Legal Tip 293: What happens if a Will is invalid?

Discussion in 'Wills & Estate Planning' started by Terry_w, 24th Jun, 2020.

Join Australia's most dynamic and respected property investment community
  1. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    Sometimes a will might be invalid which is only found out after the testator carks it. A will can be invalid for any number of reasons.

    What happens then?

    Either

    - The previously made will is now the last one, or

    - The intestacy laws kick in

    But the other option is the courts may ‘rectify’ a will. I recall a case in which the will was not signed by the testator but 2 witnesses had somehow witnessed it. The witnesses can be examined in court and found out what happened, and they might deem the will be to valid.

    Example

    A few months before his death Grandpa Simpson does a new will where he leaves everything to the RSPCA. Homer, his son, challenges the will arguing that Grandpa did not have the capacity to make a will at this stage (the RSPCA would no doubt challenge this) and the court might rule the will invalid. Since it was invalid it did not cancel the previous one which is now the one that dictates how the assets are passed on – all to Homer in this case.

    Even if there was no previous will Homer would have inherited under the intestacy laws as grandpa had no spouse or other children.
     
    Silverson and Perp like this.
  2. Silverson

    Silverson Well-Known Member

    Joined:
    11th Jun, 2016
    Posts:
    1,149
    Location:
    Melbourne
    What happens if Grandpa Simpson dies, Homer passed away years before and Bart, Lisa and Maggie are all over 18, does Marge inherit homers share? Does it got to the children? If grandpa Simpson leaves it to Herb in the will do Bart, Lisa and Maggie have grounds to contest as if Homer were alive he would have received half?
    Thanks @Terry_w
     
  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    If Homer died first and grandpa's will was invalid then the intestacy laws would mean grandpa's grandchildren would inherit assuming no spouse of grandpa. NSW laws
     
    Silverson likes this.
  4. Cousinit

    Cousinit Well-Known Member

    Joined:
    6th Aug, 2017
    Posts:
    1,022
    Location:
    Victoria
    I believe it is also important to tell someone where your will is located at some point? Not much use having a will and no one knows it's whereabouts.
     
    Terry_w likes this.
  5. Tony3008

    Tony3008 Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    972
    Location:
    Docklands, Victoria
    I told my church home group that my final wishes letter is in my desk drawer - as you say, no use doing these things if no one knows. They asked if I'd chosen the hymns and when I said yes, they called them up on YouTube and had a practice! Very kind of them, but dropping dead isn't a current to-do.
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    Dont die in a house fire. And lets hope the adult kids or spouse who find it first agree with the contents and dont "unfind" it.

    Recently encountered a deceased estate where the deceased knew he had weeks to live. Went to elaborate plans with his will. And completely ignored his binding death nomination which was inconsistent with his new will. The new will left specific gifts to his kids and a residual amount to his wife and assumed all his super death proceeds would flow to his estate. But the BDN left it all to his wife and his home was on a joint tenancy basis with his wife.
     
    Last edited: 22nd Jul, 2020
  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    It is always good to build in what happens with super inside the will, even if you never plan for the super to form part of the estate. This is because there is a chance the super could form part of the estate. This could be because the trustee decides to pay the estate.
     
    Paul@PAS likes this.
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    23,319
    Location:
    Sydney
    In the above case the opposite occurred. All the plans in the world didnt consider the binding nomination so the willl was functionally useless. A DIY will. The minor cost for a solicitor would likely have raised the question of ensuring a fresh binding death nomination (to the estate) was made to give certainty to the will and the estate plans. Fortunately the wife is very agreeable to fixing the matter.
     
  9. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,386
    Location:
    Sydney
    Correct. A competent lawyer working in the wills and estate space would ask the relevant questions including Binding Nomination, state of affairs, possible family provision claim if Will is drafted in a certain way, potential costs to the estate if a reseal is required or fresh probate required for assets overseas etc. I have seen DIY wills before and in my assessment, they don't cut the mustard for uncertainty or poorly written down clauses that they copy from internet and paste.
     
  10. Shogun

    Shogun Well-Known Member

    Joined:
    26th May, 2018
    Posts:
    2,853
    Location:
    Perth
    I don't like starting new threads.

    Do Wills need to be updated on a regular basis every X years. That this Will is still my "wishes"?
    If so does this require an entire new will to be written?
     
  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,666
    Location:
    Australia wide
    willair, SatayKing and Shogun like this.
  12. SatayKing

    SatayKing Well-Known Member

    Joined:
    20th Sep, 2017
    Posts:
    10,726
    Location:
    Extended Sabatical
    Probably include a review of the enduring power of attorney in the process as well.

    Every year this reminder is included in the documentation I receive in respect of the SMSF.

    upload_2021-6-24_10-37-53.png
     
    Terry_w likes this.

Our clients are global and know we are property tax professionals. Our advisers are qualified and experienced and we don't outsource. We can help with complex CGT, Income Tax, and Developer issues. Property is our speciality incl Trusts, Co and SMSF