The Importance of Explaining Your Testamentary Intentions

William John Morris v Ken Murray; Louise Vergis v Soula Morris [2014] NSWSC 756 (10 June 2014) In this matter, the deceased made statements in his Will as to why he wanted his estate distributed in a certain manner. While the Will was found to be unfair and the estate subject to redistribution, the judge did look to the deceased's statements to help determine the extent of the redistribution. The deceased, Arthur Morris, died in 2012. He had three children, being Louise, aged 54, William, aged 53 and Soula, aged 50. The deceased's last Will was created in 2007 and left an estate worth approximately $575,000 after all expenses were paid. The deceased left his children William and Louise $10,000 each, and appointed Soula as the executrix and provided her with the balance of the estate. William and Louise each brought Family Provision claims to challenge the Will because, under the circumstances, the deceased left an unfair Will. In his Will, the deceased stated that the reasoning behind his decision to distribute his estate in this manner was because:  
  • Soula had been living with him in his later years and cared for him,
  • He had made cash contributions to William and Louise during his lifetime, and
  • William and Louise had their own families and busy lives.
The circumstances of the deceased's three children at the time of their father's death can be summarised as follows: Louise
  • Formerly employed by Qantas but was made redundant in March 2013 and had not worked since then.
  • Married to her husband Jim for 37 years with three adult children, none of whom were still dependant on her.
  • Received a redundancy payment of approximately $60,000 and reportedly had about:-
  • $40,000 in the bank;
  • Superannuation of about $135,137
  • Qantas shares worth about $1,373.
Louise's husband Jim - self employed and earns about $42,000 as a Painter and Decorator. Louise and her husband:-
  • Own a car worth $13,000.
  • Own their own home at Prestons worth $450,000 less a mortgage of $155,000 and another house at Prospect valued at $370,000 with a mortgage of $275,000.
  • The monthly expenses of Louise and her husband are $6,421.
Louise has moderately severe health problems and mobility problems.  It is unlikely that she would be able to do any further work unless she had a desk job. William
  • Lived in the Gold Coast Hinterland in a unit worth about $230,000.00 subject to a mortgage of $92,750.00.
  • Earned about $1,300 per month as a self employed Marine Instructor.
  • Up until 2009 he was living in a de facto relationship with a lady who seems to have subsidised his living expenses.   He said that his monthly expenses exceed his income by about $300, and he was making up the shortfall by redrawing on his home loan.  This meant that his capital has increased in the last year from $82,000 to $92,750.
  • He was cross-examined as to whether he would be better off in salaried employment.   He did not agree.   However, the judge found that employment on the Gold Coast is not the easiest to obtain especially for a man in his early fifties, and reasoned that it was unlikely that William might earn more than he is earning at the moment.
Soula
  • Worked as a receptionist at the Randwick Labour Club at about $39,500 a year.
  • Was living apparently rent free since 2007 in the deceased's house but was paying rates and taxes and other expenses of the property.
  • Had her own car.
  • Expenses of $601 a week.
  • Debts of $37,000.00.
  • Unmarried with no current permanent boyfriend and not dependants.
  • Superannuation of about $300,000.00.
Since the creation of the deceased's Last Will and Testament, the financial circumstances of William and Louise had changed significantly, and they therefore each brought their own Family Provision claims to challenge their father's Will.  In their claims, William and Louise each asserted that given their current circumstances, their father's Will was unfair and did not provide for their proper maintenance or advancement in life.  The judge agreed. Unfortunately, each of the children expressed financial needs which, in total, exceeded the amount held in the estate.   Therefore, in order to determine how the estate should be redistributed, the judge looked to what a wise or just testator would do given the circumstances.  To achieve this, the judge looked to the statements made in the Will and noted the significance placed on Soula's contributions towards the deceased, and determined that prime consideration should be given to Soula.  Given his financial circumstances the next needy person was found to be Will and then Louise. Therefore, in order to ensure Soula had money to purchase her desired living accommodation, the judge found that her needs warranted about $375,000 from the estate.  From the remaining assets, the judge found that William should receive $115,000 to go towards his desire to pay off his mortgage and purchase a car with a little extra left over, and the rest should go to Louise, being approximately $85,000. In this case, despite the fact that the deceased made statements in his Will as to why he wanted his estate distributed in a certain way, the judge looked at all of the circumstances and determined that the Will was unfair.  However, in coming to his decision as to how to redistribute the estate to make the Will fair, the deceased's statements were given great significance.  This is why it is so important to explain your wishes in the Will itself or in a separate Statutory Declaration if there is a possibility that someone may find your Will unfair and seek to challenge the Will.

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