What is a Statutory Will?
A Statutory Will is one that is made by the Supreme Court on behalf of a person who lacks capacity to make their own will. In Tasmania, a Statutory Will may also be made in some circumstances by the Guardianship and Administration Board.
Statutory Wills are also referred to as ‘court-authorised wills’ or ‘court-made wills’. They are a relatively new development in Australia, since the relevant laws were introduced over the period from 1996 to 2010.
Court applications for Statutory Wills are on the increase, and it is likely that the trend will continue, given the ageing population in Australia and the number of people living with dementia.
When may a Statutory Will be needed?
There is a wide range of possible scenarios. For example:
- A person has dementia, and it is clear that their existing will is out of date and needs to be updated, but they lack the necessary capacity to make their own will.
- A person suffers an injury at birth, and receives a large compensation award. If a Statutory Will is not made, their estate will pass according to the laws of intestacy, which might not be appropriate in their particular case. The child’s parents may have separated, and only one parent has acted as the child’s care-giver for a number of years.
- A person’s existing will includes a gift of their house to a particular beneficiary, but the person has since moved into a nursing home and the house has been sold. Depending on the laws in the particular State or Territory, this gift may fail to take effect, and the named beneficiary may not receive any compensation for the loss of the gift.
- There is some technical defect in a person’s will, which will prevent it operating in the way they intended.
- A person has a will but it could be structured in a more tax-efficient way, to reduce the overall tax burden.
These are just some examples. The particular facts of each case require careful review by a legal specialist, in order to determine whether it is worthwhile embarking on the process of applying for a Statutory Will.
Who can apply?
Any person may make an application for a Statutory Will on behalf of another person. However, the applicant must satisfy the Court that they are an appropriate person to make the application.
Statutory Will applications are commonly made by a family member (such as a parent, child, or other relative of the person). But this is not essential. An application could, in appropriate circumstances, be made by a wide range of persons, for example:
- Someone who has a close connection with the person, such as a friend or carer
- Someone who has formal authority to act for the person, such as an attorney (under an enduring power of attorney), administrator or guardian
- The person’s lawyer, accountant or financial adviser
A person who stands to benefit under the proposed will is not disqualified from making the application, although the Court will need to be satisfied that they are an appropriate applicant.
In many cases, there may be several persons who could potentially act as the applicant. It is important to seek legal advice, to identify the appropriate person to make the application.
The process involved
In all States and Territories except Western Australia, Victoria (from 1 January 2015) and Tasmania (in respect of applications made to the Guardianship and Administration Board only), there is a two-stage approach. At the first stage, the leave (permission) of the Court must be obtained to make the application. If leave is obtained, the Court then hears the ‘main’ application. This two-stage approach is designed to prevent an application going ahead if it is unlikely to succeed.
Various information needs to be put before the Court, such as:
- Evidence that the person lacks testamentary capacity, and details of whether they might be likely to gain or regain capacity in the future
- A reasonable estimate of the size and nature of their estate
- A draft of the proposed will
- Any available evidence regarding the person’s wishes
- Details of who might be entitled to their estate, if they die without making a will
- Details of whether a family provision claim might be likely, following the person’s death
- Any available evidence regarding the circumstances of anyone whom the person might reasonably be expected to provide for in their will
- Details of whether the person might reasonably be expected to include in their will any gift to charity
There is a ‘core test’ that must be met, in every case. Broadly speaking, the Court needs to be satisfied that the proposed will is one that the proposed testator, if he or she had testamentary capacity, would likely have made. The specific wording of the ‘core test’ varies from State to State. For example, in New South Wales, the Court must be satisfied that ‘the proposed will … is or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity’.
There are also various technical procedural requirements that must be complied with. It is therefore usual to have a lawyer prepare the application and present it in Court.
If the Statutory Will application is successful, the Court will usually order that the legal costs of the application are to be paid out of the person’s assets, although this is not always the case. Before a Statutory Will application is commenced, specific legal advice should be obtained concerning costs, including what the costs position will be if the application is not successful.
Finding out more
Richard Williams and Sam McCullough are each available to provide specialist advice on Statutory Will applications.