Loss of capacity leads to statutory will

Date: Feb 19, 2015

When individuals have lost their testamentary capacity, a person's close relatives have the option to seek a statutory will that will oversee the distribution of their estate in the event of their death. This can involve either establishing a new will or revising the content of an existing document.

The ability of the courts to authorise the creation of this document was one of the key changes made under the Succession Act 2006 (NSW) and provides a new level of protection for those without testamentary capacity.

However, these decisions will also require an added level of scrutiny as they pass through the courts, in order to demonstrate that an individual's best interests are served by appointing a statutory will.

This consideration recently played out before the NSW Supreme Court, in which the wife and children of a man with dementia sought orders allowing them to make a will on the man's behalf. The man had also previously assigned his wife enduring power of attorney.

Although the man had initially made a will, this predated his marriage second marriage, which made that will void. Although the man had begun the process of drafting a new will, he had not completed the process while he still had testamentary capacity. 

In order to have this request accepted by the courts, the plaintiff - the man's wife - was required to demonstrate her husband's intent to draft a will in the years following their marriage. The courts were also required to determine which family members would be eligible to lodge a family provision claim, with this limited to the deceased children and wife - all of whom were in favour of a statutory will.

The courts agreed with the application from the man's wife, ruling she would be able to implement a statutory will. The courts ordered the man's wife to place his estate under management, of which she was appointed the manager, and to submit a management plan to the NSW Trustee and Guardian outlining the state and upkeep of the estate.

Importantly for others in a similar situation, this case highlights the legal avenues that are available for individuals who want to avoid a declaration of intestacy for their relatives. With the inclusion of statutory wills under the Succession Act 2006 (NSW), people whose relatives have lost testamentary capacity still have an option to ensure their estate is properly managed.

For more on statutory wills or the conditions that come with power of attorney, make sure to get in contact with a wills and estates lawyer.