A Statutory Will can be the solution to estate planning problems where a person has lost capacity. Instead of being made by the person themselves, a Statutory Will is made for them by an Order of the Supreme Court of Victoria.
The Wills Act 1997 (Vic) provides this mechanism for the Court to authorise a Will on behalf of an incapacitated person to prevent them from dying intestate or with an unsuitable Will. In this next article of our Incapacity Series, we explore the meaning of testamentary capacity for the purposes of making a Will and the process of applying for a Statutory Will in Victoria.
1.What does 'Testamentary Capacity' mean?
A person has testamentary capacity provided they can satisfy a four-part test:
- Can the person understand the effect of creating a Will: The person must comprehend what a Will is and its effects, even if they don’t understand every clause in detail.
- Are they capable of remembering what assets they have: They should know what assets they have and their value, even at a high level.
- Are they aware of the people who have a moral right to inherit in their Will: They must recognise those who have a moral claim on their estate, typically family members or others with reasonable expectations.
- Are they capable of evaluating and discriminating between those claims: They need to be able to weigh and discriminate between the strengths of these claims and be free of conditions or disorders that would prevent them from making rational decisions.
2. What is a Statutory Will?
A Statutory Will is a legal document created on behalf of a person who lacks the testamentary capacity to make a Will in the traditional manner. They can be useful to ensure that a person’s assets are divided and distributed in the way they would have wanted.
In Victoria, the Supreme Court has the authority under the Wills Act 1997 (Vic) to authorise the making of such a Will. The Supreme Court does not draft the terms of the Statutory Will. Instead, an applicant submits a proposed Will, and the Court assesses whether to authorise it.
By authorising a Statutory Will, the Court can prevent a person from dying intestate or with a Will that no longer reflects their likely wishes.
3. When can the Court authorise a Statutory Will?
Before it can authorise a Statutory Will, the Court must be satisfied:
- Lack of testamentary capacity: The person on whose behalf the Will is to be made does not have testamentary capacity.
- Reflection of likely intentions: The proposed Will reflects what the intentions of the person would likely be, or might reasonably be expected to be, if they had testamentary capacity.
- Reasonableness: It is reasonable in all the circumstances for the court to authorise the making of the Will. This includes evaluating the fairness and appropriateness of the proposed Will in light of the person’s situation and the interests of potential beneficiaries.
4. When might a Statutory Will be used?
Examples of circumstances where a Statutory Will application may be suitable include:
- Mismatch with likely wishes: The current distribution of the estate, whether under intestacy or an existing Will, doesn’t reflect the testator’s likely wishes.
- Absent parent: A parent who hasn’t been involved in the testator’s life might still benefit significantly from the estate under intestacy rules.
- Existing Will: Issues like lapsed gifts, questionable testamentary capacity, drafting errors, or the estate passing to the state (bona vacantia) need resolution.
- Beneficiary misconduct: The testator would want to prevent someone who has mistreated them from benefiting from the estate.
- Estate planning: Adjustments for asset protection or tax planning, such as replacing outright gifts with testamentary trusts or trusts to protect vulnerable beneficiaries.
5. What is the process for applying for a Statutory Will in Victoria?
Anyone is able to make an application for a statutory will. The application process is as follows:
- Application for leave: Before making an application for a Statutory Will, leave must be obtained from the Supreme Court. This acts as a screening process to ensure that only serious applications proceed. The court will consider whether the application has merit and whether it is appropriate to proceed to a full hearing.
- Providing evidence: The applicant must provide a range of material to support the application. This includes:
- The proposed Will.
- A reasonable estimate of the size and character of the estate.
- Any previous Wills made by the person.
- Evidence of the person’s wishes, if known.
- Evidence of the likelihood of the person regaining testamentary capacity.
- Any other relevant information that can assist the court in making its decision.
- Hearing: The court will hold a hearing to consider the application. Interested parties, such as family members or legal guardians, may present evidence and arguments. The court will review all the submitted evidence and hear from those who have a genuine interest in the matter.
- Decision: The court will decide whether to approve the Statutory Will. If the Will is authorised, it is then signed by the Registrar of Probates on behalf of the incapacitated person. This must occur while the person is alive, and the Statutory Will is not effective until signed.
6. Can a Statutory Will be challenged?
Yes, a Statutory Will can be challenged, but it requires strong evidence to overturn the court’s decision. Challenges are typically based on arguments that the Will does not accurately reflect the person’s best interests or that there was a procedural error in the application process.
Other articles in the Incapacity Series
- The Incapacity Series: The Importance of Planning Ahead
- Enduring Powers of Attorney: What if I can’t make decisions for myself?
- Appointments of Medical Treatment Decision Maker: What if I can’t make medical decisions for myself?
- Guardians and Administrators: What if I lose capacity and haven’t appointed anyone to make decisions for me?
- Statutory Wills: What if I lose capacity to make a Will?
How can Novum Law Group assist you?
If you need advice or have any questions about the Statutory Wills process, our Wills & Estate Planning team would be glad to assist you. Please call us on 9063 0300 or send us an email to discuss with one of our lawyers, or click here to make an appointment.
Authors
Stephen Fries
