B Hayward and Co

Author: Bernie Hayward

  • What if someone is a bit vague or believes things that aren’t true, can they make a will?

    • The legal terms for this Capacity to make a will.
    • The classic definition was given in a 1870 case of Banks -v- Goodfellow where the test was said to be that the person making the will must:
      • understand the nature of making a will and its effect
      • where a house has to be cleaned up and this involves a reasonable amount of unpaid time (not when you engage a cleaner to do it)
      • known the extent of the property they own or may own at the time of death
      • comprehend and appreciate the claims (ie. moral claims) that they should take into account
      • suffer no disorder of the mind that poisons their affections, perverting their sense of right or prevent the exercise of natural faculties
      • that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.

  • My father has made a will but he held the original it and it can’t be found. Can a copy of the will be used instead of the original?

    • When a person makes a will and the original was last seen in their possession but can’t be found when they die, then there is a legal presumption that they have destroyed the original intending to cancel the will.
    • Like other legal presumptions, evidence can be given in court to overcome this. Such evidence might be given by witnesses relating statements by the deceased shortly before death that show he/she still intended the will to operate. But in the absence of any evidence as to what happened to the original, or statements to support the intention that the will still operate, the person will be found to have died without a will.
    • in such circumstances, the Court will require the persons who would have received a benefit on intestacy to be notified and given the opportunity to dispute the use of the copy.
    • when the presumption can be overcome, evidence of the terms of the will may be accepted by the court even if a copy can’t be found.
    • When attempting to obtain probate on a copy of a will, the Supreme Court will require that all persons who would have received the estate on Intestacy be notified of the application and given an opportunity to object.

  • What if something is put in the will by mistake?

    • the Supreme Court will not grant probate on a will which was not fully known and approved by the testator.
    • due execution of a will (signing it in front of witnesses) raises a presumption that the testator knew and approved of its contents
    • probate may still be granted of the will but excluding parts that were included because of fraud, mistake or inadvertence
    • the terms of a will can be ‘rectified’ by the Supreme Court if it is satisfied on evidence that there is a mistake.

  • What if money is to be borrowed from a bank to buy the new house?

    • If you are a part owner, you will have to sign a mortgage over the property. Are you prepared to go into a mortgage?
    • If your family does not pay, do you have the ability to meet the mortgage payments?
    • If they don’t pay and you can’t, the house will have to be sold. The bank will get their money before you. Where will you live then?

    If this sounds negative, remember I have seen some that have gone wrong and my views must be colored by these. No one comes to tell me how wonderful the new living arrangements are. I have put this on paper mostly to jog people into thinking about what might go wrong. I hope this encourages people to have full and frank discussions with their family before they go into such an arrangement. It is my experience that family often avoid discussing difficulty questions as it can be confronting.

  • Will I get all my money back?

    • If you have entered into an agreement with your family then you will have more certainty as to what you get back. You will have at least discussed the problem.
    • The most common problem is that often the property has not increased in value by the amount that you have paid for your flat or extension. If you pay $100,000 for the extension, this does not mean the whole property has gone up in value by $100,000. In a given suburb there is a limit to how much any property will be worth, no matter how big or luxurious. If the property is to be sold to pay you back, who is going to take the loss? You will want to get your $100,000 (perhaps with interest) back but that might mean your family will not get as much for the rest of the house as they would have before you came along. If they get what their house was originally worth, you won’t get back all your money. What is fair?
    • On the other hand, if the property has gone up in value, who gets this increase. You might think you should because you consider it was your extension that increased the value. They might think they should because it is their property? What is fair?

  • What if it does not work out?

    • Getting your money back will be the problem.
    • Whether you are a part owner or a lender, the money can usually only be found by selling the house. Are you strong enough to say to the family member that you want them to sell their house to pay you back. This may cause much friction in the relationship

  • Who will own the real estate? Will it be owned partly by you or wholly by the family member? Remember that the owner of the land is the owner of everything built on it.

    • If you are putting money into a property but it is not wholly or partly registered in your name, then you are either lending or giving money to the family member.
    • If you are receiving a pension, this may affect your pension as there are implications of lending or giving money away to family.
    • If you are making a loan (and not an owner) then you need to have some written agreement that confirms it is a loan (and not a gift) and what is the position if you want your money back.

  • What if someone is unable to manage and doesn’t have Power of Attorney?

    The Guardianship Tribunal has Power to grant the right to manage someone’s affairs to another or to a government body named The Protective Commissioner. The person or body appointed is called a Financial Manager. If someone is physically or mentally unable to care for themselves, an application can be made to the Tribunal for a management order. The Tribunal will look at evidence as to the person = s condition from their doctor and others. If the Tribunal is satisfied of the person’s inability to manager themselves, it will make the order. If a private individual is appointed, the Tribunal will always order that the Protective Commissioner supervise the manager’s actions.

  • Is it a Good Idea?

    • It is a very powerful document. It can be used to deal with all your assets. While you might trust the person you give it to, you must accept the risk that you are giving them the power to do something that is not in your best interests (such as steal your money or mortgage your home) or even if in your best interest, not what you want to happen (such as sell your home when they consider you are not able to live in it anymore).
    • All lawyers are conscious of a case where the lawyer prepared a power of attorney for an elderly lady in favour of her daughter Unknown to the lawyer or the mother, the daughter had a gambling problem and mortgaged the mother’s house to raise money to pay gambling debts. The first the mother knew was when the bank told her they were going to sell the property under the power given in the mortgage. The lady sued the lawyer claiming he didn’t explain the daughter could do that. He probably didn’t state clearly that ‘your daughter could mortgage your house and take the money’ thinking it was an offensive thing to suggest to a mother about her daughter but it shows that you can’t presume anything or anyone.
    • You can restrict its power by conditions such as “This Power does not authorise the sale or mortgage of my house at 10 Smith St.” or some similar restriction. The problem is that it may become necessary for your attorney to sell or mortgage your house to pay for entry into a nursing home or some other need that may not be anticipated. Without a crystal ball is hard to know what restrictions should or should not be imposed.

  • Can’t I just get a letter from Mum giving me authority?

    It is up to the organization that you have to deal with as to what authority they require. The Land and Property Information Office which controls the ownership of real estate and therefore buying and selling of houses insist on a Registered Power of Attorney. Centrelink seems to have its own form of authority and banks usually insist on a Power of Attorney but not usually a registered one. A bank will usually have a procedure to authorize someone else to sign on an account and this may solve the problem of paying bills.