This Chapter is concerned with certain reforms which have appeared in Australian wills legislation in the last decade or so. The provisions all address substantial issues of wills law reform mostly not found in other jurisdictions; but some are inspired by recent law reform elsewhere.
7.1 BENEFICIARIES MUST SURVIVE TESTATOR BY THIRTY DAYS
| STATE | SECTION |
| ACT | s31C |
| NSW | no provision |
| NT | no provision |
| QLD | s32 |
| SA | no provision |
| TAS | no provision |
| VIC | no provision |
| VIC (1994) | s26 and proposed s99A of Administration and Probate Act 1958 |
| WA | no provision |
[Link to text only version of table]
As has already been mentioned in paragraph 6.11 above if a beneficiary dies before a testator the benefit left does not take effect. It is said to lapse.
In Queensland section 32 of the Succession Act 1981 provides:
(1) Unless a contrary intention appears by the will, where any beneficial disposition of property is made to a person who does not survive the testator for a period of 30 days the disposition shall be treated as if that person had died before the testator and, subject to this Act, shall lapse.
The Queensland intestacy rules contain a similar provision (Succession Act 1981 (Qld), section 35(2)). The Australian Capital Territory is the only other Australian jurisdiction which has followed this precedent, which originated in section 2-702 of the American Uniform Probate Code as well as a not uncommon practice of including a similar provision in well drawn wills.
The same provision appears in the traditional anti-lapse rule with respect to surviving issue of the deceased (Qld section 33, ACT section 31).
There are several arguments in favour of the provision. Its theoretical justification is the same as the justification for the lapse rule, that is, that testamentary benefits are intended to be personal to the beneficiary and are not intended to accrue to the estate of a beneficiary who dies before the testator. The statutory provision only extends that rule by a period of thirty days. The more practical context is that of multiple deaths of members of a family in a war time catastrophe or road or other accident.
Example 1
John and Mary are married. Mary is John’s second wife. They are killed in a car accident, Mary surviving John by a few hours. Each had made a will leaving everything to the other. Probate of John’s will must be obtained, under which Mary’s estate would take everything. Probate of Mary’s will would then be obtained but her estate would be distributed to her issue or other blood relatives upon intestacy. John’s family would get nothing. Under the Queensland provision John’s estate would pass as upon his intestacy; and Mary’s as upon hers.
Example 2
A father and child die in one accident, the father having left part of his estate to the child, and the child having survived the father by a few hours. The part of the father’s estate left to the child would pass to the child’s estate and thence, if the child had not made a will, to the child’s intestacy beneficiaries. Under the Queensland provision the child’s share would pass under the residuary provision of the father’s will.
There are several advantages to the provision.
- In each of the above examples a costly double administration is avoided by a thirty days’ rule.
- One reason why lawyers used to include a thirty days’ survivorship provision in wills was the English context of high death or estate duties. Two lots of duties would be imposed if there were two deaths in quick succession. A thirty day rule can ensure that death duties legislation will not impact too heavily on a family. Although there are not death duties in Australia at the present time there may be tax implications to a double succession which would be avoided by a thirty days’ rule.
- If there are doubts as to whether one survived the other for a matter of seconds or minutes in the event of a fatal accident, a thirty days’ rule resolves any difficulties of proof.
The Victorian Law Reform Committee has recommended a similar provision.
Issue for consideration
Should there be a provision that, unless a contrary intention appears in the will, where any beneficial disposition of properties is made to a person who does not survive the testator for a particular period the disposition shall be treated as if that person had died before the testator and shall lapse.
7.2 IS THIRTY DAYS AN APPROPRIATE PERIOD FOR A GENERAL ANTI-LAPSE RULE?
There is some opinion that thirty days is “too long” to wait to find out whether a beneficiary under a will or intestacy will or will not be entitled to a benefit. If a testator leaves all of his or her estate to a spouse or child and there is no reason to believe that the spouse or child will fail to survive for thirty days, the rule means that no part of the estate can be distributed to the spouse during a period of time, immediately after the death, when he or she may be in special need of financial resources, for instance to pay for a funeral and perhaps unexpected debts, or to obtain access to the deceased’s bank account.
