Wills

In a nutshell: Will making - where loss of testamentary capacity is a precursor to a statutory Will.

This is the story of Mr Lagozino’s testamentary wishes and his battle with Alzheimer’s dementia.

Mr Lagozino did not marry or have any children. His only surviving sibling was his sister who lived in Italy with her children. Mr Lagozino and his sister had a cordial relationship growing up and she was originally the sole beneficiary under a Will he made in 1980.

In 2009 Mr Lagozino was diagnosed with Alzheimer’s dementia. Around the same time, he fell out with his sister. However the evidence in the trial highlighted that the views Mr Lagozino held about his sister were delusional, misinformed and coincided with his declining health.

The applicant in this case was the guardian of Mr Lagozino at the time and they joined Mr Lagozino’s sister as an interested party in the proceedings.

The storm began in 2014 when Mr Lagozino created a new Will. This was controversial because he firstly made specific lump sum bequests of $50,000, $35,000 and $50,000 to three friends who were dear to him, and only made provision for his sister to receive 30% of the residue of his estate with the other residual 70% to be distributed between her children. If he had not been advised by his solicitor at the time that his sister may otherwise make a claim on his estate subject to the Inheritance (Family Provision) Act 1982 (SA), he may not have included her at all.

Alas, the Court was required to decide whether the 2014 Will accurately reflected the intentions of Mr Lagozino and if he now had testamentary capacity, or whether or not his diagnosis in 2009 had affected these views insofar that a statutory Will reflecting his true intentions should be granted, pursuant to Section 7 of the Wills Act 1936 (SA).

The provision granting a statutory Will is a remedial and protective measure and the wide discretion of the Court to order one is not given readily. Rather the Court must initially be satisfied that:

1. the testator lacks testamentary capacity;
2. the proposed Will would accurately reflect the likely intention of the person if they still had testamentary capacity; and
3. it is reasonable in all circumstances that the order be made.

The circumstances of what is reasonable is an important discretional finding that should be based upon the satisfaction of further criteria, namely:

1. any evidence relating to the wishes of the person (which was widened by the 2016 South Australian Supreme Court case In the Matter of K, JL [2016] SASC 53 in order to be flexible in matters of detail when deciphering what the likely version of the testator’s testamentary intentions would have been on the facts);
2. the likelihood of the person acquiring or regaining testamentary capacity (unfortunately Alzheimers is not as forgiving as other ailments to which this consideration may apply);
3. the terms of any previous Will made by the person (noting the 1980 Will);
4. the interests of:
   1. beneficiaries under any Will (which in this case, was the sister as sole beneficiary);
   2. any person who would be entitled to receive any part of the estate of the person if the person were to die intestate (which again would be in favour of the sister in this case);
   3. any person who would be entitled to claim in the benefit of the Inheritance (Family Provision) Act as cited above;
   4. any person who has cared for or provided emotional support (which allowed for the proper consideration of the three friends who were now to benefit);
   5. any gift for a charitable or other purpose the person might reasonably be expected to give by Will;
   6. the size of the estate (which ended up being a focal point in the judgment); and
   7. any other matter that the Court considers relevant (for instance, Mr Lagozino’s appearance swayed the judges view when considering his current testamentary capacity (if any) because he presented as dishevelled and unshaven in Court which was considered to be out of his normal character)

Reasons

As aforementioned, it was held that the testator’s instructions were influenced by the hostility that he felt towards his sister, which was ill informed by a view that he formed around the same time he was diagnosed with dementia. He was under the belief that his sister had acted to prejudice his interests in property and assets held for him in Italy. It was proven that these views were misinformed and therefore founded on delusional belief.

The cornerstone case of Banks v Goodfellow (1870) LR 5 QB 459 outlining the test for testamentary capacity for the past 121 years was cited and reinforced that testamentary capacity requires the testator to have the ability:

1. to understand the nature and effect of a Will;
2. understand the extent of property being disposed of; and
3. appreciate claims to which he should give effect to.

As the Judge’s remedial decision is based on a hypothetical scenario, the subjective views which informed Mr Lagozino’s objective mindset when testamentary instructions were given in 2014 were weighed up by the Court along with the witness evidence from his GP and lawyer.

Lastly, the size of the estate at the time of trial had significantly diminished since 2014. The judge queried whether by taking into consideration the total amount of the estate today, Mr Lagozino would still have made such generous and specific bequests to his three friends. He further noted that the making of a statutory Will now would save the estate the added expense of future litigation.

Take Away Message

It’s never too early to take precautions and to make your Will well before a condition, which may be out of your control, really does take everything out of your control. Furthermore, lump sum bequests can be tricky, as the set amount can end up either lesser or greater than the appropriate proportion you may have considered at the time of giving your Will instructions.

Proving the above issues can be tough as the Court takes one’s testamentary wishes and capacity very seriously, so if you have an issue similar to Mr Lagozino’s matter then come and see us to start gathering and presenting the evidence which may be required for either:

1. proving testamentary capacity; or
2. for the remedial purpose of creating a statutory Will.