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Risky Business |
Care to be taken when drafting wills.
There are many practitioners who charge only about $150 for drafting wills. I do hope they realise that the potential damage that can result from incorrect drafting can easily amount to hundreds of thousands of dollars even for
individuals who may not appear to have substantial assets.
Liability arising from the drafting of wills can come about in many ways. One common occurrence is delay. It is common for someone in the last days of his life to want to make a will or make alterations to a will. It is
necessary for a practitioner to ascertain the state of the client’s health and act accordingly. Failure to act quickly enough may be a ground for liability. There have been several cases decided in the English courts where
solicitors have been found liable in negligence for failing to act with reasonable speed and diligence in preparing a will.
When dealing with a person in his last days, one must also be careful to ascertain that he is of sound mind and not subject to undue influence.
A practitioner should generally see any client wishing to make a will privately but this may be more crucial when there may be concerns about whether the person may be subject to undue influence. The will should ideally be
signed and witnessed in the lawyer’s office and the witnesses should not be beneficiaries of any kind. Lawyers should also be extra careful with instructions coming via a potential beneficiary. If a lawyer has to go to the
client’s home or even a hospital to take instructions, he should try and ensure that none of the beneficiaries is present at the time of taking instructions. It may be helpful to have an independent third party like a doctor
present to confirm that the client was lucid and was not under any pressure from the potential beneficiaries.
Another instance where liability may arise is on account of tax. When a client instructs a lawyer to prepare a will there may be an assumption that the lawyer will ensure that the beneficiaries will pay the minimum amount of
tax, whether estate duty or income tax, and that the lawyer would advise on simple steps or changes that may be made to the will that will minimise the estate’s liability to tax. It is important that the lawyer ensures that he
does not disregard the tax implications of the will. The lawyer has to ensure that his advice is comprehensive.
This may sound obvious but it is also important to ensure that the instructions for the will are completely clear. Even if the lawyer believes he understands the client’s wishes, and both the lawyer and the client believe that
the will has been drafted to convey the client’s wishes completely, there could in fact be some areas that are ambiguous and therefore these gifts will fail. For an illuminating real life example see the case of Re Emily Samuel
[2001] 4 SLR 379. This case warrants a good read by any lawyer engaged in the writing of wills. The court interestingly observed, ‘… that the will was prepared in a rather casual fashion’ (at p 389 para 31). Among the several
gifts that vexed the court was a bequest to ‘the Lam family’.
It is important to understand the relationships between the testator and the beneficiaries and to ensure that the beneficiary can be clearly and easily identified, whether they are individuals or organisations such as
charities.
It is always good practice to get another lawyer who has not been at the meeting with the client to read the will to ensure that it is clear before it is executed.
Even for something as seemingly simple as drafting a will it is necessary to ensure that certain risk management tools are in place. For example, set proper diary dates and stick to them; do not let things slip. That alone may
result in liability.
Ensure that all the client’s wishes have been clearly and properly conveyed in the will. Make sure that clear advice has been given, especially where tax may be an issue. And most important of all, be sure to keep proper
attendance notes on file of all discussions that have taken place. You never know when you may need to rely on them.
Stanley Jeremiah
Goodwins Law Corporation
E-mail: stanley_jeremiah@goodwinslaw.com