Queensland has to a certain extent met this criticism of a thirty days’ rule by a provision in section 49(3) of the Succession Act 1981 (Qld) which is as follows:
The personal representatives may, during and after the period of 30 days after the death of a deceased person, make reasonable provision out of the estate for the maintenance (including hospital and medical expenses) of any spouse or issue of the deceased who would, if the person survived the deceased for a period of 30 days, be entitled to a share in the estate, and any sum so expended shall be deducted from that share; but if any spouse or issue of the deceased for whom any provision has been so made does not survive the deceased for a period of 30 days any sum expended in making such provision shall be treated as an administration expense.
This provision meets the difficulty at a practical level but not at a theoretical level and the Victorian Law Reform Committee in its 1994 Report on Reforming the Law of Wills has recommended the inclusion of a similar provision as section 99B of the Victorian Administration and Probate Act 1958.
The provision may have broader interest as a possible mechanism for dealing more generally with the financial difficulties which can arise upon the death of a person. For instance, it might be worth considering whether to provide a statutory authority to banks to pay for the funeral of a deceased person out of the deceased person’s bank account, without having to await probate of a will or letters of administration, or other means, to obtain access to the account.
Perhaps of some interest in this context is information furnished to the Queensland Law Reform Commission by the Queensland Police Service of the length of time those involved in fatal road accidents survive the accident. Of 390 deaths resulting from motor vehicle accidents in Queensland between 1 September 1992 and 31 August 1993, 377 victims died instantly or within seven days. The remaining 13 victims all died within nineteen days after the accident. No victims died more than nineteen and less than thirty days after the accident. Persons who died more than thirty days after the accident are considered not to have died as a result of the accident and so are not included in the gathering of statistics.
On this information, a period of twenty-one days could perhaps justifiably be substituted for thirty days. The period of thirty days derives from wills precedents directed to the same issues. However, any reduction of the period should not be regarded as a reason for not considering the more practical question of access to assets of the deceased for immediate and important needs of the deceased’s family in the days and weeks immediately following a death. This is, however, not so much an issue of the law of wills but of the administration of estates.
A careful comparison of the differing laws in Australia is needed and a clear policy for reform and uniformity reached.
7.3 POWER OF COURT TO RECTIFY WILLS
STATE | SECTION |
ACT | s12A |
NSW | s29A |
NT | no provision |
QLD | s31 |
SA | s25AA |
TAS | s47 |
VIC | no provision |
VIC (1994) | s37 |
WA | no provision |
In 1981 Queensland introduced a modest power of rectification in its Succession Act 1981 (Qld), section 31(1) of which reads as follows:
Power of Court to rectify wills
(1) As from the commencement of this Act the Court shall have the same jurisdiction to insert in the probate copy of a will material which was accidentally or inadvertently omitted from the will when it was made as it has hitherto exercised to omit from the probate copy of a will material which was accidentally or inadvertently inserted in the will when it was made.
Subsection (2) requires the matter to be brought to Court within six months of the death of the testator.
At common law, the probate Court was bound to omit from probate material accidentally or inadvertently inserted in a will.
In 1989 New South Wales inserted into the Wills, Probate and Administration Act 1988 (NSW) section 29A which provides, by subsection (1), that:
If the Court is satisfied that a will is so expressed that it fails to carry out the testator’s intentions, it may order that the will be rectified so as to carry out the testator’s intention.
In 1991 the Australian Capital Territory inserted a very wide and lengthy provision in section 12A of its Wills Act 1968 (ACT):
Rectification
12A(1) If the court is satisfied that the probate copy of the will of a testator is so expressed that it fails to carry out his or her intentions, it may order that the will be rectified so as to carry out the testator’s intentions.
