Wills & Estates Law Update: Family provision, organ/tissue donation and family trusts

Family Provision - High Court Case

The debate over the role of "moral duty" in determining entitlement under family provision legislation continues. A majority of the High Court has recently referred to the value and usefulness of the concepts of "moral duty", "moral obligation" and "moral claim" in family provision cases.

The case of Vigolo-v-Bostin [2005] HCA11 (9 March 2005) involved a family provision claim under the Inheritance (Family and Dependants Provision) Act 1972 (WA). The claim by an able-bodied adult son of the testator, and a man of substantial means was based not upon financial need, but upon a moral claim. The moral claim was said to have arisen out of previous business and family dealings. The High Court rejected the appeal/claim because of the son's age and financial circumstances when compared to the situation of his siblings.

The case is interesting in that Chief Justice Gleeson and Justices Callinan and Heydon have now expressed the view that concepts such as "moral duty" have value and usefulness in family provision cases. However, both Justices Gummow and Hayne thought it was better not to use those terms and to adhere to the statutory language of family provision legislation.

The view of Chief Justice Gleeson is reflected in the following passage:-

"In explaining the purpose of testator's family maintenance legislation, and making the value judgments required by the legislation, courts have found considerations of moral claims and moral duty to be valuable currency. It remains of value, and should not be discarded. Such considerations have a proper place in the exposition of the legislative purpose, and in the understanding and application of the statutory text. They are useful as a guide to the meaning of the statute. They are not meant to be a substitute for the text. They connect the general but value-laden language of the statute to the community standards which give it practical meaning. In some respects, those standards change and develop over time. There is no reason to deny to them the description "moral".

The comments of the High Court are applicable to the NSW family provision legislation. In family provision cases, it is essential to closely refer to the legislation when considering claims. However, concepts such as "moral duty" can help in explaining the purpose of family provision legislation.

Body Ownership and Organ/Tissue Donation

The legal response to body ownership and organ/tissue donation is complex and is still evolving.

Issues concerning the prolonging of life, burial or cremation and whether to make one's organs or tissues available for medical or scientific purposes are all highly topical in today's environment.

The traditional Australian legal view has been there is no property in a dead body (see Doodeward-v-Spence (1908) 6CLR407). Therefore, directions to an executor on the disposal of the body are not binding.

The legal position relating to body ownership now needs to take into account the legislative framework relevant to the donation of organs/human tissue for transplantation and/or scientific research and the conduct of post-mortem examinations. Relevant NSW statutes include:-

• Anatomy Act 1977.
• Coroners Act 1980.
• Human Cloning and Other Prohibited Practices Act 2003.
• Human Tissue Act 1983.

The tragic death of cricketer David Hookes and the fact that he was an organ donor was the catalyst for change to the Australian Organ Donor Register administered by the Health Insurance Commission on behalf of the Australian Government.

The Australian Organ Donor Register is a simple way for people to record their consent (or objection) to becoming an organ and/or tissue donor.

The Australian Health Ministers have agreed that from July 2005 the Australian Organ Donor Register will be operational as a consent register. It will enable individuals to record their legal decision to become an organ or tissue donor after death. The Health Ministers have agreed the Register will be the only national register for organ and/or tissue donation.

The Australian Organ Donor Register will ensure that a person's consent (or objection) to donating organs and/or tissue for transplantation can be verified 24 hours a day, 7 days a week by authorised medical personnel, anywhere in Australia.

Continuing medical advances challenge the law to keep pace with those advances. The continuing legal response to body ownership and organ/tissue donation needs to be consistent and workable.

Implications

Even if individuals have expressed an intention to donate organs/human tissue by some other means in the past (for example on a drivers licence), best practice dictates that those wishes be made known to family and executors, be recorded in the person's Will and also recorded on the Australian Organ Donor Register.

Family Trusts and Disclaimers

A recent Federal Court decision provides some general guidelines on beneficiaries validly and effectively disclaiming entitlements under a discretionary family trust.

In Commissioner of Taxation-v-Ramsden [2005] FCAFC39 the principal issue for determination was whether specified beneficiaries of a family trust who had signed Deeds of Disclaimer had effectively disclaimed their entitlement to a share of income in the family trust such that no liability to tax was imposed on them under s.97(1)(a) of the Income Tax Assessment Act 1936 (Cth) for a particular tax year.

In finding that the Deeds of Disclaimer were invalid and ineffective, the Court stated:

• a beneficiary may disclaim an entitlement on its coming to his or her knowledge. At law an effective disclaimer operates retrospectively, and not merely from the time of disclaimer;
• a beneficiary may disclaim an entitlement to the net income of a family trust without necessarily disclaiming all of the other entitlements which accrued or might accrue to the beneficiary under the trust; and
• a disclaimer must be made within a reasonable time of the beneficiary becoming aware of the entitlement under the family trust (a period of about 3 years in which the beneficiaries failed to disclaim their entitlements was held to be well in excess of a reasonable period).