SCOTT, battling cancer, has a prognosis of just 12 months to live.
Scott calls his sister, Mary, and asks her to come and live with him as his full-time carer. He tells her that if she does so, he will give her half of his estate when he passes-away.
Mary tells Scott that she will need time to consider his proposal.
Scott considers it unlikely that Mary will accept his offer and changes his will, gifting the whole of his estate to charity.
In the meantime, Mary makes plans to relocate to Scott’s home and ultimately accepts his proposal.
Mary resides with Scott and cares for him during the final stages of his life, before he passes-away one year later.
Mary withdraws $100,000 from Scott’s bank account just days before his death.
When Mary discovers that Scott never updated his will to reflect their agreement, she is understandably concerned.
Mary seeks legal advice and soon commences action against Scott’s executor, to enforce her agreement with Scott.
The executor says that the verbal arrangement, if any such agreement were reached, is not enforceable and seeks the return of the $100,000.
Mary files affidavits from her brother and her husband evidencing the alleged promise and states that the $100,000 was authorised by Scott.
On the balance of the evidence before the Court, it ultimately finds that the promise was made and that it constituted an agreement.
Despite the agreement being solely verbal and between family members, the Court rules that there was an “intention to create legal relations” and that the deceased was in breach of a valid “testamentary contract”.
The Court also rules that the $100,000 withdrawal was authorised in a conversation between Scott and Mary and accordingly, the executor’s claim against Mary for the return of “monies had and received” is dismissed.
This case demonstrates that verbal arrangements can override the provisions of a duly executed will and highlights the importance of disclosing any such arrangements to your solicitor when estate planning.
This fictional column is not legal advice.
By Manny WOOD, Solicitor
