Succession law’s inheritance: exploring its foundations and future

The late Justice Powell, probate judge in NSW during the 1980s and ’90s (and later Judge in Appeal), was wont to complain that ‘modern practitioners’ often did not understand the basis of many issues in succession and, therefore, made mistakes. As his Honour said in one case:

‘Although this would seem to involve merely a pleading question, what is involved is, as it seems to me, a matter of substance in respect of which there is considerable misapprehension on the part of members of the legal profession, and, that being so, it seems to me that I ought, in this judgment to devote a little more time to considering the matter than one might do on a normal pleading application’ (Winter v Crichton (1991) 23 NSWLR 116 at 116).

That particular case concerned the doctrine of undue influence in probate, which the pleaders confused with undue influence in equity. Powell J explained their different origins and requirements. Undue influence is not presumed in probate, as it can be in equity, but must be proved by the person asserting it. Undue influence in probate generally requires influence at the level of force or coercion destroying free agency.

Canon law, common law and equity

The crux of this distinction comes from the fact that the law of succession in Australia has very long antecedents in different types of law. The will itself comes to us from Church law and the original view that dying intestate could be a sin or even, possibly, a crime. Making a will went with the final confession and by the 13^th century in much of England (and elsewhere) the custom of ‘legitime’ was in place: one third each for the deceased, the widow and the children. The third for the deceased was usually left to the Church for the purpose of saying prayers for the soul of the deceased, and the Church became controller and then executor (usually in the person of the Bishop) of the will. The Church controlled the disposition of chattels because the common law controlled the disposition of real property. (Note chattels real, such as leases, were regarded as personalty and came under Church jurisdiction).

This meant two legal systems were dealing with inheritance—canon or Church law and common law. The Church law had jurisdiction over wills and personalty for centuries without interference from the common law. The Church distributed the intestate’s chattels. The common law was concerned with land and did not allow land to be inherited until 1540, although the Church decided whether marriages were valid and children legitimate.

The third area of law to join the party was equity. After the Reformation, the Church courts were weakened by a series of prohibitions by the common law courts. The common law courts, however, did not have the machinery that equity did to supervise the administration of estates, so the equity courts began to exercise a significant jurisdiction in intestacy, administration of estates and construction of wills.

Most of this unwieldy system came to Australia when the colony of NSW was established. The First Charter of Justice 1787 (UK) (‘First Charter’) created a Court of Civil Jurisdiction which had the power to deal with wills and intestacy of persons dying with personalty in NSW.

There was no provision about land in the First Charter. The New South Wales Act 1823 (UK) similarly invested the Supreme Court with power to grant probate or letters of administration with respect to personalty. Probate could only give title to personalty until the Probate Act of 1890 (NSW) (even though a will could operate as a conveyance).

What all this means is that, in succession law, it is vital to know from which stream of law a doctrine comes. Is it a common law doctrine? Is it a Church law doctrine? Or is it a doctrine of equity? On top of this there is a statutory layer which, in turn, may sometimes be influenced by one of the other sources of law. The confusion about undue influence referred to above can be easily resolved if one knows these sources. That is, undue influence, as a probate issue, comes from Church law, not equity. Equity construes wills and does not determine their validity.

Other issues require clear understanding of the sources of the law. For example, one of the rules of construction is the doctrine of satisfaction of legacies by legacies. This is a common law doctrine which arises where two gifts in a will look the same. It must be distinguished from the equitable doctrines of ademption by satisfaction which are used to deal with meeting an obligation by a later gift in a will. The rules are different, but both are commonly and confusingly just called ‘satisfaction’.

Similarly, the fact that only equity could construe wills means the probate court does not have jurisdiction in relation to construction of wills (except for commissions for legal personal representatives). When the Supreme Court had up to nine divisions which separated out probate and equity this was easy to see but, since the change to a simple separation of the Common Law and Equity divisions, the probate court has, confusingly, been settled within the Equity division. This exemplifies the fusion of common law and equity and, in the future, these doctrines may just be separate rules and seem even more arbitrary in their differences than they do today.