(2) If the court is satisfied that circumstances or events existed or occurred before, at or after the execution by a testator of his or her last will, being circumstances or events -
(a) that were not known to, or anticipated by, the testator;
(b) the effects of which were not fully appreciated by the testator; or
(c) that occurred at or after the death of the testator;
in consequence of which the provisions of the will applied according to their tenor would fail to accord with the probable intention of the testator had he or she known of, anticipated or fully appreciated the effects of those circumstances or events, the Court may, if it is satisfied that it is desirable in all the circumstances to do so, order that the probate copy of the will be rectified so as to give effect to that probable intention.
There are further detailed provisions respecting the time within which an application must be made, notification and procedure.
Comment
A power of rectification, particularly one as broad as that of the Australian Capital Territory, raises a number of matters for consideration.
- To what extent should a power to rectify a will be modelled on a power to rectify a contract? In the case of contracts the parties are usually available to give evidence to the Court. In the case of a will the testator cannot.
- Another major issue of the existence of a broad power to rectify a will is its consequence on the accepted rules for the construction of wills. The rules for the construction of wills represent the accumulated experience of the Courts regarding what testators usually mean when they use certain forms of words. A general power of rectification could have the effect of destabilising the rules of construction, leaving executors and their legal advisers with no guidance concerning the meaning of a will.
- The large power conferred on the Court in the Australian Capital Territory may be considered to go beyond the concept of rectification. It is difficult to see as rectification a power to take into account matters or events taking place at or after the death of the testator.
The Australian Capital Territory’s provision seeks to enable justice to be done in the light of circumstances prevailing at or after the death of a testator. It can be a means of circumventing (a) inadequacies in the law of wills, (b) inadequacies in the intestacy rules and (c) inadequacies in family provision law. It is arguable, however, that to attempt to meet such inadequacies by a very enlarged power to rectify is merely to provide a short cut. What is needed, particularly in the context of a drive towards uniformity, is a more detailed investigation of the reasons why succession laws, as a whole, still fail to correct occasional patent injustices.
In 1994 South Australia inserted section 25AA into its Wills Act 1936 (SA) which reads as follows:
Power of rectification
(1) If the Court is satisfied that a will does not accurately reflect the testamentary intentions of a deceased person, the Court may order that the will be rectified so as to give proper expression to those intentions.
(2) An application for an order under this section must not, except with the consent of the Court, be made more than six months after the grant of probate or letters of administration.
(3) Nothing in this section affects the operation of section 29 of the Trustee Act 1936.
This power is almost as radical as the Australian Capital Territory power.
The Tasmanian Wills Act 1992 contains the following provision:
Rectification of wills
47(1) Where on an application made for a grant of probate of the last will of a deceased person or on an application made within 3 months after a grant of probate of a will, the Court is satisfied that there can be no reasonable doubt -
the Court may -
(c) grant probate of the will of the deceased person subject to such directions as appear to the Court to be necessary in order to give effect to the testamentary intentions of the deceased person; or
(d) if probate of the will has been granted, revoke the grant and substitute a fresh grant of probate subject to any such directions.
(2) Notice of an application under subsection (1) is to be served on the personal representative of the deceased person within such time as is prescribed by the rules.
In 1994 the Victorian Law Reform Committee recommended the adoption of a rectification provision the substantive provision of which is as follows:
Draft 37 - Can a will be rectified?
(1) The Court may make an order to rectify a will to carry out the intentions of the testator if the Court is satisfied that the will does not carry out the testator’s intentions because -
(2) A person who wishes to claim the benefit of sub-section (1) must apply to the Court within six months from the date of the grant of probate.
(3) The Court may extend the period of time for making the application if the Court thinks this is necessary, even if the original period of time has expired, but not if the final distribution of the estate has been made.
