The Problem with a Poorly Drafted Will

Wills and Wives Tales

The recent decision in the case of Re Estate Miletic; Strbik v Strbik [2023] NSWSC 371 is a warning of the unnecessary and expensive litigation that can be avoided by a carefully drafted Will.

In this case, the deceased Joseph Miletic died in 2015 and was survived by his two adult children, Josie and Pauline. His estate worth about $1.5million comprised of two properties in Kingsgrove and about $900,000 in the bank.

Joseph’s Will dated 26 October 2001 appointed his daughter Josie as his executor and left his estate to be equally divided between his two children “subject to the provisions of clause 6” of his Will.  Clause 6 created discretionary trusts for the daughters and went on to state:

6.1 My executors shall set up a fund for each Primary Beneficiary comprising that Primary Beneficiary’s share of my estate;

6.2 Subject to clause 6.3, my Executor may pay all or any part of the income or capital of the Primary Beneficiary’s Fund to any one or more of the Primary Beneficiary’s children or grandchildren in such shares and in such amounts as the Primary Beneficiary (provided that he or she is not deemed under a disability) directs, or failing direction, as my Executor thinks fit, without obligation to make payments to all of those children or grandchildren or to make payments equally among those to whom payment is made;

6.3 If so directed by any Primary Beneficiary who is not under a disability, my Executor shall, from time to time:

6.3.1 …

6.3.2 pay to the Primary Beneficiary all or any part of the Primary Beneficiary’s Fund for the Primary Beneficiary’s own use.

6.5 … when all living children of the Primary Beneficiary have attained the age of 21 years … my Executor shall divide the Fund or the balance of it equally among them…

When Josie’s daughter Dana attained the age of 21 years, she initiated legal proceedings against her mother claiming that the provisions of the Will required Josie to transfer her half of the estate to her children (Dana and Daniel) now that they were both over 21 years.

Josie disputed this, stating that the Will allowed her to retain her half share in the estate for herself.

Who was right?

This was a legal clash over the correct interpretation of the relevant clauses contained in the Will.

Josie’s sister Pauline had a disability (bipolar disorder) that rendered her in need of assistance from time to time. Justice Lindsay inferred that Joseph had drafted his Will in this complex way with the intention of protecting Pauline’s share of the estate.

In his honourable opinion, Justice Lindsay formed the view that the word ‘comprising’ in clause 6.1 was to indicate that the assets of the trust fund were to come from the primary beneficiary’s share of the estate, but it was up to the primary beneficiary to determine what part of their inheritance, if any, was to be transferred to the trust fund.

Further, the primary beneficiary (Josie) was free at any time to direct that her share of the fund be paid to herself.

It was shortly after Joseph’s death, in November 2015, that Josie signed a ‘Direction to Executor’ which directed that her share of the estate was to be paid to her personally and not put into a trust for her children.

The Supreme Court of NSW declared that the proper construction of the Will gave Josie discretion as to what part of her share, if any, she put into the trust, and even if she did put anything into the trust fund, she was also free to pay it to herself.

As such, Dana and Daniel had no interest or right to any of the property of Joseph’s estate.

Lessons

Requiring the Court to determine what provisions in a Will mean causes unnecessary litigation, requiring time and money from both the applicant and the estate. This can be avoided by ensuring that your Will is carefully drafted to avoid any ambiguity or room for interpretation.

You can make an appointment with one of our estate planning solicitors to review your existing Will and/or prepare a new Will that is expertly drafted to not only reflect your wishes but communicate them clearly.      

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