Old and new

Some doctrines of succession law are extremely old. The will itself goes back to Roman times. Executorship comes to us from Roman law which had a massive influence on Church law. It is easy to see this by looking at the preponderance of Latin in relation to executorship. It developed in the Church courts because in most cases where the deceased made a will, he gave money to the church (for prayers to be said for his soul) and the Bishop managed the will and hence became the executor. The Church law’s role in managing executors was taken over by Equity in the 17^th century but many of the particular laws applying to wills and executorship can be traced back for centuries.

An executor is appointed by will and an administrator is appointed by the court. Although the role is ostensibly to administer the estate in each case, some differences exist which can be confusing. For example, if an executor dies leaving the estate administration incomplete, the executor’s executor must take on that administration as well as that of the estate of which he was originally executor. This is known as the chain of representation. This rule does not, however, apply to administrators. Similarly, an administrator who began proceedings before the grant of administration was made would find the proceedings considered incompetent, but an executor was traditionally considered able to commence proceedings before the grant was made. (Note, the complete vesting of the estate in the Public Trustee in NSW may mean the executor cannot commence proceedings before probate is granted (Byers v Overton  Investments Pty Ltd [2001] FCA 760 but this has been doubted by Powell JA in Estate of Ludwig Gersch; Gersch v Roberts (1995) 35 NSWLR 631 and by White JA in Deigan v Fussell [2019] NSWCA 299). These seemingly arbitrary, though historically sourced, differences—caused by the sources of the law being canon law and statute respectively—led to the National Committee on Uniform Succession Law recommending, in a 2009 report, that the roles of executor and administrator be assimilated as far as possible.

Other doctrines are very new, like the statutory development of recognition of the validity of informal wills through the dispensing power. This alarmed my English colleagues at a recent symposium, although the UK Law Commission has now recommended a dispensing power in a recent report. Statutory recognition of Aboriginal customary law for intestacy in Part 4.4 of the Succession Act 2006 (NSW) (‘Succession Act’) is also new. In this case, the recognition (rather than the law) is new, since Aboriginal customary law itself has very long antecedents.

Comparison with other countries show that NSW in particular, and Australia in general, have been extremely progressive in their succession law. For example, NSW recognised same-sex marriage and relationships in succession law well before most European countries did so. Similarly, under section 46 of the Succession Act, NSW has, since 2006, provided for trans persons to be protected where the testator specified a gender in a will. To my knowledge this is not a common provision around the world, even now.

Comparison with other countries shows us some other things as well. The common law world traditionally thought of itself as the bastion of testamentary freedom, quite distinct from other traditions. But much of the common law world, led by New Zealand, now has family provision or testator’s family maintenance law. Family provision law means the testator no longer has an unfettered testamentary power and some would argue this has created forced succession law, like that of the civil law systems. And yet, family provision law, compared with forced inheritance in other systems, is distinctive in its high level of discretion. Family provision law is now the most common way of challenging wills in Australia. The question remains: should the testator be entitled to do as they wish with their property? If the testator has a right to distribute their property as they wish, do their children, for example, have a right to inherit? Surely these two rights cannot coexist or can only coexist in proportion.

What’s next?

Change is as inevitable as death. Law has always adapted to the changes in the world around it. As the digital world develops around us, it raises significant questions about succession law. Digitally signing and witnessing wills was provided for in the pandemic, but only NSW and Victoria continue to allow it. This is useful as the population ages and finds it harder to travel to sign and witness wills. The process of ameliorating the rules on formalities has been continuing since before the Wills Act 1837 (UK). The question is, where should the line hold to ensure that it really was the testator who made the will, since we know that few fraudulent or forged wills lack formalities? This seems to point to a need for evidence of the testator’s actual intention as well as evidence of the process of the making of the will, so solicitors’ notes of the process are increasingly vital for ensuring the right of testamentary freedom.

