In New South Wales the Supreme Court has the power to make an order authorising a Will to be made, altered or revoked on behalf of a person who does not have testamentary capacity (the ability to make or change their own Will) in relation to the whole or part of the person’s property (‘Statutory Will’).
The Court may authorise a Statutory Will in a number of situations where the person concerned either has a Will which is unsatisfactory given all their circumstances or where he/she has no Will and they have either expressed an intention for their estate to be dealt with in a certain way or because of their circumstances the laws of intestacy would result in an undesirable outcome.
Types of applications have included:
(a) a person who once had capacity and has formed relationships, and who:
– had expressed their intentions in making a Will and even named their beneficiaries without documenting their intentions;
– had developed dementia and their personal circumstances had changed such that the laws of intestacy do not provide for the most appropriate people in the person’s life;
– had suffered a brain injury and is awarded a large compensation payment;
(b) a person who:
– has no direct family and who will die intestate resulting in their assets going to the State Government.
– has always had a severe intellectual impairment and may inherit a large sum of money from their family, but cannot manage their financial affairs or make appropriate life decisions.
Under the Succession Act (NSW) 2006 (‘the Act’) and subject to the Court granting special permission (leave), an application for orders approving a Statutory Will can be made by certain people including a relative, close friend or an appropriate person with an interest.
Under section 22 of the Act the Court must refuse the application unless it is satisfied that:
(a) the person concerned is suffering from incapacity;
(b) the proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity, and
(c) it is or may be appropriate for the order to be made, and
(d) the applicant for leave is an appropriate person to make the application, and
(e) adequate steps have been taken to allow representation, as the Court considers appropriate, of persons with a legitimate interest in the application, including persons who have reason to expect a gift or benefit from the estate of the person in relation to whom the order is sought.
The costs of the application are generally paid from the assets of the person for whom the Statutory Will is made. However, if an application is unsuccessful the costs of the application will be paid by the unsuccessful applicant.
The format and substance of a Statutory Will is generally the same as a regular Will made by a person with capacity, the difference being that the Will is authorised by the Court and signed by the Registrar of the Court and held by the Court.
At the time of the application in the case of Re Charles, ‘Charles’ was an 11 year old boy who had suffered brain damage at the age of 4 months allegedly from being shaken by one or both of his parents. He received $50,000.00 compensation under the Victim’s Compensation Scheme which was to be held in trust until he turned 18 years of age.
Given the allegations against the parents, Charles was taken from his parents and parental responsibility given to the Minister for Family and Community Services.
As Charles was only 11 years old, he did not have a Will. Under the laws of intestacy his parents, as the next of kin, would stand to inherit his estate if he were to die before them.
In the circumstances the Minister viewed this outcome as entirely inappropriate and made application under section 18 of the Act for authorisation of a Will on which Charles’s sister would benefit from his estate and in the event she did not survive Charles then for the estate to be divided between two charities for disabled children.
The court was satisfied Charles would never regain testamentary capacity and although his parents were notified, they chose not to intervene in the application. The court approved the application and the terms of the Statutory Will.