Poor Will Drafting can be an Expensive Exercise– Lessons from Hope v Schneider [2016] QSC 044

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The recent Queensland Supreme Court decision of Hope & Anor v Schneider & Ors [2016] QSC 44 highlights the cost of mistakes in Wills and the necessity for will-makers to ensure that their wills are incontestably clear. Failing to draft Wills in clear and instructive language, and to make the intentions of the Will easily understood, can result in ambiguity. This in turn opens such documents up to large-scale and costly family disputes in Court.

This was the case in Hope & Anor v Schneider & Ors [2016] QSC 44 where a daughter and step-daughter (both beneficiaries under a Will) applied to the Supreme Court of Queensland to determine Marie Josephine Schneider’s (“the Deceased”) intentions under her Will because of two contradicting clauses.

Background

On 5 August 1999 the Deceased, then alive and married to her second husband, drafted a Will (“the Will”) to gift substantial portion’s of the couple’s estate to both the Deceased’s two children from another marriage, and her husband’s two children from another marriage. The Will also served to gift the couple’s respective grandchildren portions of money. These grandchildren were the descendants of the four children mentioned above.

On 6 July 2014 the Deceased passed away. However, after her death it was discovered that the Will’s two distribution clauses contradicted each other. The predominant issue regarding this contradiction was whether a grandchild could inherit their parent’s inheritance, should that parent pass away prior to the enactment of the Will.

This was relevant because prior to the Deceased’s death, her step-son died, leaving behind a daughter, Samantha Schneider.

The issue then became which clause in the Will to follow: the clause that allowed for Samantha Schneider to claim her father’s inheritance, or the clause that did not.

The Deceased’s step-daughter and daughter brought a claim to the Supreme Court of Queensland to prevent Samantha Schneider from claiming her father’s inheritance. The Deceased’s son and Samantha Schneider acted as first and second respondents, both advocating for the inheritance to pass to Ms Schneider in place of her father.

The Mistake in the Will

Clause 3 of the Will gave specific gifts of $2000.00 to each of the Deceased’s grandchildren and step-grandchildren. After this gifting, the rest and residue of the Deceased’s estate was to be gifted to her two children and two step-children (on the condition that they survived her) in equal shares. In this clause there was no mention of a grandchild inheriting their parent’s portion under the Will, should that parent pass away before the Deceased.

Under Clause 4 of the will, however, the whole of the estate was to be gifted to the Deceased’s children and step-children in equal shares. If, however, a child or stepchild predeceased her, the clause provided that a child’s specific share was to pass to his/her child (i.e. the deceased’s grandchild).

This raised two main errors:

  1. Clause 3 and 4 both distributed the whole of the estate (an estate cannot be given away wholly twice);and
  2. Clause 3 and Clause 4 together made it uncertain whether Ms Schneider could inherit her father’s portion on the Deceased’s estate. If Clause 4 applied, Ms Schneider would receive her father’s share. However, if only Clause 3 applied, then Ms Schneider would not receive anything under the Will and her father’s share would be distributed amongst the other surviving children.

Held

The presiding judge, Ann Lyons J, accepted evidence from the solicitor, Mr Denning, who drafted the deceased’s Will that the deceased originally intended for the grandchild or step-grandchild to take their parent’s share. Mr Denning also provided evidence that Clause 4 contained a precedent clause which he normally used to include grandchildren in his Wills, however he had failed to remove the additional lines which gave the whole of the estate to the children and step-children in equal shares. Accordingly, Her Honour ordered that only part of Clause 4 was to be applied.

The law firm which prepared the Will had accepted they would pay the costs for the court application.

Reasons for Judgement

Her Honour, Lyons J, cited several court precedents laying down the tests to decipher the intentions of a deceased will-maker, should such intentions be unclear or contestable. The starting point is such circumstances is to consider the words used in the Will. If, however, the words are unclear, it is necessary for the Court to consider evidence, including evidence from the drafting solicitor, to determine the will-maker’s intentions. This is pursuant to section 33C of the Succession Act 1981 (Qld).

By taking Mr Denning’s evidence and the words of the Will into consideration, it could be determined that the Deceased wanted to provide for her grandchildren should their parent pass away. Lyons J also pointed out that Clause 4 and the lines which stipulated that a grandchild could inherit their parent’s inheritance was located directly above the signature line, and therefore would have been stood out to the Deceased.

When she read through her Will they were the last words she would have read on the first page and they also stood out as they appear after the underlined words “PROVIDED HOWEVER”. In my view they are the final and operative command in relation to her residue.”

Therefore, Clause 4 was followed.

Our thoughts

This case demonstrates the importance of ensuring Wills are carefully drafted. While the costs in this case were paid by the offending law firm which drafted the Will, is it common for such costs to come out of the estate in question. Thus, by the time a judgment is reached, the beneficiaries’ inheritances have been substantially reduced. In a day and age of “DIY Will Kits” and competitive legal fees, will-makers need to make sure they are not merely opting for the cheapest or easiest option. Similarly, solicitors and other third-party drafters need to ensure the wills accurately and clearly reflect the will-maker’s instructions.

A little money spent early to have a Will carefully and properly drafted without mistakes) can save families thousands in unnecessary legal fees, time and heart-ache down the track. We recommend that you regularly review your will ensure that it still represents your wishes and does not appear to have any inconsistencies of mistakes in it.

For more information regarding the cost of mistakes in Wills

Please do not hesitate to contact our Business Development Team on (07) 3252 0011 to arrange an appointment with one of our experienced Wills & Estate lawyers.