Does my will reflect my intentions?

The importance of having a precisely drafted will has been recently highlighted in the South Australian Supreme Court case of Farrelly v Phillips & Ors [2017] SASCFC 111.

Background

This case involved an appeal in relation to the last will and testament of the deceased, Monica Gertrude Farrelly, who passed away in 2012 at the age of 98.

Ms Farrelly was a spinster who died leaving no surviving children, parents, siblings, aunts or uncles. She had a large extended family however, consisting of numerous first cousins, some who had survived her and others who had died leaving children of their own.

Ms Farrelly made her last will almost 10 years prior to her death. Her estate was significant, with a value in excess of $7 million at the time probate was granted.

The appeal was brought by a child of one of Ms Farrelly’s deceased first cousins and concerned two particular clauses in particular,  clause 3(n) and 4.

Clause 3 of the will concerned the division of the estate. It consisted of various specific gifts to numerous individuals and institutions. Some gifts required the recipient to survive Ms Farrelly, whilst others did not. Clause 3(n) provided for the residuary estate to be divided as follows:

“(n)          all the rest and residue in equal shares as tenants in common per capita for those of the children of the deceased brothers and sisters of both my late mother and father who survive me.”

Clause 4 appeared to extend the operation of clause 3, stating:

4.           If any beneficiary under my will does not survive me or if it should be uncertain as to whether such beneficiary did survive me but leaves surviving a child or children who shall be living at the date of my death and attain a majority I direct that such child or children shall take and if more than one in equal shares as tenants in common the share under this my will which his her or their parent otherwise would have taken.”

The appellant’s argument centered around his belief that he was entitled to his late parent’s share  as clause 4 operated in regards to the gift contained in clause 3(n).   

Supreme Court decision

In determining this matter the Supreme Court had to consider whether Ms Farrelly intended to simply give her residuary estate (under clause 3(n)),  estimated to be almost $4 million, to those of her first cousins who might survive her, or whether she intended to distribute her residuary estate to those of her first cousins who survived her and to the children of those first cousins who did not survive her.

The Supreme Court had minimal evidence to assist in ascertaining which choice Ms Farrelly intended to make. Ms Farrelly’s knowledge of her family was not extensive and her draft will did not throw any real light on her intent. As a result, Ms Farrelly’s intention had to be found in the language of her will.

In a 2:1 decision by the Supreme Court, the appeal was dismissed with it being agreed that:

  1. clause 3(n) of the will was a class gift rather than a gift to individuals; and
  2. clause 4 was a substitution clause which only affected members of a class, and in relation to clause 3(n), such class was established at the date of Ms Farrelly’s death.

It therefore followed that those first cousins who did not survive Ms Farrelly were not members of the class under clause 3(n) and no substitution could apply to them. Their potential share was to be distributed amongst the first cousins who did survive Ms Farrelly.

How does this affect me?

It is not uncommon to want to include the next generation in your will where an intended beneficiary has died. A substitute beneficiary in your will may include a grandchild, niece or nephew. It is important that you ensure that your will appropriately addresses the inclusion of such individuals and accurately reflects your intentions. As demonstrated in this case, a small oversight can have significant consequences for your family and friends.

This case has again reiterated the importance of having your will prepared and regularly reviewed by a suitably qualified and experienced lawyer. If you would like to discuss your estate plan further or make an appointment to update your will, please call Mellor Olsson to speak with a specialist from our estate planning team. 

This article was written by Associate, Erin Moll

Practice Area: Wills & Estates

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