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A do-it-yourself (DIY) will is a 'beacon to controversy'


Peter Malcolm Reid died at home, at Point Piper, aged 100 years in 2015.
He died a very wealthy man.

His fortune – his estate had a net value of $76 million - was made from the Vanderfield & Reid Ltd timber merchants business at Blackwattle Bay, Glebe (1925-1970), and from other successful business ventures and investments including bank shares in later years.

He decided to draft his own will, and then 22 codicils and statements of wishes.

As Justice Lindsay explained:

Confident of his own abilities, and anxious not to pay legal fees for the preparation of another will or any codicil, the deceased took it upon himself to prepare the will dated 25 January 2000, and subsequent legal instruments, without legal assistance.

The deceased became an enthusiastic will-maker; but his strategy for minimising legal fees miscarried at the expense of the deceased estate. His poorly drafted documentation has served as a beacon to controversy. And with that, engagement of not a few litigation lawyers.

Controversy was indeed attracted. Mr Reid's wife predeceased him and he had no children of his own. But he did have stepchildren, nieces and nephews, who claimed entitlements.

The litigation played out in 3 parts:

Part 1: Peta Roberts v Rupert James Moses [2015] NSWSC 1504 (14 October 2015)

Less than six weeks after Mr Reid died, his niece (by marriage) Peta Roberts applied for a maintenance distribution to meet her immediate needs.

After Mr Reid's wife died in 1998, and from 2001 until Mr Reid's death, she became his close companion and was totally financially reliant on Mr Reid, despite a 45 year age gap. She visited him increasingly regularly, flying from her home in Tasmania to Sydney twice a week in later years. She occupied her aunt's old room at Mr Reid's apartment. She organised and supervised round the clock nursing care for him (after 2007), his 90th and 100th birthday celebrations, and assisted in household duties. He in turn paid her an allowance, for her visits, for her daughters' education, for her property expenses, her substantial wardrobe and other possessions. She was not in good health, and had no other sources of income.

The Court (Justice Kunc) made a lump sum order of $150,000 in her favour for her maintenance under s 92A of the Probate and Administration Act 1898 (NSW).

She satisfied the requirements: she was a beneficiary under the will, was wholly dependent financially, and her financial needs were urgent. She was granted the right to request further advances based on her entitlement to receive dividends under the will.

The Court granted letters of administration pendente lite to the named executors to enable the amounts to be paid under s 73 of the Probate and Administration Act 1898.

Part 2: Mediation

A mediation was conducted by Keith Mason QC on 28 October 2016, attended by about 40 participants, to resolve the testamentary documentation, and the claims of the beneficiaries and family provisions claimants. It was successful in that all but one claim was settled.

On 1 December 2017, the Court ordered a grant of Probate on the will of 25 January, 2000, 12 codicils and 2 statements of wishes (the “will”).

Part 3: Estate Reid; Roberts v Moses and Palmer [2018] NSWSC 1145 (26 July 2018)

Justice Lindsay was asked to determine four questions relating to the gift to Peta Roberts of income from share dividends of up to $500,000 per annum:

  1. Did the gift of "income on dividends received" include dividends on the NAB and CBA shares owned by Mr Reid's wholly owned and controlled company, Vanreid Industries Pty Ltd, as well as to the dividends on the NAB and CBA shares held in his own name?

    The Court applied the “armchair principle” that when referring to "my shares", Mr Reid intended to refer to shares held both in his name and in the name of his company.
     
  2. Did the "dividends received" include "franking credits"?

    The Court decided that "dividends received" did not include "franking credits" because although they were attached to dividends (under tax law), "franking credits" were not actually received and were not specifically referred to in the will.
     
  3. Did "income from dividends received" extend to bonus shares and other securities issued?

    The Court stated that bonus shares and other securities were to form part of the shareholdings from which dividends could be received.
     
  4. Was the limitation on her entitlements: that they cease upon her marriage, void against public policy?

    The Court stated that there was no rule of public policy that could void this limitation.

The Court ordered that the recipient of the gift of the shares specifically perform the obligation to pay the "income on dividends received" to Peta Roberts accordingly until her death or marriage to a maximum of $500,000 in any 12 month period (commencing from the date of death of Mr Reid).

Conclusions

The Reid Estate illustrates why do-it-yourself or homemade wills are best avoided.

Apart from the high legal fees of litigating the validity of the will and the entitlements under the will, the litigation can damage, if not destroy, family relationships.

And for many wealthy individuals in Mr Reid's position, if they knew the harsh light that litigation shines on their private relationships after their death, they would have paid a high fee indeed to draft the best will possible, so as to preserve their privacy.

And last but not least, it would have spared Mr Reid from Justice Lindsay’s final acerbic comments as to his poor drafting of the will:

The provisions ... are essentially idiosyncratic products of a lay imagination vaguely familiar with the use of legal language.

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