Elder law & succession: July 2025

Careful drafting needed for mutual will agreement

To be useful, a mutual will agreement needs to be drafted with careful attention to the parties’ preferred outcome, possible future situations and the law. A recent example of a mutual will agreement appears in Abbott v Abbott [2025] WASC 30 (Howard J), illustrating the pitfalls of inadequate drafting.

Ken Abbott had three children by his first marriage. His second marriage was to Shari. She had one child from a previous relationship. They had no children together. Twenty years into their marriage, Ken and Shari made mirror wills and a mutual will agreement (‘Agreement’). As Shari survived Ken, the main part of the Agreement provided:

‘1. In consideration of my husband Kenneth executing a Will in the form set out in Schedule One of this Agreement and agreeing to act in such a way that property affected by this contract does devolve to:

1) Kenneth’s daughter NORELLE ANITA ABBOTT;

2) Kenneth’s daughter LUANA ELISE ABBOTT;

3) Kenneth’s son BRYCE DESMOND ABBOTT; and

4) my son MATTHEW DANIEL ABBOTT;

(together called “our children”) in the manner and proportions set out in the terms of that Will, unless I consent, or our children (to the extent to which their interests are affected) or their legal personal representative consents in writing to his acting otherwise,

I, Shari agree:

a) to execute a Will in the form set out in Schedule Two; and

b) to act in such a way that property affected by this contract does devolve to our children in the manner and proportions set out in the terms of that Will, unless Kenneth during his lifetime, or thereafter all of our children (to the extent to which each of their interests are affected) or their respective legal personal representative consents in writing to my acting otherwise.’

By the relevant parts of Ken’s will, he effectively gave the entirety of his estate to Shari as the primary beneficiary of a discretionary trust. Two of Ken’s children sought an award of family provision from his estate. The Court determined proper provision for one of the daughters was $245,000, about 8.33 per cent of the net estate. The Agreement had made no arrangement for altering Shari’s will because of this payment. This raised an issue for the Court which led it to seek further submissions (at [410]–[413]). Another glaring omission from the Agreement was the failure to allow an adjustment of the provision for a daughter who received a gift from Shari and the deceased (during his lifetime) of $100,000 (at [428]).

Testamentary contract

The relevant facts in Mills v Dodds [2025] NSWSC 396 (Meek J) were that, during a telephone conversation in October 2020, the later-deceased sister promised her sister, Jennine, that if Jennine lived with and cared for the sister until her death, she would leave half of her estate to Jennine. Jennine travelled interstate, quarantined, lived with and cared for the sister. The sister did not make a will to the effect asserted. Jennine sued the sister’s executor to enforce the alleged promise by alternative claims based on a testamentary contract or equitable estoppel.

The Court determined the request ‘to look after me’ was not too vague or uncertain to afford consideration for the promise. Further, there was:

‘“legally sufficient” consideration in moving to Port Macquarie for the period that she did to take care of the deceased in the form of completing household tasks like the washing, cleaning, shopping, cooking, driving her to appointments, taking her out, and, at some points, showering her and helping her toilet’ (at [475]).

The Court was not satisfied promissory estoppel was established because of concerns around the proportionality of half the estate.

Interface between inheritance contract and family provision order

In 1988,  two parents, Frank and Freda, entered into an inheritance contract (‘deed’) with one of their sons, Garry. Garry owned a unit. By the deed, the parties agreed the unit was ‘deemed’ to be owned by the parents. They would be responsible for the mortgage and outgoings. Importantly, the parents agreed to enter into mutual wills, leaving Garry ‘one half of the nett value of the unit at the date of the death of the survivor’, with their estates otherwise to be left equally to the parents’ three children. The deed also provided the parents would not alter their wills without Garry’s consent.

After the father’s death, the mother made another will. Under that will, the daughter, Helane, received a right to reside in the unit potentially for life, with the eventual proceeds of sale of the unit to be divided in three: one half to Helane and one quarter to the other two children, Martin and Garry. The residue of the estate was given to each of her children equally. The mother died in 2022. Pursuant to the deed, Garry claimed an entitlement to half the nett proceeds of sale of the unit and one third of the residue of the estate. Helane sought a family provision order to provide her with secure accommodation and a sum for contingencies.

The Court, in Knespal v Knespal [2025] NSWSC 464 (‘Knespal’) (Kunc J), determined Garry was entitled to half the nett proceeds of sale of the unit and one third of the residue. It ordered that Helane receive additional provision from the estate. And it ordered that any additional provision (over that payable pursuant to the will) be borne by Garry and secured in his favour over whatever property Helane purchased (including any subsequent property).

