Often parents wish to provide a home for one or more of their children in their will. So they specifically give the particular house and land in their will to make sure the child or children benefit.
What happens if the parent becomes mentally and physically infirm and someone is appointed as administrator or attorney to manage the person’s financial affairs? What if the administrator or attorney sells the property dealt with in the will in order to fund an accommodation bond for the parent in a nursing home, a common occurrence nowadays? Due to some recent court decisions which have changed the way the law has been applied for a number of years, this gesture on the part of parents to leave specific property under their will can now be much more easily frustrated.
For a number of years, a Queensland Supreme Court decision aided beneficiaries in these circumstances. That case involved a sale by attorneys under an enduring power of attorney in order to fund the care of an elderly by then mentally incapable person. Unbeknown to the attorneys, the elderly person had left the house to the attorneys in her will. The proceeds of the sale were identifiable in the estate and the judge held the attorneys were entitled to those proceeds.
Change in the law
Until last year, that case was accepted as the law in Australia and was followed in a number of cases. However, last year a judge in NSW in a case with similar facts to the Queensland case concluded the Queensland case was wrongly decided based on some much old cases. The NSW decision has been followed in several Queensland cases since where the judges have said they cannot now follow the older Queensland case.
How this affects clients
What this means is, if a parent, who now is mentally incapable of altering their will, has left a property in the will and it has been necessary to sell it, the beneficiaries are much less likely to be able to get the benefit their parent intended.
Clients should regularly review their wills and, if they wish to leave specific property, ensure that their will is drafted in such a way to cover a potential situation like the ones described above. Our estate planning team can advise in this regard.
If it is too late and a beneficiary has lost a benefit under a will, our estate litigation team can assist with advice concerning applications for compensation out of the estate which are available under Queensland legislation.