Wills, estates and succession planning expert Nikki Owen said while there is no such thing as an ‘incontestable’ will, it is possible to give the will–maker peace of mind that their wishes will be respected.
Owen, a partner at Adelaide law firm Finlaysons, has seen the good and the bad when supporting individuals with estate planning.
“I regularly come across new clients who incorrectly believe that their will will pass trust and company assets or jointly-owned assets,” Owen said.
“Further, many wills I see contain no ongoing asset-protection for the next generation, which is a missed opportunity, or have made no provision for a potential claimant and no asset-protection measures have been taken to ensure that the assets pass as the client wishes.
“Many super nominations I see are invalid from the outset as they try to nominate non-dependant brothers, sisters, nieces or nephews for example.”
She said individuals should take advice to avoid these pitfalls and review their estate plan regularly.
In 2021, around 1 in 8 Australian families were blended or step families with dependent children or students living at home.
This figure does not take into consideration families with only adult children – which is more likely to be the situation when someone dies.
A study into contested estates in Australia found that 88 per cent involved an estate with a will or potential will, and three-quarters of claims were successful.
Owen gave a recent example involving two adult children and their stepmother’s estate.
In February, the Supreme Court of Victoria found that a non-written agreement had been made between a married couple Kurt and Marilyn Miglic when they made mirror wills in 1993, leaving everything to each other on the first death and primarily to Kurt’s two daughters from a previous relationship on the second death, so that the wills could not be changed without the consent of the other.
After Kurt’s death in 2007, Marilyn changed her will and reduced her step-daughters’ entitlement in favour of her nieces and nephews.
“The judgement was made on the balance of probabilities, on the evidence before the Court, primarily from Kurt’s two daughters after both Kurt and Marilyn had died” Owen said.
“The daughters and other family members gave evidence of conversations with Kurt confirming that he and Marilyn had an agreement that they would not change their wills, and that Marilyn was present during some conversations.
“The solicitor who prepared the wills gave evidence that Kurt and Marilyn made no mention to him of an agreement that they could not later change their wills.
“Regardless, the court found that a trust was imposed in favour of Kurt’s daughters, as Marilyn’s will should not have been changed after Kurt’s death.”
Kurt’s daughters were ultimately awarded 99 per cent of the estate, which amounted to around $13.5 million.
The wills and estates team at Finlaysons, which Owen heads up, focuses on practical, effective and flexible solutions for clients’ business and personal interests. This includes assets held personally, jointly, in a trust, company or superannuation fund, locally or overseas.
They aim to ensure a trouble-free transition that provides for their clients’ future and that of future generations.
Owen said mirror wills themselves do not constitute a contractually binding agreement to not alter them without mutual consent, and a binding written agreement or ‘mutual wills agreement’ is usually required.
Mutual wills are an alternative used by some couples to provide for their biological or stepchildren, however, while they can impose a legally binding contract, Owen said they are “problematic”.
“They are extremely restrictive, and of limited use in any event, as the assets in the hands of the surviving spouse can be spent for his or her needs before death,” she said.
“And if the survivor re-partners for example, the assets could be substantially reduced by a claim on separation or divorce, or on death.”
If one person dies, both wills become irrevocable and any amendment can be challenged.
Owen recommends using other means, such as trusts, to protect the interests of children in blended and step families, and to provide a level of reassurance to all concerned.
Unfortunately, not everyone enjoys a good relationship with their stepchild or stepchildren, and a lack of reassurance and clarity can create problems even in a good relationship.
She cautions that expert legal advice should be sought to reduce the risk of protracted and expensive estate litigation.
Locally, the Succession Act 2023 (SA) when it comes into force will include provision for a stepchild, minor or adult, to claim against the estate of their step–parent if the assets accumulated by their natural parent form a substantial part of that estate.
The laws in Australia and overseas can vary widely regarding wills and estate planning, and Owen regularly works with clients who have assets in other jurisdictions to help them ensure that their overall estate plan is practical and effective.
The Finlaysons team takes an empathetic approach to ensure each client’s business and personal interests are protected, future plans for their estate are achieved, and that they have peace of mind no matter what the future holds.
Owen suggests couples with blended or step families get legal advice from those experienced and specialising in such matters, particularly as their circumstances change or family grows.
“Seeking out expert legal advice in this area really is worth its weight in gold, not only to protect assets, but to protect the family relationship.”
If you need any advice on your estate planning, reach out to Nikki Owen, Finlaysons Lawyers, the expert in Adelaide for wills, estates and succession planning.
Finlaysons is a leading independent corporate and commercial law firm in Australia, with offices in Adelaide and Darwin, working with clients across Australia and internationally.
This article provides general information only and does not constitute legal advice. Do not act on the basis of this content, but seek specific advice from your legal adviser.
