The deceased married Carol in 1988. They separated in 2008 and were divorced in 2011. On the day of their divorce, the deceased and Carol entered a Contract concerning their financial affairs. The Contract was expressed to be in consideration of each of the deceased and Carol settling disputes arising out of their matrimonial affairs. Under the Contract, the deceased agreed to provide that on his death one half of his interest in a hotel business (now valued at some $4.5 million) would be gifted to their 2 daughters, Diane and Suzanne.
In 2014, 11 days before he died, the deceased made a Will which provided in effect, that his interest in the hotel business would be divided equally between his four daughters, but only at the “Termination Date”. The “Termination Date” was defined as being only if and when the deceased’s de facto partner Amanda received $1 million from that business, or she dies. This was contrary to the Contract the deceased made with Carol whereby the deceased agreed to gift half of his interest in the hotel business to Diane and Suzanne on his death and not some later event.
Carol, Diane and Suzanne brought proceedings against the deceased’s estate claiming breach of Contract and other relief. The executors of the deceased’s Will, did admit the existence of the Contract between the deceased and Carol.
Diane and Suzanne were not parties to the Contract between the deceased and Carol, however the Contract was made for their benefit. The Court was satisfied that, “by making the Will, the deceased acted in breach of his promise” under the Contract to gift to each of Diane and Suzanne an interest in the hotel business, “effective immediately on his death, and not on the ‘Termination Date’, likely to be many years later”.
Under law, Equity will enforce a Contract to leave property by Will, “not by restraining or nullifying an inconsistent Will, but by fastening a trust on the deceased’s estate to give effect to the Contract”.
The Court found that the deceased, and the executors well knew that the provisions of the deceased’s Will would contradict and amount to a repudiation of the Contract. Accordingly the Court imposed a constructive trust on the deceased’s estate enabling Carol to enforce the deceased’s promise for the benefit of their 2 daughters and an order was made for an account to be taken of profits of the hotel business since the deceased’s death and one half of those profits paid to Diane and Suzanne.
A legally binding contract to make a Will containing particular provisions can be legally enforceable. If you are in any doubt regarding anything you have said about your Will or how you plan to leave your estate, you should seek professional legal advice. At Everingham Solomons we have the expertise and experience to assist you with all of your estate planning needs because Helping You is Our Business.
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