights over the family fortune rose by 59% between 2005 and 2013”.17 There may be several reasons behind this increase. Most obviously is the expansion of the categories of eligible persons who may make a claim on an estate. Where once it was thought that only children and spouses should have a right to claim against a parent’s or spouse’s estate, it is now accepted that the traditional family unit has changed, and others, whether related by blood or not, may be considered just as deserving. Nonetheless, the main claimants remain children and spouses. In 2015, approximately 63% of family provision matters that proceeded to a final hearing and for which judgment was delivered in the NSW Supreme Court, were applications by children. Claims made by a partner, including de facto, amounted to about 23% of family provision matters In conclusion, I refer to a speech delivered by the Family Provision List Judge of the NSW Supreme Court, Justice Philip Hallen, in 2015 relating to the 100-year anniversary of the family provision legislation. His Honour concluded his speech by raising a point of discussion

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as to whether audience members believed that the future should encompass a kind of “fixed shares” scheme whereby an estate, or portion of an estate, would be distributed according to a pre-determined arrangement. It is interesting to note that a similar concept of “set shares” was proposed by Sir Robert Stout in the late 19th century when rallying to introduce testator’s family maintenance laws in New Zealand.21 Did Sir Robert foresee the familial devastation and seemingly exponential increase in claims that lay ahead? Would such a scheme dramatically reduce the number of family provision claims? Should the distribution scheme that applies to intestate estates be applied to all estates? It is fitting to celebrate 100 years of family provision law in New South Wales, considering whether we should revert back to the basics, proposed 100 years earlier.

Sally Bruce, 'Discretionary Testamentary Trusts' (2017) 44(4) Brief 32, 32-7 [the article can be found in the LLB 389 Subject Readings via Moodle] What are the benefits of a discretionary testamentary trust? -

Asset protection The four step process There is a “four step process” in the assessment of property settlement claims, as follows: 1. identify and value the matrimonial property; 2. assess the respective contributions of the parties (both financial and non-financial); 3. consider whether an adjustment is required based on present and future means and the needs of the parties; 4. in light of the above, determine what order is just and equitable in all the circumstances

Lovine & Connor and Anor [2011] FamCA 432 Essex & Essex [2009] FamCAFC 236 Tax effectiveness -

Like inter vivos trusts, discretionary testamentary trusts are a useful tool for splitting income. However, unlike inter vivos trusts, income that is paid to or applied from a testamentary trust for the benefit of a minor is not subject to the penalty tax rates that normally apply to unearned income of minors under Division 6AA of the ITAA 1936. Rather, such income falls within the definition of “excepted trust income” under s102AG(2) of the ITAA 1936 and, subject to the anti-avoidance provisions such as those in s102AG(3) and (4), the ordinary marginal rates of tax apply.

Drafting issues Key offices and concepts -

A discretionary testamentary trust will generally involve these key offices and concepts: o Executor o primary beneficiary o potential beneficiaries o appointor o protector o trustee

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preservation age automatic disqualification of ineligible office bearers

Mandatory v optional Capital protected Control v asset protection Single or multiple trusts Social Security Time of creation

Darryl Browne, 'The Many Guises of Informal Wills' (2018) 50 Law Society of NSW Journal 88, 889 [the article can be found in the LLB 389 Subject Readings via Moodle] • An informal will may be found in almost any format and made in almost any manner. • A person seeking to establish intestacy should negate an informal will (as well as a will); an executor seeking probate should make reasonable enquiries and searches for an informal will. • A legal personal representative has a clear obligation to disclose a document which may be an informal will What is needed for an informal will? The expression ‘informal will’ is not found in the Succession Act 2006 but it is an accepted ‘shorthand’ reference to the ‘thing’ which a court may treat as a will pursuant to s 8 of the Act. Nevertheless, it is a misleading label, as an ‘informal will’ may not only be a will, but it could be a codicil or the opposite of a will, a revocation. There are four requirements for an informal will. It must be a ‘document’ as statutorily defined. Self-evidently, it must not be a properly executed will, codicil or revocation. The document must purport to state the deceased’s testamentary intentions. A good percentage of informal wills are suicide notes, or made in extremis, or isolation. These documents regularly lack ‘essential’ aspects of a will, like the appointment of an executor, or disposal of all assets. They routinely lack legal sophistication, and many seem to produce later construction suits to determine the meaning of the document’s contents. None of this is an impediment to the court deciding that the document states testamentary intentions. The fourth requirement is that the deceased must have intended the document to constitute a will, codicil or revocation. A file note made by the will-drafter’s clerk, which was unknown to the testator, could not constitute an informal will (Public Trustee v Bott [2017] TASSC 43). However, the fact that the deceased had never seen the document may not be fatal (In the matter of the estate of Nina Elzow (deceased) [2018] VSC 498). What is a document? The requirement that there be a ‘document’ challenges our conventional thinking about a will. A ‘document’ could be pretty-well anything. It is defined in s 21 Interpretation Act 1987 as ‘any record of information, and includes:

