29/11/2016

What if your Will accounts for the master and the dame but not the little boy who lives down the lane? Does the little boy have a claim against your solicitor for not including them in the Will?

We often talk about how important having a Will is from the point of view of the testator. We advise on the things that you can do with your Will.

But what if what you do in your Will doesn’t include a beneficiary that it normally should?  Or doesn’t suit one of your beneficiaries? Or leads to a beneficiary paying more tax or losing their inheritance to their ex-spouse or a business creditor?  Is the testator’s solicitor liable to give advice to the beneficiaries to cover all those things?

Here we look at where a beneficiary may have an action against a solicitor if the effect of a testator’s Will is detrimental to them because of a failure by the solicitor to advise on certain possibilities.

The key message here is not to leave it to chance!

When you are thinking about what to put in your will it is important to cover all possibilities in advance. Solicitors have a duty to you as their client.  But they also have a duty to your beneficiaries.  How can these duties be reconciled?

There have been a number of cases in which different levels of duty were held and each case has hinged upon the particular facts.

The High Court made a decision this year about how far that duty to a beneficiary of the client’s Will extends for a solicitor. In Badenach v Calvert [2016] HCA 18 the court held that “a solicitor will only have a duty to a prospective beneficiary under a Will where the interests of the client and the interests of the prospective beneficiary are aligned”.

In this case there was an estranged daughter who made a claim against her late father’s estate. It had been his intention to leave his entire estate to his stepson. The stepson argued that the solicitor owed a duty to his late stepfather to advise that his estranged daughter may have been able to make a claim against the estate and that the solicitor ought to have suggested options as to how his stepfather could safeguard the estate.

The Court concluded that:

1.    in some cases the solicitor would have had the duty to advise the client on how to avoid a claim by his estranged daughter – those cases include where the client asked the solicitor to do so or where the facts showed on their face a clear likelihood for the estranged daughter to make a claim;

2.    in this case the duty extended to make enquiries about the family situation, but did not extend to suggesting advice to safeguard the estate for the stepson;

3.    the client did not ask the solicitor for such advice;

4.    the solicitor was not obliged to assume that the client needed that advice simply from the facts given to the solicitor;

5.    no-one could know what the client would have done if the solicitor had given the advice - whether the client would have taken it and changed his Will or not - and in the absence of knowing that, the stepson could not prove that the solicitor’s failure to advise directly caused the stepson’s loss.

So how can you make sure that your Will is thorough enough to account for these situations? Here are a few tips for things to consider:

1.    Who can make a claim on your estate?

If you are unsure if someone may be able to then speak to your solicitor. It is vital that you think about anyone from your life (even if only a part of your history) that may think they are entitled. This might include former spouses, step-children (in some States only), estranged children, sometimes parents and other dependants. Just because you no longer speak to that person does not necessarily preclude them from making a claim on your estate!

2.    Ask questions!

It is important that when you’re thinking about what you want to do with your estate, you think about the impact of your decisions. Talk to us about what you do want to happen and, importantly, what you don’t.

3.    Be decisive!

Do not leave uncertainty as to your testamentary intentions. By being open and frank you are best able to account for all possible circumstances. Drag the skeletons out of your closet to best equip those closest to you. Being decisive can help to avoid unclear testamentary intention.

And of course, when seeking a solicitor, choose one that understands these factors and will work with you to achieve your desired intention.

For further information, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.