NSW Non-compliance to hand over statement details

[langley.p]

Currently have my deceased Aunty's Will "on hold" to contest. Several $M involved. She signed over everything to young couple she knew for 14 months. Death cert showed probable dementia for past decade.

Her solicitor (A), then became the young couple's solicitor (A) in the change of the POA, who in turn was found to be a good friend of the young couple's mother (A). I would have thought some sort of ethical/moral obligation would have been appropriate, considering he knew of my Aunty's estate value and signed over POA to a young couple he met that day and she had known for only 14 months from a "knock on the door" ?

Our fam has requested her "prior to death" bank statements to show any possible inappropriate use of her funds (we suspect) whilst she was alive. This request has been through the court (?). Twice, the young couple have allowed the timeline to lapse. Is this permissible (I would assume 'yes') and how many times can they delay the request ?

We probably become a bit cynical/paranoid of how all this operates, as this in a northern NSW regional town where everyone would probably know everyone, and the young couple involved are known semi-celebrities in the town.

Thanking you for any advice.

Phil

 

[Perp]

The solicitor doesn't 'sign over' POA to the couple; your aunt did. Their relationship with him is not particularly relevant. The solicitor's duty - to his client, your aunt, not to you, relevantly - was to ensure that she had capacity to grant an enduring POA. The solicitor should have made extensive notes about their assessment of your aunt's capacity, at the time that she made the POA. A diagnosis of dementia is not determinative of capacity; people without dementia may lack capacity, and those with dementia may have it. It's a very specific test.

Should you wish to challenge the validity of the POA on capacity grounds, the question is whether you have standing to obtain the information that you'd need to substantiate such a claim, such as bank accounts or the solicitor's notes. If you can convince the Public Guardian that an investigation is warranted, they may have power to obtain such information.

With regards to challenging the will, are you legally represented? (If you are, I'm wondering why are you asking here rather than asking your solicitor?)

If you're challenging the validity of the will on capacity grounds, firstly, the capacity test for a will is less stringent than for an EPA, so if she had capacity to grant an EPA she certainly had capacity to make a will. Secondly, you face the same obstacles in challenging capacity that I've already outlined. If you had regular contact with her and at the time she made the will / granted EPA it was evident that she had no idea who her relatives were or what things she owned, etc., then that may be compelling. (I'm assuming you weren't intricately involved in her life due to the circumstances, but if I'm mistaken, this may help you.)

With regards to a family provision claim - which agrees that the will is valid but you think that you should have been provided for - unless you were financially dependant on your aunt, I'm not sure on what basis you're suggesting that a nephew would be an 'eligible person' to make such a claim. It's generally limited to spouses (and ex-spouses), children, and people who were cohabiting with the deceased and financially dependent on them.

 

[langley.p]

The solicitor doesn't 'sign over' POA to the couple; your aunt did. Their relationship with him is not particularly relevant. The solicitor's duty - to his client, your aunt, not to you, relevantly - was to ensure that she had capacity to grant an enduring POA. The solicitor should have made extensive notes about their assessment of your aunt's capacity, at the time that she made the POA. A diagnosis of dementia is not determinative of capacity; people without dementia may lack capacity, and those with dementia may have it. It's a very specific test.

Should you wish to challenge the validity of the POA on capacity grounds, the question is whether you have standing to obtain the information that you'd need to substantiate such a claim, such as bank accounts or the solicitor's notes. If you can convince the Public Guardian that an investigation is warranted, they may have power to obtain such information.

With regards to challenging the will, are you legally represented? (If you are, I'm wondering why are you asking here rather than asking your solicitor?)

If you're challenging the validity of the will on capacity grounds, firstly, the capacity test for a will is less stringent than for an EPA, so if she had capacity to grant an EPA she certainly had capacity to make a will. Secondly, you face the same obstacles in challenging capacity that I've already outlined. If you had regular contact with her and at the time she made the will / granted EPA it was evident that she had no idea who her relatives were or what things she owned, etc., then that may be compelling. (I'm assuming you weren't intricately involved in her life due to the circumstances, but if I'm mistaken, this may help you.)

With regards to a family provision claim - which agrees that the will is valid but you think that you should have been provided for - unless you were financially dependant on your aunt, I'm not sure on what basis you're suggesting that a nephew would be an 'eligible person' to make such a claim. It's generally limited to spouses (and ex-spouses), children, and people who were cohabiting with the deceased and financially dependent on them.

Thanks Perp.

I should have mentioned my query is on behalf of my father (her brother and other siblings). That's good to know regarding "dementia", as I would have thought her death certificate showing "signs of dementia for past ten years" may have been relevant.

As for "representative" status, yes the families are represented by a solicitor (NSW), and they are all based in Qld some distance away. They were encouraged to employ a NSW solicitor as they were led to believe a Qld solicitor may not have the same "handle" on NSW law. So when some of the info is passed on from the solicitor, they find the written information/communication can be "lost" in the jargon, and I must admit so do I. I was "here" in the hope of clarity on a couple of aspects. Ideally, a local Qld solicitor would have been more favourable in being able to drop in and clarify verbally.

