By Rebecca Tetlow
High Court decisions regarding wills and estates matters are relatively few and far between, so it is always of interest when a matter is considered by the High Court. The High Court recently handed down the decision of Badenach v Calvert which looked at the duty of care owed by a lawyer to a beneficiary of a will.
The case relates to the estate of Mr Doddridge who gave instructions to his lawyer to prepare a will. Mr Doddridge instructed that he wanted to leave the whole of his estate to his stepson Mr Calvert. Mr Doddridge’s main assets were two properties which he owned 50/50 as tenants in common with Mr Calvert. The lawyer prepared a will on the terms requested by Mr Doddridge and the will was properly signed and witnessed before Mr Doddridge died a few months later.
What the lawyer did not know – and did not ask about – was Mr Doddridge’s daughter from a previous relationship, who received no benefit under the will. After Mr Doddridge’s death, his daughter successfully made a family provision claim and the Court, in that case, ordered that the daughter receive a lump sum from Mr Doddridge’s estate. This substantially eroded the value of the inheritance that Mr Calvert would otherwise have received under Mr Doddridge’s will.
Mr Calvert then sued the lawyer who prepared the will, claiming that the lawyer was negligent in failing to advise Mr Doddridge of the possibility that his daughter might make a claim against his estate, and that there were options available to Mr Doddridge to reduce the risk of that claim. Some of the options that may have been open to Mr Doddridge, include reducing the value of his estate by transferring the properties to Mr Calvert during his lifetime or converting the ownership of the property to joint tenancy so that upon his death, Mr Doddridge’s interest in the property passed to Mr Calvert as surviving joint tenant, and did not form part of his estate.
The case followed a pathway through the Courts before the High Court ultimately decided that the lawyer was not negligent and dismissed Mr Calvert’s claim. The High Court confirmed, however, that in some circumstances, a lawyer can owe a duty of care to the intended beneficiaries under a will. The High Court also confirmed that a solicitor must do more than just make sure the will is properly signed and witnessed. A lawyer has a duty to their client to make enquiries about the facts and circumstances that may impact upon the effectiveness of the proposed will, such as the risk of a family provision claim if an eligible family member has been left out of a will. But in this case, the lawyer was not negligent because it was not established that Mr Doddridge would have taken a different course of action even if the advice was given.
So, what are the lessons from this case?
Although the High Court did not find that the lawyer was negligent, there were certainly a number of things that the lawyer could have done better. This case demonstrates that estate planning is complex and highlights the perils of “cheap and cheerful” Wills, even where the Will has been prepared by a lawyer.
There is wisdom in the old saying that “you get what you pay for”. In this case, Mr Doddridge ended up with a valid will which was drafted according to his instructions. However, what Mr Doddridge did not receive was an effective Will. Although the Will accurately reflected Mr Doddridge’s instructions, the failure to consider the family provision risks resulted in a very unhappy outcome for the intended beneficiary, Mr Calvert. The High Court’s decision may have brought some reassurance to those who view estate planning as a linear box ticking process. However for the team at DDCS Lawyers, it’s reaffirmed our already existing best practices.
A good estate planning lawyer should:
- Ask you about your family circumstances;
- Identify the risk of any potential family provision claims being made against your estate;
- Advise you on strategies to protect your estate or reduce the risk of a family provision claim;
- Identify all of your assets, including non-estate assets such as superannuation, business entities and jointly owned assets and take steps to ensure that all assets will pass where you intend; and
- Ensure that all documents, including a Will, are properly completed as part of a holistic estate plan.
DDCS Lawyers has a dedicated Wills & Estates Team that specialise in Wills and estate planning and can assist you with implementing an effective estate plan. Please contact us on (02) 6212 7600 or at firstname.lastname@example.org.