(4) If a personal representative makes a distribution to a beneficiary, the personal representative is not liable if -
Application must be made to the Court within six months from the date of the grant of probate to invoke this jurisdiction. There are further provisions concerning notice and procedure.
Clearly with these diverse precedents respecting the rectification of wills substantial reconsideration of the entire question is needed.
Issues for consideration
(1) To what extent should a power to rectify a will be modelled on a power to rectify a contract?
(2) What consequences should a broad power to rectify a will have on the accepted rules for the construction of wills?
(3) Should a power of rectification take into account matters and events taking place at or after the death of the testator?
7.4 CONSTRUCTION OF RESIDUARY DISPOSITIONS
STATE | SECTION |
ACT | no provision |
NSW | no provision |
NT | no provision |
QLD | s29 |
SA | no provision |
TAS | no provision |
VIC | no provision |
VIC (1994) | s33 |
WA | no provision |
There are several provisions in the Queensland Succession Act 1981 which are not found in other legislation the object of which is to reduce the incidence of partial intestacies of residue. Section 29 is one of them. It reads as follows:
Construction of residuary dispositions
Unless a contrary intention appears by the will -
(a) a residuary disposition referring only to the real estate of the testator or only to the personal estate of the testator shall be construed to include all the estate of the testator both real and personal; and
(b) subject to this Act, where a residuary disposition in fractional parts fails as to any of such parts for any reason that part shall pass to that part of the residuary disposition which does not fail and if there is more than 1 part which does not fail to all those parts proportionately.
Paragraph (a) attempts to deal with the case where a testator mistakenly uses the word “personalty” or “realty” in a residuary gift in a will, without realising the legal meaning of these technical words, intending to leave all the estate. Thus if a testator leaves in a residuary provision “all my realty to X”, then X cannot take any personalty, and unless the personalty has been expressly given elsewhere the testator will die intestate as to residuary personalty. Likewise if a testator leaves in a residuary provision “all my personalty to X” then X cannot take any of the testator’s realty and the testator will die intestate as to residuary realty. The reason for this is that the testator, in using technical legal words, is considered to have intended the consequences.1
The Queensland legislation is based on the view that testators should not be held to the technical meanings of words which they use inadvertently, in the belief, perhaps, that they sound legal, where the consequence is that the testator dies partially intestate. It is observed that the Law Reform Commission of Western Australia has considered adopting the Queensland provision in its Report on the Administration of Assets of Solvent Estates of Deceased Persons in the Payment of Debts and Legacies.2 However it appears to have misunderstood the object of the Queensland provision - see paragraph 5.18 above. This is not a vital provision, as it is only very occasionally that a testator can be expected to use technical terms inadvertently with such undesirable consequences; but it does clear up a problem and is justifiable to consider it for inclusion in uniform legislation.
Paragraph (b) of section 29 of the Queensland legislation is in relation to residuary estates which are left in fractional shares amongst persons. The provision is that if a fractional share fails it passes to the others to whom fractional shares were given. It too is concerned with preventing a probably unintended partial intestacy of residue. In Re Harvey3 it was held that a gift of all the estate was not a gift of residue and that the provision could not apply to it. That has been seen by the Victorian Law Reform Committee as placing an undue restriction on the efficacy of the provision and in the Victorian Law Reform Committees’s draft Wills Act 1994 there is the following provision:
Draft 33 - Construction of residuary dispositions
(1) A disposition of the whole or of the residue of the estate of a testator which refers only to the real estate of the testator or only to the personal estate of the testator is to be construed to include both the real and personal estate of the testator.
(2) If any part of a disposition in fractional parts of the whole or of the residue of the estate of a testator fails, the part that fails passes to the part which does not fail, and, if there is more than one part which does not fail, to all those parts proportionately.
(3) This section does not apply if a contrary intention appears in the will.