Thanks again.

Phil

 

[Perp]

You're welcome, and I'm a Queensland succession solicitor.

 

[langley.p]

As a general question to the "readers" - is there validity in that we have been recommended to go with a NSW solicitor ? Bit late now, but just to satisfy my own and the family curiosity. Being our first "law thing", we're "flying blind", especially when some of us have had to fly down south for a meeting with a Barrister who has flown up from Sydney. All very time consuming.

 

[Arche]

Each state has their own laws about POA so it is a sensible enough suggestion to have NSW lawyer involved.
Who is the executor and why haven't they gone to the bank to get bank records? If there are court proceedings pending, have they been subpoenaed from the bank?

 

[langley.p]

Thanks Arche. Makes sense then to engage a NSW rep. Briefly, to avoid taking up your time:-
The executors are the couple who only met my aunt some 14 months previously. They were "down on their luck" and needed somewhere to live. She changed her Will completely in their favour, which is her prerogative. But she had shown signs of dementia to family members previously and this is confirmed in her death.certificate.
The family are contesting the Will and would be interested in seeing bank statements prior to her passing that may indicate inappropriate use, as we are aware an overseas trip,new car, new house etc etc were made by the couple. But from what I can comprehend in a letter from our solicitor, they do not have to hand over such statements. Such a statement, if it showed inappropriate use of funds, I would have thought strengthened our case ???? But may this is not the case.
Once again, thank you.
Phil

 

[Perp]

Such a statement, if it showed inappropriate use of funds, I would have thought strengthened our case ????

It would, but on what basis are you requesting it? Have you filed a case alleging breach of fiduciary duty against the POAs? If so, on what basis? Such a case would need to be mounted by somebody who was 'harmed' by the breach, and if none of you are beneficiaries under the will, then you wouldn't have been harmed by their breach.

If you succeed in challenging the will on capacity grounds, and one or more of the remaining family become beneficiaries, then you may have standing to pursue breach of the fiduciary duty.

 

[langley.p]

Thanks Perp. We simply wanted to have access to her statements to ascertain that the "couple" weren't accessing her funds for their own means. We THINK this may be the case.

The "harmed" are the aunt's brothers and sisters who were all removed from the Will in favour of the "couple". Hence, the dementia query from the aunt's siblings as part of a defence.

Fiduciary ? Not sure, I would hope so. I'll check. Thanking you for your simple terminology and it's not costing us $250 per minute from the Barrister ????

Phil

 

[Perp]

Thanks Perp. We simply wanted to have access to her statements to ascertain that the "couple" weren't accessing her funds for their own means. We THINK this may be the case.

The "harmed" are the aunt's brothers and sisters who were all removed from the Will in favour of the "couple". Hence, the dementia query from the aunt's siblings as part of a defence.

Yes, a power of attorney owes a fiduciary duty to the principal (as does an executor to the testator). This is the highest level of duty that can be owed, and requires those owing such a duty to put the interests of the person to who the duty is owed above their own interests. There are strict issues regarding conflict transactions, and so on.

The issue I see is that under the existing will, the people who inherited the estate were also the POA, so they'd only have been 'ripping off themselves', if that makes sense - they took money early that would have been coming to them anyway. If your aunt were still alive, you could possibly intervene on behalf of your aunt, because there'd be an argument that they may use up all your aunt's funds before she's deceased. But as she's passed, the party injured by the breach (those who inherit under the will), and the party who breached, are the same party, so there's nobody with standing to bring an action.

My understanding is that you'd first have to challenge the validity of the will, and if that succeeded, then you'd have standing to argue that there was a breach of fiduciary duty that harmed the new beneficiaries - because they inherited less than they otherwise would have (if the breach hadn't occurred).

So you're jumping the gun requesting that info now; you don't presently have standing.

First challenge the will on capacity grounds. If that doesn't succeed, there's likely little that you can do.

The test for testamentary capacity (ie legal capacity to make a will) is from a key case called Banks v Goodfellow. It states that in order for a testator (your aunt) to have capacity, they must, at the time they instructed their solicitor, have:

1) understood what a will is and what it means to make one (ie that it lays out who will get what after they pass);

2) a broad understanding of what assets she had (as an example, if she knew that she had property, cash, and shares worth around $2M in total, that would meet the test - she wouldn't have had to know specifically which shares she had or the address of the property or the amount in accounts etc); and

3) known who are the people to whom she owed a 'moral duty', ie who her relatives were, and if she excluded them, that she had reasons for doing so.

A fourth test, which is a negative requirement, is that she must not have been suffering from any mental disorder that would 'poison the mind'. That doesn't just mean dementia, the cases where this has been proved are generally about a testator who is suffering from delusions, eg rewrites their will to exclude their daughter because they believe their daughter is stealing their money, when it's patently obvious no such thing was happening and it was just a delusion.

So to have the will set aside on capacity grounds, you'd have to prove one (or more) of the above four - that she didn't understand what it meant to make a will, that she had no idea what her assets were, that she didn't know who her relatives were, or that she was suffering from delusions (or similar) that influenced her to remove people from her will.