As the recent case of Moore v Aubusson heard in the Supreme Court of New South Wales highlights, regularly updating your Will is a process that ensures the proper distribution of your estate.
In this case, an elderly lady (Mrs Murphy) made a promise that if her neighbours cared for her so that she could remain living in her own home, that she would make gifts to them out of her Estate. The neighbours alleged that Mrs Murphy told them that she would ‘see to it in my Will, that everything goes to you.’
Mrs Murphy, however, failed to update her Will in a way that reflected this arrangement. Her Estate was sizeable and included her Sydney waterfront property. Her Will left $25,000.00 to her neighbours and the rest of her estate to her siblings.
As a result, the neighbours started Court proceedings to enforce the terms of the promise. Whilst the Court did not completely agree with the neighbours, it did find that the neighbours should receive Mrs Murphy’s waterfront property.
Now you may be wondering how a verbal promise can override the terms of Mrs Murphy’s Will? The neighbours were able to rely upon a legal principle of equitable estoppel which, essentially involves the following:
- Person A makes a promise to Person B, which requires Person B to do something in exchange. Person B’s end of the bargain needs to be substantial but does not have to be able to be measured with a dollar figure.
- Relying upon this promise, Person B completes what has been asked of them.
- Person A does not come good on the promise.
- Person B looks to the Court to put them in the position they would have been in, had Person A held up their end of the promise.
The Court in this case noted that ‘he detriment of an ever-increasing burden of care for an elderly person, and of having to be subservient to his or her moods and wishes is very difficult to quantify in money terms’. The Court held that there was a clear representation by Mrs Murphy of her intentions and that it would be unconscionable for the deceased not to have followed through with the promise she made
How is this relevant to me?
Mrs Murphy was a widow and had no children. Her siblings were also elderly and lived some distance away. She relied upon her neighbours to help her in her old age. At what point though does an arrangement become more than kind neighbours or friends helping someone out and turn into something more formal?
The difficulty with this case is that the Court had to reconcile a verbal promise with the terms of Mrs Murphy’s Will. This is not an uncommon situation and applies to families as equally as it does to more extended relationships.
The cost and heartache of litigation could have been avoided by both Mrs Murphy’s neighbours and her Executors if the promise had been adequately documented.
The takeaway point for a Willmaker (or testator) is to carefully cast your mind over what you want to happen with your Estate when you pass away. Have you made promises to someone about your Estate? What do your current personal circumstances look like? Does your Will reflect this?
If not, updating your Will is an important process that you should instigate.
Equally, if you have helped someone out on the basis that they will ‘look after you’ and their Will does not reflect your understanding of this arrangement, there may be legal remedies open to you.