Fairness and equality in your Will requires a lot of thought and a well crafted document

Written on the 21st of May 2010 by Warwick Gilbertson

Following is an example of how a commonly used term in a Will which on the face of it appears fair, can actually result in very unfair consequences.

Patrick and Jane are in their early fifties and have three children aged 26, 21 and 13. They have a Will which makes equal provision for the three children.

The eldest child Charles is a qualified accountant. He has just graduated from university. He is in full-time employment earning $50,000.00 per year.

The middle child Anne is a second year university student and has two years to complete her economics degree.

The youngest child Clare has just commenced high school. She has six years of high school to complete. It is then anticipated that she will go to university.

Patrick and Jane attend a solicitor to check their affairs are in order. The solicitor asks questions about their personal life and their children. “We have a Will. Everything is divided equally.” The solicitor looks at them and asks, “Is that fair?” . This was an unexpected question. Nobody had asked a question like that before. “Of course it’s fair… Isn’t it? ” The effect of the existing Wills was then carefully examined.

If Patrick and Jane were killed in a motor vehicle accident today, Charles and Anne have had the benefit of their parents’ full support during their high school education. Clare would not have the benefit of that support.

Anne currently works part time for a bank and her income is supplemented by her parents. (The parents pay for incidentals which she cannot afford such as car repairs, clothing, holidays, small luxuries and food from time to time). Anne is “semi dependent” on her parents. Charles has already received this support and benefit from his parents and is independent.

Clare, on the other hand, is still totally dependent on her parents. After their death she will not have the support of her parents during her high school years that Charles and Anne did.
Neither will Clare have the support of her parents when she is at university that Charles had and Anne has had to date. Clare will have to provide for herself. That provision will come from her share of her parents’ estate.

Working out the dollar value of the benefits received by Charles and Anne during the time they were fully dependent and semi dependent shocks Patrick and Jane.
“Shouldn’t Anne continue to receive supplementary support from the estate until she finishes her university degree? Shouldn’t Clare receive full support until she completes her high school and supplementary support during her years at university?”

The only available means to provide this support is from the estate. The current Wills of Patrick and Jane do not address this inequality although they appear to be “fair”. Charles has been treated in a financially superior fashion to Anne. Anne and Charles have received benefits far in excess of the benefits given to Clare. “In this example, "I give the whole of my estate to be divided equally…” is not equal at all.

If Patrick and Jane wish to achieve equality and fairness in their Wills, they need to spend more time properly considering what are fair gifts to their children having regard to all the prevailing circumstances, and then have Wills crafted in such a way that their wish will be achieved.

We hope this has been of interest and if you have any questions, please call on 02 4904 8000 or email Warwick Gilbertson (Specialising in Estate Planning).

If you have any further questions about this topic or you'd like to discuss a related matter, please do not hesitate to call us on 1800 994 279 or email us. A member of our Wills & Estates team will endeavour to respond to your enquiry within 24 hours. - Warwick Gilbertson Partner, Wills & Estates Lawyer