Adeline Schiralli, Consulting Principal at Keypoint Law and Accredited Specialist in Wills & Estates, begins her series on key tips for drafting wills by delving into what you should look for in the initial interview, verification of client information, taking instructions and advising on available options. Follow her series here.
The practice of Will drafting over the past few years has increasingly become a specialist practice due to the complexities that quite often unfold. This article is the first part in a series of articles that relate to Will drafting. This Legalwise Insights article will cover the initial interview, verification of information provided by the client, obtaining instructions from the client and advising on the options available.
Overview
A Will needs to be drafted with care to ensure that the client’s objectives are met. A Will needs to appoint an executor to administer the client’s estate when they pass. A Will can leave estate assets directly to a beneficiary (or a number of beneficiaries) or can direct estate assets into one or more testamentary trusts (which are either fixed, discretionary, protective or a combination of these structures). An important point to note is that a Will is only activated on the death of the Will making client and that a client can validly change their Will many times before their death (on the condition that they have the required capacity to do so). Because of this, the role of the appointed executor is only activated once the client has died and Probate has been granted. This is often not understood by clients.
It is an important step for any estate planning lawyer to check whether the client has a Will and an estate plan in place and to ensure that the clients Will and estate plan is up to date and will meet their objectives. An estate plan should be reviewed at least every 2-3 years but there are many occasions when an estate plan should be reviewed sooner. These include (but are not limited to):
- Where there has been a change in assets (i.e. the acquisition or sale of property)
- When a will-maker or beneficiary marries, divorces or enters a de-facto relationship
- When a child is born
- When a significant life event occurs (i.e. retirement)
- On the death or incapacity of a beneficiary or person appointed
In order to properly advise a client in relation to their estate planning needs, a multi-stage approach is required which can be summarised as follows:
- Stage 1 – Review the clients personal and financial circumstances. This will highlight any risks that need to be catered for (i.e. Family Law, Bankruptcy risks, likely challenges etc.)
- Stage 2 – Obtain the clients wishes/objectives
- Stage 3 – Work in consultation with the client’s financial advisors to ensure that both legal and financial aspects of the estate plan are in line.
- Stage 4 – Provide recommendations to the client regarding estate planning options and enter into retainer for work to be done.
- Stage 6 – Draft agreed estate plan
- Stage 7 – Meet to execute the documents.
- Stage 8 – Review regularly
The most effective way to transfer personal (estate) assets from one generation to the next is via a properly drafted Will that has been tailored to the client’s particular circumstances.
A properly drafted Will (that is updated and reviewed regularly during his or her lifetime) is the only way that a client can maintain some form of certainty as to how their estate will be distributed upon their death.
Assets that can be distributed via a person’s will (“Estate Assets”) include:
- Property in that person’s sole name or as tenants in common (as to their share)
- Bank accounts in that person’s sole name
- Share’s or managed funds in that person’s sole name
- Personal belongings and possessions
Assets that cannot or may not be distributed automatically under a person’s will (“Non-Estate Assets”) include:
- Property or assets held as joint tenants
- Superannuation
- Assets held in any company
- Assets held in any trust
- Assets subject to any contractual arrangement or pre-existing option.
There are various legislative instruments that you should be very familiar with if you practice or intend to practice in this area of law in NSW. These include (but are not limited to):
- Succession Act 2006 (NSW)
- Probate and Administration Act 1898 (NSW)
- Powers of Attorney Act 2003 (NSW)
- Trustee Act 1925 (NSW)
- Guardianship Act 1987 (NSW)
- Conveyancing Act 1919 (NSW) – particularly s 145
There are equivalents to the above instruments in the majority of States and Territories in Australia.
There are a multitude of cases in this area of law that are important for any solicitor practicing in this area to be aware of. A number of examples of landmark cases include:
- Banks v Goodfellow (1870) LR QB 549
- Hill v Van Erp [1997] HCA 9
- Howe v Fischer [2014] NSWCA 286
- Badenach v Calvert [2016] HCA 18
- Ryan v Dalton; Estate of Ryan [2017] NSWSC 1007
- Re Estates Brooker-Pain and Soulos [2019] NSWSC 671
The initial interview
You receive a call from a potential client. They wish to update their will. They have advised that their last will was executed some 10 years ago but they only wish to make a couple of changes. They advise that they can give you instructions over the phone and then you can send the will to them to sign. Should you do exactly what the client has asked?? The short and simple answer is NO!! One of the biggest mistakes that lawyers make in this area of practice is that they do not appreciate the complexity of a will and the problems that can occur if they have not assessed the client’s situation in great detail prior to drafting their will. What the lawyer should do in these circumstances is to advise the client that they will need to meet with them (preferably in person) to assess the client’s situation (both from a financial and personal perspective) prior to drafting their will. Without this assessment taking place, a whole host of issues may arise from the drafting of a “simple will”.
The initial interview with the client should be attended to in person by the solicitor and the client and sufficient time should be set aside to carry out the initial interview. Make sure that you properly identify the client and if you are acting for a couple, make sure you identify both of them and seek their consent to act for both parties. You will need to obtain both personal and financial details from the client. Most clients are happy to provide you with this information, but you will on occasion have some resistance on the part of the client – In this circumstance, you should not act if the client is unwilling to provide you with the details that you require.
