An informal will is a document that sets out the testator’s testamentary intentions however does not satisfy the formal requirements that are required under the legislation to create a formal will. In Queensland, the Succession Act 1981 (Qld) was amended in 2006 to recognise informal wills as being valid where the court is satisfied that the testator intended the document to form the person’s will. The case of Howe v Fischer [2014] NSWCA 286 considered when an informal will may be required in determining whether a solicitor had breached his duty of care owed to an intended beneficiary by failing to provide advice to the testatrix in relation to drafting an informal will.
When creating a will, or undertaking general estate planning, you should ensure you have appropriate legal advice. We can ensure our lawyers provide the right legal services to you to make a will that meets the requirements of the Succession Act and assist in avoiding costly civil litigation that could squander the funds in your estate that you intended to go to your beneficiaries.
When drafting wills, solicitors are obligated to carry out the terms of their retainer with reasonable care. The provisions of the legislation which provide for the use of an informal will, will only be applicable where the lawyer has knowledge that the testator may lose testamentary capacity or die prior to executing a formal will. In such cases, solicitors must provide advice to the testator in relation to the provision of an informal will, failure to do so may be in breach of their retainer and their duty to any intended beneficiaries under the new will. Alternatively, where there is no evidence to suggest that the execution of a formal will may be frustrated by death or incapacity, it is not necessary that a solicitor provide advice to the testator pertaining to drafting an informal will.
Mrs Fischer, aged 94, retained the appellant, Mr Howe a lawyer, to prepare her a new will. Mr Howe attended Mrs Fischer’s home on 25 March 2010 to take her instructions that would form the basis for her testamentary intentions. Mrs Fischer had previously executed a valid will in 2009, however her instructions under her new will were that she no longer wanted to include her daughter as a beneficiary and as such would increase her son’s share of her Estate from 25 per cent to 50 per cent. Upon taking instructions, both Mr Howe and Mrs Fischer agreed to meet again in two weeks, at which time, he would present Mrs Fischer with a draft will to reflect these instructions. Mrs Fischer also wanted her son, doctor and a barrister friend present at this time. During their initial meeting, Mr Howe did not observe Mrs Fischer to be unwell or suspect that she may lose testamentary capacity prior to their next meeting.
Unfortunately, Mrs Fischer passed away before she was able to meet with Mr Howe again and execute her new will. This meant that the terms of Mrs Fischer’s 2009 will were to be carried out and that Mrs Fischer’s son would only receive a 25 per cent share of the estate, as opposed to Mrs Fischer’s intention for him to receive a 50 per cent share under her new will.
Subsequently, Mrs Fischer’s son brought a claim for professional negligence against Mr Howe, seeking damages on the grounds that Mr Howe breached his duty of care to Mr Fischer as an intended beneficiary under the new will. Mr Fischer claimed that Mr Howe had breached this duty by failing to have Mrs Fischer sign an informal will.
At first instance in the New South Wales Supreme Court, Adamson J held that Mr Howe owed a duty to Mrs Fischer to draft an informal will. Additionally, Mr Howe also owed a duty of care to Mr Fischer as an intended beneficiary. The Court concluded that Mr Howe had been negligent in failing to have Mrs Fischer sign an informal Will at their first meeting upon taking her instructions and subsequently awarded damages to Mr Fischer.
On appeal to the New South Wales Court of Appeal however, the Court overturned this decision finding that although Mr Howe owed Mr Fischer a duty of care as an intended beneficiary, this duty had not been breached. The Court held that the scope of Mr Howe’s duty of care to Mr Fischer was to be determined by Mr Howe’s retainer, which was to take reasonable care to prepare and execute a formal will for Mrs Fischer. Therefore, any breach of this retainer by failing to take reasonable care would also constitute a breach of Mr Howe’s duty to Mr Fischer.
In determining whether Mr Howe had breached his duty owed under the retainer and whether an informal will was require, the Court considered there to be two reasonable steps that should be taken to achieve the duty under the retainer. Firstly, the solicitor must fulfil the obligation to make a formal will in the timeframe agreed upon between the parties. Secondly, the solicitor must take steps to avoid any reasonably foreseeable frustration that may arise in carrying out the making of a formal will.
In considering whether Mr Howe had fulfilled his obligation to prepare a formal will within the agreed timeframe, the court first considered the express terms of the agreement. The court heard evidence that between 1982 and 2009 Mrs Fischer had made at least nine formal wills. On each of these occasions, Mrs Fischer would provide the solicitor with her instructions and the solicitor would later draft the will and provide her with a draft and once finalised, would have the will signed and attested. The court concluded that Mrs Fischer was familiar with the process and that she had intended on following this same course in relation to will she had retained Mr Howe to draft. Additionally, as it was agreed upon by both parties, she understood that Mr Howe would return in two weeks with a draft will, this would enable the three other people Mrs Fischer wanted at the meeting, to be present. As there was a clear process and time frame agreed upon by both parties, the Court held that there was no express agreement requiring Mr Howe to give immediate effect to Mrs Fischer’s testamentary intentions by having her sign an informal will.
The court also held that solicitors drafting wills have implied obligations to take appropriate steps (ie. Providing advice in relation to drafting an informal will) where it is reasonably foreseeable that the execution of a formal will within the agreed timeframe may be frustrated by death or loss of testamentary capacity. In this case, Mr Howe had observed that although Mrs Fischer needed a full time carer and was elderly and frail, there was no evidence to suggest that she was suffering from ill health. Mr Howe formed the opinion that Mrs Fischer was of sound mind and that it was not reasonably foreseeable that she would lose testamentary capacity in the two week period prior to executing a formal will. At first instance, the court held that there was a ‘not insignificant risk’ that death or loss of testamentary capacity would occur prior to their next meeting in two weeks’ time, only taking into account Mrs Fischer’ age and her lack of mobility. The court of appeal however held that age and mobility limitations are not sufficient evidence to suggest that there is an imminent risk of death or loss of testamentary capacity. Ultimately, the court held that there was no evidence to suggest that Mr Howe ought to have been aware of the risk that Mrs Fischer may die or lose testamentary capacity in the following two week period. Mr Howe was therefore not under an implied obligation to take steps to have Mrs Fischer sign an informal will at their initial meeting.
As Mr Howe had neither express nor implied obligations in the circumstances to procure an informal will from Mrs Fischer, the Court concluded that Mr Howe had not breached the terms of his retainer and in turn he had not breached his duty of care owed to Mr Fischer as an intended beneficiary.
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