When preparing a will, a lawyer owes a duty of care to the testator to advise them on the possibility of a family provision claim. However, as Badenach v Calvert demonstrates, this duty does not impose any obligation upon the lawyer to advise the testator of the steps they can take to mitigate the possibility of a family provision claim.
Badenach v Calvert was an appeal to the High Court from the decision of the Full Court of the Supreme Court of Tasmania.
The Facts
The appellant, Badenach, was the legal practitioner engaged by the deceased to prepare his will. Pursuant to the deceased's instructions, the will provided that the entirely of the estate would pass to the deceased's stepson, Roger Calvert. The will made no provision for the deceased's daughter from a previous marriage.
Following the deceased's death, his daughter brought a successful family provision claim against the estate. The effect of the family provision order and the subsequent costs order essentially depleted the entirety of the deceased's estate.
Consequently, Calvert brought proceedings against the deceased's lawyer, claiming that he had been negligent in failing to advise the deceased of the possibility that his daughter might claim family provision and of the options available to the deceased to mitigate or avoid the possibility of a claim. Specifically, Calvert claimed that Badenach should have advised the deceased that he could avoid a family provision claim by converting his and Calvert's interests in the properties, which formed the majority of the estate, to joint tenancies so that they would pass by right of survivorship, or by gifting his assets to Calvert prior to his death.
The Decision
The Court held that Badenach owed a duty of care to the deceased. However, the scope of that duty was dictated by the terms of the retainer agreement. Here, the deceased had engaged Badenach to prepare a will that benefited Calvert. Thus, Badenach had a duty to prepare a properly executed and legally effective will, under which Calvert would receive the entire estate.
In preparing this will, Badenach had breached his duty to the Deceased by failing to enquire into the Deceased's family and thus, failing to advise him of the possibility that his daughter would make a family provision claim. However, the Court found that Badenach was under no duty to advise the deceased on how to avoid a family provision claim. As while advice about the possibility of a family provision claim was relevant to a retainer requiring the preparation of a will, advice on avoiding a claim was outside the scope.
While the Court accepted that a lawyer's duty of care could extend to an intended beneficiary, like Calvert, that duty of care is limited. That is, it only extends to the proper execution of the will per the deceased's instructions, thus, ensuring that the intended beneficiary receives the interest willed to them by the deceased.
The Outcome
The High Court upheld the appeal and reinstated the orders of Chief Justice Blow in the Supreme Court of Tasmania, who had found in favour of Badenach.
The Takeaway
A lawyer owes a duty of care to a testator, and in certain circumstances, that duty of care can extend to the intended beneficiary. However, the duty of care owed by the lawyer only requires them to advise the will-maker of the possibility of a potential family provision claim. They are under no obligation to advise the testator on the steps which can or should be taken to mitigate or prevent a family provision claim unless the will-maker specifically seeks that advice.
What Does This Mean For a Testator?
A will-maker must ask the right questions. Family provision claims can and will be brought without regard to the testator's intentions. Therefore, it is incumbent on the testator to seek advice on how to avoid such claims and thus ensure that the estate is distributed in accordance with their intentions.
What Does This Mean for the Testator's Intended Beneficiary?
A lawyer owes an intended beneficiary a duty of care to properly execute the will. However, they cannot be sued simply because the intended beneficiary has been deprived of their inheritance by a family provision claim where the will is otherwise valid.
DISCLAIMER: The information provided above is published for general informational purposes only and is not intended to be nor should it be relied upon as a substitute for legal or other advice.