A rant on challenging Wills

A few judges and populist politicians have recently made some snarky comments about lawyers and ‘greedy’ people who are challenging Wills. Apparently, as a profession, we are getting a bit ahead of ourselves in bringing too many of these cases to court.

Well let’s just put on the record that lawyers do not start legal actions, our clients do. We are merely ‘guns for hire’. Yes, we can influence or encourage someone to bring an action, but that generally starts with us making a pretty bland statement about what their rights are. We do not give them those rights – our politicians and the courts set the ground rules.

So let’s get that straight, we and our clients work with the laws that the politicians and judges give us.

Why do people challenge a Will? Because they feel that they have not been ‘adequately provided for’ by the person who has died. They feel that they have not got what they need or deserve. Our politicians in every Australian state and territory have given us the legal right to challenge a Will in these circumstances. In fact, in some states we have also been given the ability to challenge a gift of assets made prior to when someone dies.

The funny thing is that there are two sides to this story. The other side is the person who has made the Will. Almost every single one of our estate planning clients get really upset when we tell them that they can put whatever they like in their Will, but the court will have the ultimate say as to who gets what after they have died. Yes, the court can basically ‘re-write’ your Will. (We note that in 99.9% of cases Wills do not get re-written. It is only the rare case that makes it to court.)

Our clients who are making their Wills get really angry about this. They say, “But these are my assets, this is my wealth. I worked hard for this, and now you tell me that I don’t get to decide who benefits from it when I die.”

We say, “Yep, sorry, that’s how it works.”

Next they ask, “Why is this the case?”

Simple answer: social policy.

Our politicians have decided that each of us is not competent to have the final say on who gets our assets when we die. They have also decided that this is a task best reserved for our judges. Yes, those same judges that the politicians are constantly whinging about, and trying to override with mandatory sentencing and self-executing strict liability laws.

The social policy is this: if someone who is related to you does not have enough of their own money to adequately look after themselves, then it is up to you, through your estate, to look after them. The alternative is that the Australian taxpayer must look after that person via social welfare and pensions. However, these same laws apply whether the beneficiary is on welfare and your estate is worth $150,000, or the de facto partner of someone worth $100 million who puts their hand out for a cool $10 million.

Not only this, but the politicians have written these laws to deliberately encourage people to bring such claims. They have done this by saying that the costs of these actions will generally be paid out of the estate, rather than by the person bringing the claim. So there is no real cost dis-incentive to bringing a claim. In other words, there isn’t a lot of downside to challenging a Will.

Let me be very direct – the politicians have deliberately written clear laws that direct the courts to re-write your Will to change who gets your assets when you die. They have also provided a mechanism where the cost of bringing these actions is paid by you (out of your estate), rather than by the person bringing the claim. They want people to challenge your Will.

But now the same politicians and the judges they have appointed to administer these laws are trying to blame the lawyers for getting excited about the fact that they can assist their clients bring this sort of case. They are saying that we are making too much money out of these actions, and that it is now against social policy for us to be encouraging clients to bring these claims – most of which are actually successful to some extent.

Which way do they want it?

Our view is that politicians and the courts should keep their noses out of the private affairs of people, and that these laws should be watered-down. Yes, we are saying that the ability for people to challenge Wills should be cut down. Yes, this is against our own interests as lawyers (who make money out of such claims).

Alternatively, the politicians could simply say that your assets are not your own, and that they will be automatically distributed in a certain way, i.e. x% to your spouse, y% to your children, etc. This is how the laws of some other countries operate. This is also how the law works in Australia when someone dies without a Will. Trust me, this would be VERY, VERY UNPOPULAR with just about everyone. The current laws that allow certain people to challenge a Will are already quite unpopular.

So, for now, we are left somewhere in between. You get to decide who gets your wealth when you die – but subject to someone bringing an action to challenge your Will and asking for a bigger share. As lawyers, we stand in the middle of this debate.

If you are concerned that someone may challenge your Will, then come and see us to help you make your succession plan as bulletproof as possible. On the other hand, if you don’t think you have been adequately provided for under someone’s Will, we can apply our special skills and experience to get you more. (Yes, lawyers win both ways…)

Call us on 1300 654 590 to talk about it further.

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Estate planning for sole directors of private companies

Estate planning for sole directors of private companies

If you are the sole shareholder and director of a private company, have you thought about what will happen to your business if you lose capacity or die? Failure to plan for this eventuality can affect the financial viability of your assets and leave your family vulnerable – so it is something you need to turn your mind to. Fortunately, there are several solutions that are easy to implement and lots of advice about these issues is available.

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