Kinloch v Manzione
Kinloch v Manzione [2022] ACTSC 76 was recently handed down by Kennett J in favour of the plaintiffs, represented by BAL Lawyers. The judgment established a new precedent in the ACT for the interpretation of Wills. Prior to this case, no authority existed in the ACT to assist lawyers and executors in interpreting the phrase ‘died before attaining a vested interest’ in a Will. This judgment now clarifies the meaning of the phrase and provides important information to executors about properly administering and distributing estates.
This case involved the estates of two parties: Lucy Kinloch, and her son Robert Kinloch. Following the death of Lucy, Robert was an equal beneficiary of the residue of the estate under her Will, along with his two sisters (the plaintiffs). Sadly, Robert passed away three months after Lucy, and before her estate had been administered and distributed. As Robert’s death occurred more than 30 days after Lucy’s, it appeared that he satisfied the survivorship clauses in Lucy’s Will so that his estate could then receive the inheritance. However, Lucy’s Will contained the additional phrase ‘died before attaining a vested interest’ – a standard clause frequently used by practitioners when drafting Wills. The main issue that the Judge was required to determine was: what does it mean to die ‘before attaining a vested interest’?
Why does this matter?
The definition of this phrase was important because it affected how the estate would be distributed.
The defendant submitted that Robert attained a vested interest, and so that share should be paid into his estate. His wife, the defendant, was the sole beneficiary of his estate so she would have ultimately received it. However, the plaintiffs submitted that Robert died before attaining a vested interest even though he died after the 30 day period, and so that share of the estate should be held on trust for his two minor children until they reached 18 years old.
In his judgment, Kennett J concluded that on the proper construction of the Will, the phrase ‘dies before attaining a vested interest’ means ‘dies before the estate is fully administered and available to be distributed’. The effect of this definition means that because the estate was not fully administered at the time of Robert’s death, the share that Robert would have otherwise been entitled to should be held on trust until his minor children reached 18 years old.
The phrase defined by His Honour is one that is commonly seen in Wills across the nation. As a result, Kennett J’s interpretation of this phrase will likely impact both future drafting and interpretation of Wills in the Territory, as well as in most other Australian jurisdictions.[1]
Kinloch v Manzione shows that disputes over estates can occur for many reasons and highlights the value of engaging a competent legal team to assist in identifying the correct beneficiaries and progressing the administration of the estate.
Watch out! Problems with poorly crafted Wills
In addition to defining the phrase ‘dies before attaining a vested interest’ in his judgment, His Honour also referred to a problematic practice that sometimes presents itself in poorly crafted Wills. Often, practitioners draft Wills by putting together standard clauses taken from precedents. When doing this, care must be taken to consider how these clauses interact and how they impact the overall meaning of the Will. His Honour noted that in cases where care and attention are not properly observed, this practice can produce a Will where the testator’s intention is completely obscured. Whilst this practice can cause issues in distributing an estate, it can be easily avoided if a practitioner carefully considers how standard clauses in a Will may affect a testator’s intentions.
At BAL Lawyers, the Estates team pride themselves on drafting well-crafted and clear Wills which ensure that your intentions are clearly communicated.
For more information and advice on estate planning and estate administration, please feel free to reach out to our Wills and Estate Planning Team.
[1] Including New South Wales, where the case of Serwin v Dolso [2020] NSWSC 370 has already provided guidance about this issue.