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What makes a will legally valid? 

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CM Law's Ultimate 50 List: Making a Will #14 - What makes a will legally valid? 

Introduction

A will is a vital legal document that specifies how your assets and property will be distributed upon your death. However, for a will to be enforceable, it must comply with specific legal requirements. Non-compliance with these requirements can result in the will being deemed invalid, potentially leading to unintended consequences, such as your estate being distributed according to state laws rather than your wishes. This guide outlines what makes a will legally valid in New South Wales, the key elements required, and presents a real-life case study to illustrate the potential pitfalls of non-compliance.

Key Elements of a Legally Valid Will

1. Testamentary Capacity

The person making the will (the testator) must have testamentary capacity. This means they must be of sound mind, memory, and understanding when creating the will. The testator should know they are making a will, understand the nature and extent of their assets, comprehend who their beneficiaries are, and recognize the implications of including or excluding certain people from the will.

2. Voluntary and Free Will

A valid will must be made voluntarily, without any coercion, undue influence, or fraud. The testator should make their decisions independently and freely, without being pressured or manipulated by others.

3. Proper Execution

For a will to be legally valid in New South Wales, it must be in writing and signed by the testator in the presence of at least two independent witnesses. These witnesses must also sign the will in the presence of the testator. Witnesses should not be beneficiaries under the will to avoid any potential conflicts of interest or claims of undue influence.

4. Understanding and Intention

The testator must clearly understand the nature and effect of the will. This includes knowing that they are creating a legal document that will determine how their estate is distributed after their death. The will should express the testator’s intentions clearly, without any ambiguities or uncertainties.

5. Revocation of Previous Wills

A valid will should contain a clause revoking all previous wills and codicils (amendments to a will) to ensure that the most recent version is recognized as the authoritative document. This prevents any confusion or disputes over which will is valid.

6. Disposition of Property

The will should provide clear instructions on how the testator's assets will be distributed among the beneficiaries. This includes specific bequests, such as gifts of personal property or cash, and the division of the residuary estate, which consists of any remaining assets after all debts, taxes, and expenses have been paid.

7. Appointment of an Executor

A will should appoint an executor, who is responsible for managing the estate, paying debts and taxes, and distributing assets according to the will. The executor should be someone trustworthy, competent, and willing to take on this role. It's also a good idea to name an alternate executor in case the first choice is unable or unwilling to serve.

Consequences of an Invalid Will

  1. Intestacy
    If a will is declared invalid, the estate may be distributed according to the intestacy laws of New South Wales, which may not align with the deceased’s wishes. Under intestacy laws, a strict order of priority is followed, which typically favors spouses, children, and other close relatives, potentially excluding friends, charities, or others the deceased intended to benefit.

  2. Family Disputes and Legal Challenges
    An invalid will can lead to disputes among family members and beneficiaries, resulting in lengthy and costly legal battles. These disputes can damage relationships and create emotional distress, especially if the will’s invalidity was due to a technical oversight or misunderstanding.

  3. Financial Losses
    The cost of contesting or defending a will can be significant, potentially depleting the estate’s value. Legal fees, court costs, and administrative expenses can reduce the amount available for distribution to the beneficiaries, affecting their inheritance.

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: The Consequences of an Invalid Will in New South Wales

Introduction

A recent case in New South Wales illustrates the severe consequences of failing to comply with the legal requirements for a valid will. This case highlights how a simple oversight or mistake can lead to costly and emotionally draining legal battles.

Case Overview

Estate of Anderson [2022] NSWSC 490: John Anderson, a retired engineer, passed away, leaving a will that was handwritten and signed by himself, but not witnessed. His estate, valued at over $4 million, included several properties, a substantial investment portfolio, and personal assets. John’s will attempted to leave most of his estate to his long-time partner, excluding his estranged children from a previous marriage. However, the lack of proper witnessing raised questions about the validity of the will, leading to a legal challenge by his children.

Behaviour of the Participants

John’s children contested the will, arguing that it was invalid due to non-compliance with the legal requirements. They described in court how they felt hurt and betrayed by their father’s decision to exclude them, and were adamant that his partner had unduly influenced him in his final years. Their voices cracked with emotion as they recounted their father’s declining health and their concerns that he was not of sound mind when the will was made.

John’s partner, on the other hand, tearfully defended the validity of the will, insisting that it reflected John’s true wishes. She described their relationship as one built on love and trust, expressing her anguish at being accused of manipulating him. Her voice quivered with desperation as she pleaded with the court to recognize the will’s legitimacy. The courtroom was filled with tension, as both sides presented their cases with deep emotion, each convinced they were acting in line with John’s intentions.

Legal Process and Court Involvement

The Supreme Court of New South Wales was tasked with determining whether John’s will was valid despite not being properly witnessed. The legal process included:

  • Examination of the will’s authenticity and the circumstances surrounding its creation, including evidence from friends, neighbors, and medical professionals.

  • Consideration of John’s mental capacity and whether he understood the nature and effect of the will when it was created.

  • Efforts to mediate a settlement between the children and John’s partner, which ultimately failed, leading to a lengthy court battle.

Financial Consequences

The legal battle over John’s estate resulted in significant financial costs. Legal fees and court costs totaled over $400,000, while the ongoing dispute delayed the distribution of assets, causing further losses due to market fluctuations and maintenance expenses. The estate included a waterfront property valued at $2 million, which had to be sold at a reduced price due to the prolonged legal proceedings and lack of proper upkeep. The total financial impact on the estate exceeded $600,000, significantly reducing the inheritance available to the intended beneficiary.

Conclusion

The Estate of Anderson case underscores the importance of complying with legal requirements when creating a will. A failure to adhere to these requirements can result in the will being declared invalid, leading to unintended consequences, costly legal disputes, and a diminished estate value. Ensuring that a will is properly executed and regularly reviewed can help prevent such challenges and ensure that your wishes are honored.

Statistics on Validity Issues in Wills in NSW

  1. Invalid Wills: Approximately 20% of wills in NSW are found to be invalid due to non-compliance with legal requirements.

  2. Common Grounds for Invalidity: The most common grounds for invalidity are lack of proper witnessing (40%), lack of testamentary capacity (30%), and lack of proper execution (20%).

  3. Impact on Estate Value: Estates with invalid wills typically lose 15-25% of their value due to legal costs, delays, and the need to resolve disputes.

  4. Disputes Involving Invalid Wills: Around 35% of estate disputes in NSW involve issues related to the validity of the will.

  5. Average Legal Costs of Validity Disputes: The average legal cost of resolving disputes over the validity of a will in NSW is around $150,000.

  6. Time to Resolve Validity Disputes: Disputes over the validity of a will take, on average, 12-24 months to resolve.

  7. Wills Made Without Legal Advice: Approximately 50% of invalid wills in NSW were made without professional legal advice.

  8. Use of Mediation in Validity Disputes: Only about 30% of validity disputes are successfully resolved through mediation.

  9. Intestacy Due to Invalid Wills: Around 10% of estates in NSW result in intestacy due to invalid wills.

  10. Awareness of Legal Requirements: Less than 60% of Australians are aware of the legal requirements for a valid will.

Essential Resources: Government and Non-Profit Organizations

Government Resources:

Non-Profit Organizations: