As Statutory Wills Brisbane Lawyers, this article discusses the case Re Matsis.
Can the law recognize the wishes of those who no longer have legal capacity to make a Will? In some cases, Wills can be made, altered, revoked or rectified by an order of the Supreme Court, where a person cannot make a valid Will due to lack of testamentary capacity.
The recent Supreme Court case of Re Matsis (Charalambous v Charalambous & Ors  QSC 349) suggests that the Courts are moving towards a broader application of statutory Wills. Significantly, this was the first Australian case that allowed a Will to be altered for asset protection and tax planning reasons alone.
In Re Matsis, an application was brought by a grandson who was set to inherit a significant sum of money from his grandfather’s estate. The grandfather suffered from dementia and was not expected to live more than 12 months from the date of the application. The estate itself totaled approximately $13 million, and was set to be distributed between the three grandsons as outright gifts.
Rather than receiving their inheritance in this way, the three grandsons sought to have a codicil attached to their grandfather’s Will, stating that the gifts were to be left in testamentary trusts. All grandchildren were involved in business ventures that carried high financial risk, and wanted to ensure that their grandfather’s estate was protected from the claims of potential creditors or spouses in the future.
In order to impose a statutory Will, the Court must firstly be satisfied that the will-maker lacks testamentary capacity, and that it is unlikely they will regain testamentary capacity. In the case of Mr Matsis, who had been suffering from dementia for approximately 15 years and was in grave health following an operation, this was not an issue before the Court.
Secondly, the court must be satisfied that the proposed statutory Will is one which the willmaker would make, or may make, were they to have testamentary capacity. Notable factors which influenced Justice Lyons’ decision in Re Matsis in this regard included:
- Mr Matsis had extensive business experience, being a ‘self-made’ multi-millionaire, who understood the importance of careful asset-protection;
- The draft codicil presented to the Court provided, in general terms, for the estate to pass to and for the benefit of the same persons who were beneficiaries under the original Will and in the same proportions;
- Mr Matsis was extremely proud of his hard work that had resulted in the family fortune, and had often proclaimed his desire for this money to stay ‘in the family’;
Having regard to the factors above, the court recognized the significant tax and asset protection benefits of testamentary trusts that would be afforded to the three grandsons, and ordered that the willmaker’s final Will be amended to reflect this.
It is important to note that pursuant to section 21 of the Succession Act 1981, the Will maker must still be alive for the Court to make an order for a statutory Will.
Ultimately, this case not only highlights the considerable benefits of using testamentary trusts as estate planning tools, but also provides the families of those who have lost testamentary capacity with precedent for seeking that a Will be amended if the current Will is likely to have significant negative consequences for asset protection.
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