The digital world raises some other fundamental questions for succession law. As digital platforms continue to generate novel products, items and rights, mostly based on contracts which do not pass property, how is succession law, which is the process of passing property on death, going to work? The concept of property is fraught with uncertainty for many digital assets. Cryptocurrency, for example, has been recognised by the Australian Taxation Office as taxable property but there is still some uncertainty about whether digital assets should be recognised as property in general, since they generally don’t fit into the classifications of property we usually use—choses in action and choses in possession. As I write, the Property (Digital Assets etc) Bill (UK) has passed the House of Lords and is in the House of Commons in committee stage. It provides that

‘A thing (including a thing that is digital or electronic in nature) is not prevented from being the object of personal property rights merely because it is neither a thing in possession, nor a thing in action’ (section 1(a) and (b)).

If the bill passes, it will resolve most of the uncertainty about digital assets as property in the UK and perhaps we will follow. The contractual terms of many platforms may still remain problematic in their refusal to pass more than licences, and these items—including email accounts, smart media pages, etc—will continue to be unavailable for inheritance.

Does it work?

Australia’s multiculturalism raises some pressing issues about succession law. The most recent census showed over half of Australians were born or had parents born overseas. The prospect of death tends to push people back to their roots and this may affect their view of what they think should happen after death. This is particularly true for Muslims and Jews in Australia who are the most likely immigrant groups to have ideas about inheritance influenced by a religion that differ from the mainstream Australian Christian-based common law. Of course, Indigenous people also may have strong views that differ from common law. How people with different cultural backgrounds navigate a dominant legal system is only beginning to be addressed directly in our inheritance law. Testamentary freedom makes this relatively easy, for the most part, because it allows religious preferences to be incorporated into a will and therefore become enforceable, subject to the limits of the common law.

Succession law suffers from the fact that it turns on death. This in turn makes many people unwilling to think about it. It also makes it quite hard to get politicians to see that legislation has any electoral benefit for them. And yet, we all know we will die, and the purpose of the law of succession is to make the death of a loved one less likely to cause problems for the people left behind. There is talk of the ‘great wealth transfer’ coming as the baby-boomers die, usually with the assumption that this will also create a huge number of inheritance disputes. Statistics about demographic trends, however, need to be considered properly. When considering rates of dispute for the purpose of asking whether a person is likely to be involved in one, the question should be asked in terms of what rate of dispute per head of population is likely, rather than the rate of disputes appearing in court. As the population increases, an increased rate appearing in court may not be significant per head of population.

It may be that the concern that wills are constantly and increasingly disputed is not entirely justified. Consider these statistics from the Supreme Court of NSW 2022 Annual Review. According to HealthStats NSW, there were 62,845 deaths of NSW residents in that year, and the population of NSW was 8,153,000. Despite the press concern about interference with testators’ wishes and wealthy warring families, the number of disputes is relatively low. (Note, the number of deaths where a will or intestacy is involved would be reduced by: deaths of children in most cases; people who owned real or other property in joint tenancy, and otherwise only had superannuation which was dealt with by nomination; and, of course, those whose estates were not large enough). The uncontested probate list had 30,305 filings and 25,945 disposals. There were 27,157 filings for probate and 2,755 filings of letters of administration. There were 338 contested filings of which 331 were disposed of. The family provision list was bigger, with 897 filings and 331 disposals. This means that out of 30,305 filings there were 1235 disputes that the court had to deal with: that is 4.07 per cent of filings. That suggests that, for the vast majority of people, the succession process works.

Conclusion

Justice Powell thought succession law should be compulsory for every law student, as it has been in the past. He thought that, if this were the case, lawyers would understand the law better and he would not have been so exasperated. My view is that we need at least enough lawyers to study succession law in detail so they can be the ‘leaven in the dough’ of the profession, assisting those who have not studied that relatively unforgiving subject to avoid the many pitfalls it contains.

This article has taken a four-dimensional view of succession law in NSW to highlight its historical patterns. Despite looking like a system of merely arbitrary rules, it has its own logic and coherence. The law of succession is a superb example of necessary complexity in law which, when one reaches the fundamentals, can be seen to be not arbitrary at all. The statistics discussed above actually suggest that our current law of succession— a mix of the old and the new—does sustain an effective process for dealing with that great inevitability which faces us all.

Prue Vines is a professor in the School of Private & Commercial Law, Faculty of Law & Justice at UNSW.