The usual rule is that you need capacity to make a will. Broadly that means that you need to understand what will form part of your estate, who has a claim on your estate and what a will is.
In an increasing number of unfortunate situations, such as where a person is injured and receives a large personal injury payout, a statutory will is utilised to allow distribution in a manner that the injured person would wish.
The following tragic situation illustrates the point.
A 20 year father of two was involved in a near fatal accident. He was left with severe permanent, physical, intellectual deficiencies and required around the clock care. He was cared for by his parent. His parents also cared for the son’s two young children.
As a result of the accident, the son received a personal injuries settlement of $5m. In the 10 years following the accident, due to the injured man’s parent’s care (reducing the nursing costs) and prudent financial management, the $5m increased to $9m
Given the son didn’t have capacity, the man’s parents sought a statutory will.
The parents proposed that:
• their son’s children (their grandchildren), were provided with some asset protection by inheriting via a Testamentary Discretionary Trust and at 25 years of age; and
• the parents receive a share of the estate given the care provided to both their son and grandchildren both historically and in the future.
The parents didn’t suggest provision be made for the man’s former de-facto spouse as the relationship between their son and the former de facto, broke down shortly after the son’s accident. In addition, the mother lost custody, there was a formal long term child protection order put to favour the parents and the mother had had minimal contact with the children.
The son didn’t have a will. If he died, his two children would benefit equally at 18. Due to the large size of the son’s estate, including the increase due to the parent’s actions, the Court allowed a statutory will in the terms proposed.