It is important for any solicitor who takes instructions in relation to a Will to undertake a rigorous fact-finding exercise to ensure that they can provide holistic advice to a client in relation to their Will and estate plan. This fact-finding mission should include (but is not limited to) obtaining the following information from the client either prior to or during the initial interview:
- Their personal details (name, address, phone number, email address, marital status, date and place of birth, spouses’ details, children’s details, details of any possible eligible person, details of any other intended beneficiary etc.)
- Details of their other advisors (accountant and/or financial planner)
- Details of their assets including but not limited to their real estate, superannuation, life insurance policies, bank accounts, other investments (including shares), personal use assets (including any motor vehicles, furniture, jewellery, household contents, antiques, collectables and/or family heirlooms), assets held in other jurisdictions (interstate and overseas), digital assets, future possible inheritances etc.
- Details of their income and whether they (or a beneficiary) is receiving a Centrelink or DVA pension
- Details of their liabilities
- Details of any possible risk factors (including whether someone is likely to bring a claim against the estate, whether there are any beneficiaries that are at risk of becoming bankrupt or having a family relationship breakdown, whether a beneficiary is a vulnerable person and/or has a disability etc.)
Verification of information provided by the client
The next biggest mistake that some practitioners make is taking what the client says and not verifying that the facts are correct. Particularly when it comes to complex corporate, superannuation and trust structures, some (most) clients unintentionally get it wrong. It is crucial to liaise with the client’s accountant and/or financial planner regarding their structures and if possible obtain a “mud map” from the advisor – in most circumstances it is a good idea to meet with the client and their advisors so that issues can be discussed at multiple levels. You should obtain title searches regarding each property and company extracts regarding each company. It is important to review the profit/loss statement for any company and any company constitutions and/or trust deeds. If verification is not undertaken, you are treading on very dangerous waters as a practitioner.
Obtaining instructions for the Will and advising on the options available
Once you have identified the client, assessed their situation (both financial and otherwise), identified potential beneficiaries and claimants and verified the client’s assets, you are then able to obtain instructions from your client regarding their Will. It is important to ensure that the Will that you draft is consistent with the instructions provided, but at the same time, it is your duty as the legal advisor to identify any issues based on the previous fact-find and the clients Will instructions and inform the client of these issues. It is not the role of the solicitor to tell the client what they should do but rather to provide them with all the options, benefits and risks to allow the client to make an informed choice. Always make sure that the instructions you obtain are directly from the client (not another person whether related or not) and that the client is on their own with you when they are providing instructions.
You will need to be able to provide your client with advice in relation to multiple different areas based on their circumstances which may include but are by no means limited to:
- Joint tenancy v tenancy in common and the possible severance of a joint tenancy;
- CGT issues regarding shares in public companies, investment properties etc.;
- Pension issues for spouse and/or other beneficiaries;
- Aged Care (if required for a beneficiary in the future);
- Superannuation death benefits tax;
- How to pass effective control of private companies, trusts and SMSF’s;
- Testamentary trusts and their advantages/disadvantages;
- Conditions precedent v conditions subsequent;
- Trust law including class closing rules; and
- Potential claims on the estate
You need to be aware of the possible taxation implications but if you do not have expertise tax law, then the client will need to be advised to receive advice from a qualified tax practitioner. Your client retainer should also specifically exclude anything which you are not advising on (e.g. Tax). You should also always take the opportunity you have with the client to discuss other important estate planning documents including:
- Powers of Attorney
- Appointments of Enduring Guardian
- Advanced Care Directives
- Superannuation Death Benefit Nominations
You should also advise the client regarding the effect of marriage/divorce on their will. If the client has foreign assets, you need to advise them regarding the possible treatment of these assets – i.e. depending on jurisdiction, may not be valid in the jurisdiction where the assets are held.
Conclusion
To summarise, it is crucial for any lawyer that is involved in drafting Wills for a client to appreciate the complexity of this area of law and take extreme care when taking instructions from clients in relation to their Wills. A clear and methodical fact-finding exercise needs to be undertaken, coupled with verification of the information provided to the lawyer by the client. When obtaining instructions from the client, always remember that it is your role as the lawyer to provide advice to the client as to the options that are available to them in order to meet their objectives, whilst also highlighting the advantages and disadvantages of each option. It is then up to the client to make an informed decision in deciding which option to undertake.
Adeline Schiralli is an accomplished estate planning and elder law solicitor with extensive experience developing comprehensive and practical estate plans that suit the individual circumstances of her clients. Prior to joining Keypoint Law as a Consulting Principal, Adeline was a Senior Associate in the Wills and Estates team of a large prominent suburban firm. Adeline is adept at advising clients on matters including the implementation of wills (particularly sophisticated testamentary trust wills), powers of attorney and enduring guardianships, superannuation death benefit nominations and properly gifting the control of entities (including private companies and/or trusts) to the appropriate person(s) in the event of death and/or incapacity. Adeline can also assist clients in relation to the administration of a deceased persons’ estate and regularly advises clients in relation to retirement village contracts and aged care agreements. Adeline is passionate about obtaining peace of mind for her clients in relation to their estate planning and elder law needs, and regularly presents seminars to other solicitors, professionals and to members of the public in the area of wills, estates and elder law. Her approach is underpinned by her commitment to achieving peace of mind for her clients in relation to their wills, estate planning and elder law needs. She has a “no-nonsense” style to advising clients in all aspects of wills, estates and elder law and her attention to detail is exemplary. Adeline takes a holistic approach to estate planning and works closely with her client’s other advisors (accountants, financial planners etc.) to best achieve her client’s objectives. You may connect with Adeline by email adeline.schiralli@keypointlaw.com.au or via LinkedIn 
