Wills & Estates Law Update: new succession legislation for NSW

Succession Bill 2006 - Important new law for NSW sooner than expected!

The Succession Bill 2006 passed through the Legislative Assembly on 26 September 2006 and will be debated soon. It is expected that the proposed Succession Act will be passed before the end of 2006. The Act will not be proclaimed to commence until 2007 to provide a reasonable period for implementation and education arrangements.

The Bill is the first of four bills that will significantly change the law of succession in NSW. It represents a step closer to achieving consistency of succession law across Australia. The next bill will deal with uniform family provision laws. This will be followed by a bill that deals with intestacy and the final bill will deal with estate administration. The remaining 3 bills are expected to be introduced into Parliament in the next year or so.

What are the main important changes?

1. The Bill repeals those provisions of the Wills, Probate and Administration Act 1898 relating to wills. The Bill also renames the remaining provisions of that Act as the Probate and Administration Act 1898.

2. New rules about beneficiaries who witness wills. The previous interested witness rule is retained but has been changed by clause 10 so that it does not void a beneficial gift in a will to the spouse of a witness or a person claiming under the spouse of a witness. Also, clause 10(4) provides that a beneficial gift does not include a direction in a will for the payment of reasonable remuneration to an executor, administrator, legal practitioner or other person acting in relation to the administration of the testator's estate.

3. The provision of statutory guidance of the matters that the Supreme Court may consider when authorising a minor to make a will. Clause 16(4) provides that before the Court authorises a minor to make a will it must be satisfied that the minor understands the nature and effect of the proposed will, the extent of the property to be disposed under it, that the will reflects the minor's intentions and that it is reasonable in all the circumstances that the order should be made.

4. The conferral of new powers on the Supreme Court to make orders authorising the making, alteration and revocation of wills for people who lack testamentary capacity (clauses 18 - 26). It will be a two-stage process - the seeking of leave to make an application for an order (clause 19) and the making of an application once leave has been obtained (clause 18). However, clause 20 will enable the two applications to be merged to expedite the legal proceedings and to minimise legal costs. Whilst such applications can be made by "any person", the person must obtain the Court's permission to proceed with their application. The information required in support of an application for permission to proceed to apply for an order is set out in clause 19(2) and that information must be provided unless the Court otherwise directs. Clause 22 sets out certain matters that the Court must be satisfied about before it will give permission for an application for an order to proceed. Any Court authorised will for a person who lacks testamentary capacity will be signed for that person by the Registrar of the Court and sealed with a seal of the Court.

5. Provisions relating to the admission of limited evidence to aid in the interpretation of wills. Clause 32 permits the Court to admit extrinsic evidence of the testator's actual intention for the purpose of construing a will, where the language used is meaningless or ambiguous (either on the face of the will or in the light of surrounding circumstances).

6. New rules about survivorship (clause 35) which require a beneficiary to survive a willmaker by 30 days before receiving a benefit under the deceased willmaker's will, subject to a contrary intention appearing in the will. Complimentary to these new rules is the proposed section 92A to be inserted into the Wills, Probate and Administration Act by Schedule 2 of the Bill. This new section will enable an executor or administrator to make distributions for the proper maintenance, support or education of certain beneficiaries dependent on the deceased willmaker within 30 days from the date of death of the willmaker. Under section 92A(3), such distributions can be made even if the executor or administrator has notice of an intended or pending claim under the Family Provision Act 1982. The executor or administrator will not be liable for any such distributions made in good faith.

7. The revision of the law relating to foreign wills to bring NSW law relating to choice of law issues into line with the law in other jurisdictions. Clauses 47 ? 50 replaces and essentially restates the formal validity of wills provisions in the Wills, Probate and Administration Act.

8. New provisions for the deposit of wills. Clause 51 allows for any person to deposit a will in the office of the Supreme Court Registrar provided certain information is with the will and the fee prescribed by the regulations is paid. Clause 52 provides when wills must be delivered by the Registrar to the original party that deposited the will or some other authorised person.

9. New provisions about who is entitled to see a will on the death of the willmaker (clause 54). Such people now include:

• any person named or referred to in the will, whether as beneficiary or not;
• any person named or referred to in any earlier will as beneficiary;
• any person (including a creditor) who has or may have a claim at law or in equity against the estate of the deceased person.

10. Schedule 1 of the Bill contains savings, transitional and other provisions consequent on the enactment of the proposed Succession Act. Schedule 2 amends the Wills, Probate and Administration Act and makes other amendments consequential on the enactment of particular provisions of the proposed Succession Act. Schedule 2 makes consequential amendments to the Acts and regulation specified in the Schedule.

Bartier Perry will continue to monitor and report on this important period of change for the law of succession in NSW. It is not too early to start identifying documents and precedents that may require amendment as a result of the new law.