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Is it too late to change a Will after dementia or disability?

Most people understand the importance of having a valid Will. A Will names the executor of your estate, distributes your assets on your death, appoints who will take care of your children and shares your personal wishes.

What Makes a Will Valid?

Generally, the person making the Will must be over the age of 18 years and must have testamentary capacity.

Put simply testamentary capacity is a legal term used to describe a person’s legal and mental ability to make a valid will.

But what happens when changes in circumstances (such as old age, accidents or disabilities) result in the testator (the person who makes a Will) being unable to make a will or update their Will? Things can then get complicated, especially when relationships break down, and it can become very difficult to say whether the testator would actually want what is documented in their original Will to take place (if they even have one).

All is not lost though, as it is possible, in certain circumstances, for the Supreme Court to make a Will, alter an existing Will or revoke the whole or part of an existing Will for a person, even if that person is under the age of 18 years and/or does not have testamentary capacity.  These are called ‘Statutory Wills’.

How Can A Will be Changed After Dementia or Disability?

The Supreme Court can make a Will, alter an existing Will or revoke the whole or part of an existing Will for a person if:

  1. The relevant person lacks testamentary capacity; and
  2. The person is alive when the Order is made.

To make the Order the Court must be satisfied that the person does not have testamentary capacity and that the proposed Will, alteration or revocation is one that the person would make if the person did have capacity.

Following are some recent decisions by the Court where Orders were made:

Case 1: Matsis; Charalambous v & ORS

Matsis was 90 years old and had amassed a fortune in excess of $13M. He had executed a basic Will leaving his entire Estate to his Wife.

If his wife predeceased (died before) him, Matsis gifted his family home to a grandson and the remainder of his Estate equally between all three of his grandsons. At the time the Will was prepared, Testamentary Trusts for his grandsons were discussed for asset protection and valid tax planning reasons.

A testamentary trust provides a greater level of control over the distribution of assets to beneficiaries, contains provisions for protection of assets and can have significant tax advantages.

Matsis’ wife died and shortly after his mental health began to decline due to dementia. Testamentary capacity was lost and not regained and Matsis’ physical health began to rapidly decline after he broke his hip.

Two of Matsis’ grandsons were now engaged in businesses carrying a high degree of financial risk making Testamentary Trusts highly desirable. One of the grandsons successfully applied to the Court to amend the Will to provide for the inclusion of Testamentary Trusts.

Case 2: RKC v JNS

A girl who was 12 years old at the time of the Application to the Court (to make Will for her) had been delivered by caesarean section due to foetal distress. She suffered from severe spastic quadriplegic cerebral palsy as a result. This, combined with other conditions, resulted in severe retardation. As a result of the personal injuries action, the girl received a damages payout of $1.37M.

The girl lived with and was cared for by her mother and maternal grandmother. Her relationship with her father was poor and he did not financially contribute to her wellbeing. The girl had no capacity, no likelihood of gaining capacity and there was no direct evidence of her wishes as she had little to no ability to understand or communicate her wishes.

The girl’s mother successfully applied to the Court for a Will to be made for her daughter so that the Intestacy Laws did not apply (if they did the girl’s estate would have been divided equally between her parents). The Will that the Court approved made gifts for the girl’s mother and other family members as substitute beneficiaries. The father was excluded.

Case 3: ADT v LRT

A dying Alzheimer’s sufferer did not have capacity to change her Will. Her current Will gifted $5M to her son who was undergoing a divorce dispute. Therefore if the mother died the inheritance could be factored into the divorce settlement. The son argued that his mother wanted the assets to remain in the family and if she had capacity she would change her Will to include Testamentary Trusts to protect them from his divorce.

The estranged spouse argued that the son limited his decision to work throughout their marriage based on his expectation to receive this inheritance which substantially reduced the size of their marital pool of assets. The Court authorised the inclusion of the Testamentary Trusts in the Will.

What can we learn from this?

In each of these cases the applicants were successful in obtaining Orders from the Court making or varying wills to include terms that were logical and made sense.   The Court has therefore shown that it will take a common sense approach to making Staturoy Wills and that you always have options.

The passing of a loved one is never a pleasant experience, money and family dynamics can sometimes lead to manipulation and breakdowns within relationships, which is why it is important to seek proper legal and financial advice when setting up your Will. It is also important to make sure that your Will is updated when your circumstances change.

This article was written with help from Michael Clive of CBC Lawyers. Michael is the principal of CBC Lawyers which is a family owned, full-service law firm servicing all of North QLD. Michael has been practicing law for over 20 years and heads up the commercial, property and deceased estate’s team. Michael grew up in Home Hill, a small town in the sugar cane growing Burdekin district. He hasn’t lost that rural outlook and is easily able to put clients at ease with his relaxed, friendly manner.

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