The Court explained that, in family provision claims where consideration focuses on the adequacy of provision and whose interests in the estate are to bear the burden of any additional provision, the Court must ‘begin its analysis by determining what comprises the estate, who has an interest in the estate and in what proportion or as to what asset’ (at [67]). (A similar approach was taken in Perton v Walters [2025] VSCA 133 which concerned a potential contingent liability of the estate by virtue of the deceased having given a guarantee.) The Court in Knespal noted the parties’ position that:

‘by making the final will without Garry’s consent, Freda had breached the deed. Therefore Garry has a claim at law for damages … However, because … the [Succession Act 2006 (NSW)] applies to the estate and Garry’s share in it, his measure of damages would have to be discounted to take account of the possibility (and in this case the certainty) of a family provision claim’ (at [69]).

Next, as Freda made a will inconsistent with that which she had promised to make and maintain, upon Frank’s death Freda became subject to a floating obligation which crystallised on her death in a constructive trust for Garry on the terms of the trusts in his favour in her 1988 will (at [71]). Accordingly, Freda’s estate, which vested in her legal personal representative, was subject to the equities in favour of Garry (at [81]). So, whilst Freda’s entire estate was available for the making of a family provision order in Helane’s favour, the starting point of that exercise was that Garry was entitled, pursuant to the trusts of the 1988 will, to the amount which was half of the proceeds of sale of the unit together with one third of the residue (at [83]).

The same outcome, namely that a mutual wills agreement does not preclude a family provision order, was made in Butler v Britt Helena Butler as executrix of the estate of Colin Armitage Butler [2025] WASC 181 (Whitby J) at [7].

In relation to Helane’s claim, she was 63, owned no real property, had very modest means with limited income earning capacity. The Court accepted there were sufficient funds in the estate to provide Helane with a two bedroom unit in the eastern suburbs, an area where she wished to live, having lived there most of her life.

The Court found proper provision to purchase Helane’s accommodation was $1,250,000 (inclusive of stamp duty and legal fees). It found adequate provision for a buffer for contingencies was $150,000. It was agreed between Garry and Martin that Garry bear the burden of that share. The Court considered justice between Garry and Helane required that Garry not lose the benefit of the provision for Helane absolutely. The benefit should return to him on Helane’s death (or earlier repayment by her):

‘The parties should agree on a form of order in the nature of a Crisp order whereby Garry has a first ranking security for the amount of her additional provision that he bears (including accruing interest) over any property which she purchases (or any further property which she purchases with the proceeds of sale of the first property)’ (at [95]).

Will construction

Marie Walkom (the deceased) had three children: David, Gregory and Ian. The deceased made her last will on 29 August 2019. The deceased died on 29 July 2022. Ian died on 21 September 2022, intestate and without issue. He was survived by his wife. The relevant part of the will was clause 6.4. Clause 6.4(a) states ‘subject to paragraph (b)’ the executor is to divide the residue equally among David, Gregory and Ian, ‘who survive me’. Ian survived the deceased by eight weeks but paragraph 6.4(c) states that, if Ian ‘dies … before attaining a vested interest’, then his wife takes half of the share Ian otherwise would have taken and the deceased’s grandchildren take the other half.

The issues before the Court in Earl v Walkom (in the estate of Walkom (Deceased)) [2025] SASC 71 (Stanley J) were whether, by having ‘survived’ the deceased, Ian’s share passed to his estate or whether paragraph 6.4(a) was to be read subject to paragraph 6.4(c) and, if so, whether Ian died ‘before attaining a vested interest’. The first option made paragraph 6.4(c) otiose. Another submission, making 6.4(a) subject to (c) as well as (b), involved inserting words in the will. A third submission made Ian’s share ‘vested’ upon him surviving the deceased but this rendered the words in (c) superfluous.

The Court identified its first task as ascertaining:

‘the basic scheme which the deceased had conceived for dealing with her estate and then to construe the will, if possible, to give effect to that scheme. When the will is read as a whole, it is apparent that a scheme is revealed, the purpose of which is to divide equally the residue of the deceased’s estate between her three sons, and recognises the different circumstances of Ian on one hand and David and Gregory on the other hand. I am satisfied that the deceased intended in making her will to make separate provision for her two sons who had children, as well as Ian who did not have children’ (at [27]).

