Beneficiaries’ considerations when drafting a will

When a will is being prepared, the testator is naturally concerned with how their estate will be divided amongst loved ones and other beneficiaries but often does not consider the possibility that an aggrieved family member or dependent may be able to bring a family maintenance provision application against the testator’s estate due to inadequate provision under the will.  In Queensland the legislative framework is contained in the Succession Act 1981 (Qld), under which spouses, children and certain financial dependents of the testator (parents, a parent of a child under 18 years of age and any person under 18 years of age) may bring such an application.  While a successful family maintenance provision application will necessarily impact the fortunes of the named beneficiaries under the will, the High Court has recently confirmed that beneficiaries’ interests are not paramount to the interests of the testator in drafting the will.

Badenach v Calvert[1] concerned an action brought against a solicitor (Badenach) who had advised a testator in the preparation of his will, by the sole named beneficiary (Calvert), who was to receive the entirety of the testator’s estate under the will.  Badenach failed to make enquiries of the testator as to persons other than the named beneficiaries who might be able to bring a family maintenance provision application, which Calvert argued amounted to negligence on Badenach’s behalf.  The testator in fact had a daughter who, having not been provided for under the will, brought an action under the Testator’s Family Maintenance Act 1912 (Tas) – the Tasmanian equivalent of the Queensland provisions – the costs of which were borne by the estate.  The orders of the Supreme Court of Tasmania in respect of the daughter’s maintenance and the costs of the proceedings had the effect of significantly reducing the extent of the estate.

In the initial action brought by Calvert against Badenach, the primary judge held that Badenach had breached his duty of care to the testator in contract and tort not only to make enquiries as to family members who may bring a claim and advise of the potential of such claims, but also to advise of the possible steps to avoid the impact of such a claims.  However, the primary judge held that neither of these omissions amounted to a breach of any duty of care owed to Calvert.  On appeal, the Full Court of the Supreme Court of Tasmania disagreed, holding that Badenach owed Calvert a duty of care which must not be less than the duty owed to the testator.  The decision of the Full Court of Tasmania was handed down in July 2015 and until the time of the High Court’s decision had caused a great deal of alarm and unease in estate planning circles, as it created support for the proposition that a duty of care was owed to beneficiaries in the preparation of a testator’s will.

The High Court agreed with the primary judge that while Badenach had breached his duty to the testator, there was no duty owed to Calvert.  In distinguishing an earlier High Court decision, Hill v Van Earp[2], French CJ, Keifel J and Keane J held that in this case there was no alignment between the interests of the testator and the interests of Calvert, which could be said to form the basis of a duty owed to Calvert.  Badenach owed the testator a duty to enquire as to persons who may possibly bring a family maintenance provision application against the estate, which may have had the effect of causing the testator to change his wishes and reduce the entitlement of Calvert under the will to avoid the possibility of such a claim.  A conflict therefore existed between the interests of the testator and Calvert, which precluded any exception to the general rule that the solicitor owed a duty of care only to his client.

While the decision clarifies that it is only where a testator and a beneficiary have the same interests that a solicitor owes a duty to the beneficiary in the drafting of a will, it also importantly confirms that testators must be advised of possible family maintenance claimants.  As background to preparation of a will, Rostron Carlyle provides clients with an estate planning questionnaire in which enquiries are made of the testator’s family members for the purpose of advising the testator of the risk of family maintenance provision claims.  We discuss with clients the likelihood of such claims being brought and the solutions to minimise this likelihood.  If you are considering preparing a will for the first time or updating an existing will, make an appointment to discuss your options and concerns with one of Rostron Carlyle’s experienced solicitors.

[1] [2016] HCA 18

[2] (1997) 188 CLR 159

Clayton Hellen

Senior Associate

Brisbane 07 3009 8444
Email c.hellen@rclaw.com.au

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Supervising Partners

Gavin McInnes

Partner

Brisbane 07 3009 8444
Sydney 02 9307 8900
Email g.mcinnes@rclaw.com.au

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