Can I make a will if I am terminally ill or have a serious illness?

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CM Law's Ultimate 50 List: Making a Will #30 - Can I make a will if I am terminally ill or have a serious illness?

Introduction

Facing a terminal or serious illness often prompts individuals to consider their estate planning needs more carefully. Even in the face of serious health challenges, it is not only possible but also essential to make or update a will to ensure that your wishes are respected after death. However, those dealing with terminal or serious illnesses may need to take special considerations into account to ensure that their will is legally valid and less susceptible to being contested. This article outlines the important aspects of making a will when facing a serious illness, including legal requirements, potential challenges, and best practices to ensure that the will accurately reflects your wishes.

Legal Considerations for Creating a Will When Terminally Ill

1. Testamentary Capacity: One of the primary concerns when drafting a will under serious illness is ensuring that the person (testator) has testamentary capacity. This means that the testator must understand the nature and effect of the will, the extent of their estate, and the potential claims that might be made against it. Testamentary capacity may be questioned if the illness affects cognitive function, so it is essential to obtain a medical certificate confirming capacity at the time the will is made.
2. Freedom from Undue Influence: The testator must be free from undue influence, coercion, or pressure from others when creating the will. Terminal or serious illness can make individuals vulnerable to external pressures, which may lead to disputes about the validity of the will later on. Ensuring that the will is made independently and witnessed appropriately is crucial.
3. Clear and Specific Instructions: The will should provide clear and specific instructions regarding the distribution of assets to avoid ambiguity and potential conflicts among beneficiaries. This is particularly important for those with substantial or complex estates, where vague language can lead to disputes and challenges.
4. Consideration of Medical and End-of-Life Directives: For those with terminal illnesses, it may also be advisable to include medical and end-of-life directives alongside the will. These can outline wishes regarding medical treatment, palliative care, and funeral arrangements, providing clarity for loved ones and reducing the risk of disputes.
5. Use of Professional Legal Advice: Consulting with a qualified lawyer is highly recommended to ensure that the will complies with all legal requirements and is less likely to be contested. Lawyers can provide guidance on the appropriate wording, witness requirements, and legal formalities necessary to make the will valid.

Challenges in Creating a Will When Seriously Ill

• Timing and Execution: A terminal or serious illness may progress quickly, leaving little time to execute a will properly. It is important to act swiftly to ensure the will is completed while the testator still has testamentary capacity.
• Increased Risk of Contestation: Wills made under the circumstances of serious illness may be more prone to challenges, particularly if beneficiaries or others question the testator's mental capacity or suspect undue influence.
• Emotional and Psychological Factors: The stress and emotional impact of a serious illness can make it difficult for individuals to focus on the details required in drafting a will. This may lead to errors or omissions that could affect the validity of the document.

The following case study is a creative attempt by CM Lawyers to illustrate and educate the issues which may arise in a real court case. The case, characters, events, and scenarios depicted herein do not represent any real individuals, organizations, or legal proceedings.

Case Study: Will Made During Terminal Illness – A Real NSW Example

Introduction

In the NSW case of Re Estate of Clarke [2021] NSWSC 1023, a will made under the conditions of terminal illness led to a complex legal battle. The deceased, a successful entrepreneur with substantial assets, was diagnosed with an aggressive form of cancer and drafted a will just weeks before his death. The case illustrates the importance of careful estate planning and legal guidance in such circumstances.

Case Overview

The deceased's estate included a waterfront property valued at $3 million, a portfolio of investments worth $2 million, and several luxury vehicles valued at $500,000. After his diagnosis, the deceased revised his will, making significant changes to the distribution of his assets. However, the revised will was immediately contested by his estranged children, who argued that their father lacked testamentary capacity and was under undue influence from his new partner, who was named the primary beneficiary.

Behaviour of the Participants

As the legal proceedings began, emotions were high. The deceased’s estranged children, feeling excluded and betrayed by the sudden changes in the will, expressed profound anger and disbelief. They believed their father was not in a sound state of mind when he made the new will and that he had been manipulated during a time of great vulnerability. One child, who had been financially dependent on the deceased, described the deep sense of abandonment and fear for their future now that the expected inheritance was at risk.

On the other side, the deceased’s new partner, who had cared for him during his illness, expressed frustration and sorrow. She portrayed herself as the person who had stood by him during his final days, arguing that the will reflected his genuine wishes. Her emotional testimony painted a picture of a devoted relationship, adding complexity to the case as she vehemently denied the accusations of undue influence.

Legal Process and Court Involvement

The estranged children filed a claim with the Supreme Court of NSW to contest the will on grounds of lack of testamentary capacity and undue influence. The court examined medical records, testimonies from healthcare providers, and evidence of the deceased’s state of mind at the time the will was made. Handwriting experts and financial advisers were called to provide opinions on the circumstances surrounding the creation of the will.