(a) anything on which there is writing, or (b) anything on which there are marks, figures, symbols or perforations having a meaning for persons qualified to interpret them, or (c) anything from which sounds, images or writings can be reproduced with or without the aid of anything else, or (d) a map, plan, drawing or photograph.’ Given the wide definition and construction, it is unsurprising that the contents of a cassette, a “Will.doc” (i.e. a Microsoft Word document) found in the hard drive of a computer, photographs, a video, a DVD, a mini tape recorder and a USB stick have been found to be a ‘document’. The document doesn’t have to be in English or made in Australia (Re Tang [2017] VSCA 171). What searches should be made In relation to an application for Letters of Administration, an applicant must satisfy the court that the deceased died without a will. Although that negative fact may be proved in other ways, it is usually established by showing that adequate searches for a will were unproductive. In this context, Mason and Handler Succession Law and Practice (NSW) suggests that adequate searches extend to the deceased’s ‘computers, mobile phones and other technology and recording equipment where the deceased may have stored a will (or document purporting to embody his or her testamentary intentions) or recorded its location’. So, it seems, an applicant seeking to establish intestacy should negative an informal will, as well as a will. What then of an executor seeking probate, where a will must already exist? What investigations, if any, should the executor make? The answer may depend on the executor’s knowledge of the deceased’s habits. An executor should not forbear searching for fear of what may be revealed. If the deceased had a practice of DIY activities, it would be prudent for the executor to make reasonable enquiries and searches for an informal will. What disclosure is needed The Court observed (at [15]) that it was ‘incumbent on [the applicant for letters of administration] and on her solicitor to have disclosed the document’. As made clear in Dickman v Holley; Estate of Simpson [2013] NSWSC 18 a legal personal representative, be it executor or administrator, who fails to disclose such a document may never escape personal liability even after distributing the estate with statutory notice of the intention to do so. In other words, a legal personal representative has a clear obligation to disclose a document which may be an informal will, even if there is legal advice suggesting it isn’t.

How is disclosure made? The relevant form of affidavit for an application for probate is form 118. Clause 1 reads: ‘The document dated (date) and signed in the margin by me and by the person before whom this affidavit is sworn is, I believe, the last will of (name), late of (place, occupation), the deceased, and I am not aware of the existence of any other document purporting to embody the testamentary intentions of the deceased [where applicable except for (specify document)].’ If the executor

considers that the document is likely to be an informal will, it should be disclosed in clause 1 following the words ‘except for’. Clause 15 states: ‘I am not aware of any circumstances which raise doubt as to my entitlement to a grant of probate of the will of the deceased [where applicable except for (specify matter)].’ If the executor considers that a document is unlikely to be an informal will, it should be disclosed in clause 15 after the words ‘except for’. If an informal will is being propounded, additional evidence should be filed relating to the existence of the three requirements for an informal will (other than the absence of formal execution). If the document is not propounded as an informal will, it may be prudent to include evidence dealing with the absence of one or more of the requirements. A similar approach is recommended with a form 119 affidavit in support of an application for administration. How is it dealt with by the court If the document is likely to be an informal will and effectively nominates an executor, or it is an alteration to a will where an executor is effectively nominated, the executor will make an application for a grant of probate. If the document is likely to be an informal will but it does not nominate an executor, or it is an alteration to a will where an executor is not effectively nominated, the application is for Letters of Administration with will annexed. If the document is likely to be a total revocation of the deceased’s last will, the application is for Letters of Administration (for an intestate estate). In each instance, if satisfied about the four requirements, the Court will make a declaration consistent with s 8 – i.e. that the document is the deceased’s will, alteration, or full or partial revocation of a will. If there is no contest about the document being an informal will, the application will usually be dealt with by the Probate Registrar after all relevant persons – whether adversely or positively affected by the document being an informal will - have been given notice of the application Michelle Painter, 'Court of Appeal Reins in Generous Family Provision Decisions in 2017' (2018) 43Law Society of NSW Journal 71, 71-3 [the article can be found in the LLB 389 Subject Readings via Moodle] • The NSW Court of Appeal recently overturned three generous first instance family provision awards, perhaps signalling a more structured approach to the judicial discretion in the Succession Act 2006 (NSW). • In Lodin v Lodin, the Court held that the factors relevant to whether a claimant is a ‘natural object of testamentary recognition’ must not be conflated with those relevant to whether an order for provision should be made. • In Sgro v Thompson, the Court held that the adequacy of provision in a will is not to be determined solely by reference to a claimant’s poor financial circumstances. • ‘Living together’ for the purpose of assessing eligibility based on a close personal relationship requires more than ‘repeat visits for a single purpose’, as established in Smoje v Forrester.

Amy Dale, 'Where There's a Will (There's a Legal Dispute), LSJ Online 30 October 2019 [the article can be found in the LLB 389 Subject Readings via Moodle] Where there’s a will (there’s a legal dispute)

Under the Succession Act 2006 (NSW)¸ spouses and children are automatically eligible to make a claim for provision in the deceased’s estate but pretty much anyone else is free to challenge it. The challenger must be able to successfully prove their moral claim, and that the deceased had a moral duty to ensure they were provided for.

NSW has the most generous estate provisions of all states and territories, especially when it comes to notional estates. In the case of insufficient funds in an estate, a court can look to assets that were gifted by the will-maker during their lifetime for less than market value, or those held in structures that were controlled by the now deceased. Examples could include jointly-held property or a superannuation death benefit. White says the findings concluded that “the balance needs to be struck” between allowing for adequate provision and negating claims from people who “even by very conservative estimates are financially comfortable”.

“It is a question of whether we are striking the right balance between testamentary freedom and providing for people who have a genuine need,” he tells LSJ.

“Our finding [of a 75 per cent success rate] raised the question of whether the framework, at that time, was too generous.”

But Wilson adds that wealth calculations are relative: “What some regard as comfortable others would regard as semi-poverty.”

Wilson also notes that some people believe the effort they made in caring for an elderly parent should be rewarded with a bigger slice of the estate pie.

“People cope with loss quite differently. A dispute over an estate can be a result of partly grief, partly anger, and the anger is often connected to things that have happened in the past,” she...