Disappointed Beneficiary Claims – Liability to Advise on Estate Protection
In July 2015, the Full Court of the Supreme Court of Tasmania decided Calvert v Badenach  TASFC 8 and expanded the liability of solicitors to disappointed beneficiaries (an application for leave to appeal to the High Court has now been filed). The impact of this decision emphasises that drafting a will is complex and that people need to see an expert solicitor to draft their will.
The solicitor drafted a will in 2009 for a terminally ill testator who wanted to leave his whole estate to the son of his de facto wife (his stepson). The testator and his stepson owned two properties together. The properties were held as tenants in common meaning that the testator was able to give them away in his will. The testator had been close to his stepson and he had entered into business ventures with him.
The firm of solicitors had acted for the testator for some time and had drafted previous wills for him. In the first will in 1984, the testator left his biological daughter $10,000.00. In the second will from 1984, the daughter received nothing; the same as in the 2009 will. The testator had been estranged from his daughter for a lengthy period.
The testator died about 6 months after writing his 2009 will. His daughter, who received nothing, brought a claim against the estate (see Doddridge v Badenach  TASSC 34). The Supreme Court awarded the daughter provision of $200,000.00 plus costs and interest of about $175,000.00. The estate was worth about $600,000.00.
The stepson then sued the solicitors who drafted the 2009 will in negligence for failing to advise the testator to take steps to protect his estate from claims.
The stepson claimed that the solicitor had a duty to ensure that the gifts to him in the will were protected from a family provision claim. It was alleged that the solicitor had a duty to advise the testator that he should take steps to change the title to his properties from tenancies in common to joint tenancies, removing them from his estate and taking them outside the scope of a family provision claim.
At first instance, the stepson was unsuccessful because the trial judge was not satisfied that, even if the solicitor had recommended that the title to the land should be changed, the testator and the stepson would have done so.
On appeal, however, the Full Court found the solicitor was liable to the stepson and remitted the matter to a single judge for assessment of damages. The Full Court held on appeal that the solicitor owed a duty of care to advise the testator on the potential for a family provision claim, the impact that could have on his wishes and of possible steps he could consider to avoid that impact.
What could have been done to protect the Estate against claims after death?
To avoid claims against his estate, the testator could have changed the title to his land from 'tenancies in common' to 'joint tenancies'. Property (generally land) held in a joint tenancy passes directly to the surviving joint tenant on death and does not form part of your estate. This means that property held under a joint tenancy is generally not available to a claimant who sues your estate.
Unlike NSW, there are no notional estate provisions in Tasmania. In NSW, jointly held land can be clawed back into the estate because it can be argued that the testator should have taken steps before death to sever the joint tenancy.
Alternatively, the testator and the stepson could have sold the properties before the testator's death and the testator could have dealt with the proceeds before he died. Again, in NSW, property sold by the testator before death can also, in certain circumstances, be clawed back into the estate if it is not sold for its true value.
It is not controversial that disappointed beneficiaries can sue a solicitor who drafts a will. A solicitor who drafts a will has a duty to intended beneficiaries to give proper effect to the testator's intentions. This includes advising the testator on steps they can take to protect gifts to beneficiaries if claims are made against their estate.
It is important, if you are considering a will or a change to your will, that you consult a solicitor who is experienced in wills and estates and who can advise on all the implications of the gifts you may wish to make in your will. Making someone a gift has implications because for each recipient there will often be someone who is excluded (and, therefore, disappointed).