This accepted the second submission and meant the will provided:

‘a three-limbed test in order for the gift in paragraph 6.4(a) to be effective. Ian, like David and Gregory, must have been alive when the deceased made her will, alive when the deceased died and have attained a vested interest prior to his death in order to take a one-third share of the deceased’s estate in accordance with the testamentary disposition made by paragraph 6.4(a)’ (at [23]).

Whilst there is a presumption in favour of early vesting so a gift does not remain in suspense (at [37]), the Court considered that ‘vested’ must mean more than merely outliving the deceased as that result would mean the condition of vesting in (c) had no work to do (at [39]). To obtain a ‘vested’ interest, the deceased’s estate must have been administered to the point the executors were ready, or ought to have been ready, to distribute the relevant amount to Ian prior to his death (at [40]). That was not the position, so Ian had not obtained a vested interest.

The Court decided it was reasonable for all the parties to put their position before the Court because the litigation was due to the solicitor’s poor drafting of the will. Accordingly, the Court ordered the costs of all parties be paid from the deceased’s estate on an indemnity basis (Earl v Walkom (No 2) [2025] SASC 91).

ASIC report on superannuation fund trustees and death benefit

On 30 March 2025, ASIC released report 806, titled Taking ownership of death benefits: How trustees can deliver outcomes Australians deserve. Over a two-year period ending on 31 March 2024, ASIC reviewed the practices with death benefit claims of ten trustees of superannuation funds regulated by APRA. ASIC selected trustees for industry, public sector and retail funds. Collectively, the trustees managed 38 per cent of total member benefits. They were reviewed again against certain criteria on 31 January 2025. The best, ranked in terms of improved performance, appeared to be the trustees for HESTA and UniSuper. The worst were HostPlus, Nulis and Rest.

Some of the findings of the review were:

• 57 per cent of members (being 5,962,856 members) did not have a nomination, 31 per cent had a non-binding nomination, 6 per cent a non-lapsing nomination, 4 per cent a lapsing nomination and 2 per cent a reversionary pension nomination.
• 23 per cent of binding nominations were invalid. This led ASIC to make the following three recommendations about vetting, prompting and compliance:

‘Trustees should have processes in place to check that nominations have been correctly completed when they are first received and follow up with members if a nomination is invalid.

Trustees who offer binding nominations should consider nudges at different life stages, or periodically, to support members to make or maintain a nomination that meets their needs.

Trustees who offer nominations or renewals online should ensure that appropriate controls are in place to prevent fraud or unauthorised access to the nomination form’ (at 9).

• Claims where the member had a binding nomination (whether lapsing or non-lapsing) were processed faster than claims with non-binding or no nominations (where trustees had to exercise discretion).
• Claims with higher balances were processed faster than claims with lower balances.
• 78 per cent of claim files were delayed due to factors within the trustee’s control.
• The fastest trustee closed approximately 48 per cent of death benefit claims within 90 days whereas the slowest trustee closed only about 8 per cent in that time. The fastest trustee closed approximately 75 per cent of its death benefit claims at 180 days, whereas the slowest trustee had only closed approximately 47 per cent of its claims.
• Some trustees adopted risk averse procedures which may not be in the best financial interests of members.

Declaration of survivorship when the other owner not found

In 1958, William married Kathleen. They purchased real estate as joint tenants. Kathleen was already married. She was arrested for bigamy and William never heard from her again. The marriage had no matrimonial effect (Anne Braithwaite as executor of the estate of Mervyn William Charles Braithwaite (Deceased) [2025] SASC 26 (Stanley J) at [9]).

William married Margaret. William died. Margaret made extensive searches for Kathleen but she could not be found. As his executor, Margaret sought judicial advice concerning the administration of William’s estate.

The Court reasoned that, based on the life expectancy tables, it was unlikely Kathleen survived William as she would have been at least 81 at the date of his death. The Court declared Kathleen predeceased William. He therefore acquired ownership of the jointly owned real estate by survivorship. Margaret inherited the real estate on William’s death.

Distributing a bankrupt estate of a deceased person

Alan Taylor died in 2017. Letters of administration were granted to Louise Bosnyak in 2020. The estate had a debt to Taylor’s former wife that it didn’t pay. She successfully petitioned for his estate to be administered under the Bankruptcy Act 1966 (Cth). The administrator failed to file a statement of affairs. This prevented a bankrupt distribution of the estate without an order of the court. The Court made an order for the distribution of a first and final dividend after publication of a notice to that effect (Vines (Trustee), in the matter of Taylor (Deceased) v Bosnyak [2025] FCA 436 (Hill J)).

Darryl Browne is the principal at BROWNE.Linkenbagh Legal Services and an accredited specialist in wills and estates.