Daryl Hely had assets of about $25 million when, in 2014, he went to a lawyer to prepare his will. He owned 14 properties, a share portfolio and cash. The will he made consisted of seven testamentary trusts (trusts that arise upon death).
About a year later Hely and his daughter made some changes to the will, aiming to simplify it. They made the changes without consulting a lawyer. Hely crossed out provisions he no longer thought necessary and his daughter made some additional changes.
Hely died in November 2017. Because of the changes Hely and his daughter had made, the executors of his estate had to apply to the Supreme Court of Victoria to seek clarification regarding the construction of the final will.
The court found that, while the will was meticulously detailed in some respects, Hely had not nominated any beneficiaries.
The court ruled that the testamentary trusts were defective and would not serve the purpose of distributing the trust property to the intended recipients. It rectified the flaw by re-inserting the beneficiaries named in the original 2014 will.
The will bequeathed gifts to Hely’s grandchildren. However, in one part of the will the gifts were to vest when each child reached the age of 18, while in another part the gifts would only vest when each child reached the age of 21. The court had to decide what Hely’s real intention was.
The court also found that the will did not adequately reflect Hely’s intention that each of his children be treated equally with respect to capital gains tax liability. On this issue, the court did not take any action, on the basis that insufficient evidence had been submitted regarding the extent of potential tax liabilities on gifted property.
In a note to clients, Angela Harvey and Emily Carpenter, lawyers at Swaab, say this last unresolved issue will involve further time and costs to resolve.
“Poorly drafted will, such as those containing ambiguous directions or which fail to incorporate fundamental terms, can prove costly.”