7.5 INCOME ON CONTINGENT AND FUTURE DISPOSITIONS
STATE | SECTION |
ACT | s30A |
NSW | no provision |
NT | no provision |
QLD | s62 |
SA | no provision |
TAS | no provision |
VIC | no provision |
VIC (1994) | s25 |
WA | no provision |
Under case law the beneficiary of a deferred residuary gift did not take the income arising before the gift vested.4 The income would pass to those entitled upon intestacy. In the case of a specific bequest, too, there was a rule that the beneficiary was not entitled to income accruing to the bequest until the bequest vested,5 unless a fund was set aside for the purpose of answering the bequest.6 Difficulties in knowing whether a legacy or devise would carry intermediate income from the date of the death or from a later date led the Queensland Law Reform Commission to recommend7 that there be a general rule giving intermediate income to the beneficiary of the capital in all cases unless the income were given elsewhere. Section 62 of the Succession Act 1981 (Qld) gave effect to this recommendation. It clears up a difficult part of the law and avoids the occasional partial intestacy of income. It has been accepted in the Australian Capital Territory and in the Victorian proposed Wills Act 1994.
7.6 DELEGATION OF WILL MAKING POWER
STATE | SECTION |
ACT | no provision |
NSW | no provision |
NT | no provision |
QLD | s64 |
SA | no provision |
TAS | no provision |
VIC | no provision |
VIC (1994) | s35 |
WA | no provision |
There is extensive literature concerning the rule that a testator cannot delegate the power to make a will. Difficulty is caused by reason of the fact that the ability to include in wills powers of appointment that are standard in settlements made inter vivos is subject to considerable doubt. The doubt was fuelled, in Australia, by remarks of Fullagar J in Tatham v Huxtable,8 the decision in Horan v James,9 where it was held that a testator could not create a hybrid power by will, and Re Norway10 where a power given to trustees of a will to “make such further payments” to the widow of the testator “either in the form of payments to her or payments for her benefit as they may consider reasonable after the balancing the interests of all parties” was held to be invalid as a delegation of the testator’s will making power. An entire Chapter in Hardingham, Neave & Ford’s Wills and Intestacy in Australia and New Zealand 11 is devoted to the subject. It is probable that much of the difficulty of the subject was generated by an arguably misconceived article by D.M.Gordon.12 The heresy has been rejected in England and Canada.13
It is anomalous that there should be one law for trusts created inter vivos but a different, far more restrictive law for trusts created by will. Furthermore it has the effect that developments in precedents for inter vivos trusts cannot be relied on when drafting wills. Since developments in drafting trusts inter vivos are frequently driven by tax planning considerations, the supposed non delegation rule has the effect of placing testators in an historical strait jacket.
The Victorian Law Reform Committee has recommended the following provision in section 35 of its proposed Wills Act 1994:
Draft 35 - Can a person, by will, delegate the power to dispose of property?
A power or a trust to dispose of property, created by will, is not void on the ground that it is a delegation of the testator’s power to make a will, if the same power or trust would be valid if made by the testator, by instrument during his or her lifetime.
FOOTNOTES
1. See, eg, Harter v Harter (1873) LR 3 P&D 11 and Re Cook [1948] Ch 212.
2. Project No 34 - Part VII, 1988.
3. [1990] 2 Qd R 508.
4. Re Gillett’s Will Trusts [1950] Ch 102; Re Geering [1964] Ch 136.
5. Guthrie v Walrond (1883) 22 Ch D 573.
6. Re Woodin [1895] 2 Ch 309.
7. Queensland Law Reform Commission Report 22 On the Law relating to Succession 1978.
8. (1950) 81 CLR 638.
9. [1982] 2 NSWLR 376.
10. (Unrep.) Vic. Sup. Ct. 1963 Case No 63/4731.
11. Law Book Co. 2nd ed 1989, ch 5.
12. Delegation of Will Making Power” (1953) 69 LQR 334.
13. Re Beatty [1990] 1 WLR 1503, Re Nicholls (1987) 34 DLR (4th) 321.
