Statutory Wills and Codicils and Testamentary Trusts
Estate Planning Update – Autumn 2013
With Tasmania leading the way, Australian states and territories now have provisions enabling their Supreme Courts to order the creation of statutory Wills or codicils, e.g. for people who have lost testamentary capacity or did not have that capacity in the first place. Until recently, such orders were only made to ensure that an inappropriate person would not benefit from a deceased estate merely by being the closest next of kin, e.g. a father who had no role in caring for a disabled child or contact with that child.
In 2012, the Queensland Supreme Court ordered that an existing Will of a man who had lost capacity be amended by statutory codicil to include testamentary trusts to protect the interests of beneficiaries who were in business and thus had future creditor risk.
It will be interesting to see if the Australian Courts take the view in the future that the interests of beneficiaries would have been better served by the inclusion of testamentary trusts. They may decide to award damages to beneficiaries who missed out on the benefit of a testamentary trust because of a failure of a lawyer or other professional advisor to raise the advantages of a testamentary trust to a willmaking client.