Introduction
When it comes to estate planning, making a valid will is essential to ensure that your assets are distributed according to your wishes after you pass away. However, there are situations where individuals are unable to create or update a will due to mental incapacity or other reasons. In such cases, statutory wills provide a legal framework to address these circumstances. This blog post aims to explain what statutory wills are, when they are appropriate, and provide references to the law in New South Wales.
Understanding Statutory Wills
A statutory will is a will created and approved by the court on behalf of a person who lacks the testamentary capacity to create their own will. These individuals include those suffering from cognitive impairment, mental illness, or those who have sustained severe brain injuries.
The purpose of statutory wills is to safeguard the interests of vulnerable individuals by allowing the Supreme Court to make decisions on their behalf regarding their estate distribution. This ensures that their assets are managed and distributed appropriately, taking into account their known wishes and best interests.
When Are Statutory Wills Appropriate?
A statutory will is only available when a person lacks the mental capacity required to create a valid will under normal circumstances.
They will be appropriate in one of two circumstances –
- They have a current Will that is inappropriate, or does not reflect their circumstances. Such a Will may have been prepared at a different stage in their life, and omit individuals who would they would intend to benefit from their estate (or include individuals they would not seek to benefit), or contemplate an assets in an estate that no longer exist.
- They have no valid Will and the distribution that would flow from intestacy is inappropriate.
In New South Wales, statutory wills are governed by the Succession Act 2006 (NSW) (the Act). Section 18 of the Act provides the Court with the power to make a statutory will or modify an existing will on behalf of a person who lacks testamentary capacity.
What is the process?
The process for making a statutory will is to commence proceedings in the Supreme Court. Evidence of the following matters needs to be prepared as it will be considered by the Court in determining if an statutory will should be made, and if so the terms of that will.
- Testamentary Capacity: The court will assess the person’s mental capacity and determine whether they lack the ability to make a valid will themselves. Medical reports and expert opinions may be considered to establish the person’s cognitive impairment or incapacity. This is a threshold issue. The Court cannot make a will for a person with capacity.
- Known Wishes: The court will consider any known wishes of the person regarding the distribution of their assets. This could be based on previous conversations, expressions of intent, or any documented evidence that reflects their desires for their estate.
- Current and Former Circumstances: The court will examine the person’s current and former circumstances, including their family and financial situation, as well as any changes that have occurred since their last will or the onset of their incapacity.
- Interests of Potential Beneficiaries: The court will take into account the interests and expectations of potential beneficiaries, such as spouses, children, dependents, or other individuals who may have a claim on the person’s estate.
- Moral Obligations: The court may consider any moral obligations or responsibilities that the person had or would likely have acknowledged if they were capable of making a will. This could include obligations to provide for certain individuals or fulfill charitable intentions.
- Professional Advice: The court may consider any professional advice obtained by the person, such as financial or legal advice, prior to their incapacity, as it may provide insight into their intentions and wishes.
- Other Relevant Factors: The court has the discretion to consider any other relevant factors that may arise during the proceedings, such as the person’s relationship dynamics, potential conflicts, or the impact of the proposed statutory will on the person’s estate and beneficiaries.
Conclusion
Statutory wills provide a valuable legal mechanism to ensure that individuals lacking testamentary capacity can have their estate distributed according to their best interests and known wishes. In New South Wales, the Succession Act 2006 outlines the provisions for statutory wills, empowering the court to create or modify wills on behalf of individuals who are unable to do so themselves.
If you or someone you know is in a situation where a statutory will may be appropriate, we are able to assist.