Wills are not bullet proof:

While Mr Whitehouse had capacity and the will he made was professionally drafted and clearly expressed his wishes, its appropriateness is being disputed before the Supreme Court.

Fairness can depend on the eye of the beholder and when it comes to wills, the courts have had a role in considering the fairness of a will since around 1900.

The law allows the close family (spouse, defacto spouse, including a same sex partner, children and step children) and certain dependants of a will-maker to challenge a will on the basis that it does not provide for their ‘proper maintenance and support’.

‘Proper maintenance and support’ is a relative concept:

For most of us, a legacy of $500,000 would be the answer to a prayer but in multi-million dollar estates it may not be enough! The law takes the view that a different approach may apply. Provision (or extra provision) can be made for people whom others may regard as well off.

Privacy is not assured:

For many years, it has not been necessary for executors to file details of an estate’s assets where a grant of probate of a will has been sought.

However, as the Whitehouse case shows, once there is a dispute, all is revealed – not only the estate’s assets but the full financials of the applicants.

Wills may not say what needs to be said:

Explanations to family and friends and guidance to executors can often obviate concerns and uncertainty for those left behind. A Memorandum of Wishes or similar document is often an important adjunct to a will and facilitates a smooth, efficient administration of an estate.

Wills do not dispose of assets in a family trust:

Many will-makers during their lifetime control discretionary family trusts which may contain significant assets. In a traditional family trust whoever is or controls the trustee of the trust has the absolute discretion to distribute its income and capital to the beneficiaries . The trustee also has the responsibility to administer the trust, including arranging and changing its investments etc.

Wills may not determine the payout of superannuation:

This often significant asset is governed by the terms of the superannuation trust deed.

It may provide for your superannuation to be distributed at the sole discretion of the trustee.

Some superannuation funds allow members to nominate a person to receive their superannuation entitlements as a guide to the trustee. In others the nomination may be binding on the trustee of the fund.

Only when superannuation entitlements are paid into the estate of a deceased member does a will have relevance.
It follows that careful attention to the terms of the trust deed is always important. The will of the former controller may be of little if any relevance to the disposal of trust’s assets.

Will power is enhanced by proper planning and advice, but it has limits!
Dr John de Groot
Special Counsel