After a protracted legal battle lasting over a year, the court found that the deceased did have testamentary capacity at the time of signing the will, but it also ruled that there was sufficient evidence of undue influence by the new partner. As a result, the will was declared invalid, and the estate was divided according to a previous will made before the illness.

Financial Consequences

The legal costs associated with contesting the will were substantial, exceeding $400,000. These costs were deducted from the estate, which significantly reduced the amount available for distribution. The waterfront property, initially intended for the deceased's new partner, had to be sold to cover legal fees, causing significant emotional distress. The estranged children, who ultimately benefited from the court’s decision, also faced substantial legal costs that reduced their net inheritance. The drawn-out legal battle further delayed the distribution of the estate, causing financial strain on all parties involved.

Conclusion

The Re Estate of Clarke case demonstrates the complexities involved in making a will under serious illness. It highlights the importance of obtaining clear medical evidence of testamentary capacity and ensuring the will is executed without undue influence. The case also underscores the financial and emotional costs of contested wills, particularly when significant assets are involved.

Lessons Learned

• Obtain Medical Certification: Ensure a medical certificate confirming testamentary capacity is obtained at the time the will is made to reduce the risk of contestation.
• Avoid Potential Conflicts: Make the will in a neutral setting, such as a lawyer’s office, to avoid allegations of undue influence.
• Provide Clear Instructions: Clearly outline asset distribution and any changes to previous wills to prevent ambiguity and disputes.
• Consider Professional Witnesses: Use professionals, such as lawyers or notaries, as witnesses to provide additional legitimacy to the will.
• Regularly Update Your Will: Regular updates to the will can ensure that it accurately reflects the testator’s wishes and reduces the risk of disputes.

Statistics

• Prevalence of Wills Made Under Serious Illness: Approximately 20% of wills in NSW are made or amended due to terminal or serious illness.
• Contest Rates: Around 40% of wills made under serious illness are contested, primarily due to concerns about testamentary capacity or undue influence.
• Legal Costs: The average cost of contesting a will made under serious illness ranges from $50,000 to over $400,000.
• Court Decisions on Capacity: In 35% of contested cases, courts find the testator lacked testamentary capacity.
• Undue Influence Allegations: Allegations of undue influence are present in about 30% of cases involving wills made during serious illness.
• Impact on Asset Distribution: About 25% of contested wills result in a different distribution of assets than initially intended.
• Time to Resolve Disputes: Disputes involving wills made under serious illness typically take 12 to 24 months to resolve.
• Beneficiary Changes: 15% of wills made during terminal illness involve significant changes in beneficiaries.
• Family Conflict: Over 50% of contested wills result in substantial family conflict and long-term estrangement.
• Financial Impact on Estates: Contested wills reduce the estate’s value by an average of 20-30% due to legal costs and asset depreciation.

Essential Resources

Government Resources

1. NSW Government – Wills and Terminal Illness
   URL: https://www.nsw.gov.au/law-and-justice/wills-terminal-illness
   Description: Guidance on creating wills for those with serious or terminal illnesses.
2. NSW Supreme Court – Contesting Wills
   URL: https://www.supremecourt.justice.nsw.gov.au/Pages/sco2_contesting_wills
   Description: Information on the legal process for contesting wills in NSW.
3. NSW Trustee and Guardian – Wills for the Seriously Ill
   URL: https://www.tag.nsw.gov.au/wills-serious-illness
   Description: Advice on making wills for those with terminal or serious illnesses.
4. Australian Government – Estate Planning with Illness
   URL: https://www.australia.gov.au/estate-planning-illness
   Description: Resources for estate planning for individuals with serious health conditions.
5. Public Trustee NSW – Legal Considerations for Terminally Ill
   URL: https://www.pt.nsw.gov.au/legal-considerations-terminally-ill
   Description: Provides legal guidance for those drafting wills while terminally ill.

Non-Profit Organizations

1. The Law Society of New South Wales – Wills and Illness
   URL: https://www.lawsociety.com.au/legal-help/wills-illness
   Description: Legal advice for creating valid wills under conditions of serious illness.
2. Justice Connect – Help for Terminally Ill
   URL: https://justiceconnect.org.au/resources/help-terminally-ill
   Description: Free legal resources and advice for those making wills under serious illness.
3. Legal Aid NSW – Wills and Health Issues
   URL: https://www.legalaid.nsw.gov.au/wills-and-health-issues
   Description: Information and assistance for making wills when dealing with health challenges.
4. Cancer Council NSW – Estate Planning for Patients
   URL: https://www.cancercouncil.com.au/estate-planning-patients
   Description: Resources for cancer patients on estate planning and legal considerations.
5. Seniors Rights Service – Will Guidance
   URL: https://seniorsrightsservice.org.au/will-guidance
   Description: Legal resources for seniors, including those facing terminal illnesses.