Succession Bill

Second Reading

Adjourned debate on second reading.

(Continued from 15 June 2023.)

Mr BROWN (Florey) (16:49): I am pleased to continue speaking in support of this bill, which brings comprehensive and long anticipated reform to a fundamentally important area of South Australian law.

It is a socially and emotionally complex area of human life and experience. This government's attempt to improve, modernise and simplify South Australia's laws in this area, through the various provisions of the Succession Act 2022, is made with the intention of serving and advancing the interests of the South Australian community.

These reforms offer potential in terms of improving individual experiences and interfacing with this area of law, as well as in terms of the avoidance of lengthy and substantial litigation, which we know does occur in this area. The intention is to reduce the frequency of such occurrences through the enactment of certain provisions of this bill.

The comprehensive suite of recommendations in the reports of the South Australian Law Reform Institute gave structure and substance to the thinking that has led to the wideranging reforms represented in this bill. As other speakers have done, I commend and thank SALRI for their years of work, that have helped to inform the development of this bill.

As we have also covered in previous debate, this iteration of the bill is itself a culmination of many years of work by successive South Australian governments and several attorneys-general of South Australia, all of whom have put considerable effort into making sure its provisions are thorough and well considered.

It is in no small part owing to the length of time that governments and attorneys-general from both sides have worked on getting these provisions right that the bill enjoys the robust bipartisan support that we see and the strong appetite for its passage into law. A significant part of the effort in developing these reforms focused on ensuring that they meet the needs of the contemporary South Australian community. As most speakers in this place and the other have noted, this legislation represents the most significant reform to this area of law in half a century.

This bill repeals the Administration and Probate Act, the Wills Act and the Inheritance (Family Provision) Act 1972 and consolidates their provisions into a single act that is modern and fit for purpose. The benefit of having one piece of legislation that covers all aspects of succession law will be that our laws are easier to understand, easier to comply with and easier to enforce—all of which represents significant benefit to our community. In the definition section of the bill, some of the definitions have been modernised or simplified. For example, the definition of 'will' has been modernised in line with definitions used in interstate jurisdictions.

One of the SALRI recommendations that was accepted by the government is a new provision that confers to certain classes of person the right to inspect the deceased testator's will. This includes persons who are named in the will, persons who benefit from the will, surviving spouses and domestic partners, former spouses and domestic partners, parents or guardians of the deceased, and persons who would be eligible to a share of the estate under the rules of intestacy in the event that the decedent had died intestate.

We know that in this area of law it is not unusual for persons who believe they have a legitimate claim against an estate to wish to inspect a will, and it is considered a sensible reform to enable that to occur. The bill, therefore, provides that persons with claims against an estate in law or equity can inspect a will, but only with the permission of the Supreme Court, provided the court determines they have a proper interest in the matter and it is appropriate for them to do so.

Part 3 of the bill, which deals with probate and administration, incorporates a few recommendations from the SALRI reports, such as the clarification that only persons aged 18 and over may be given a grant of probate or administration, as well as that such a grant may be made to more than one person. The Supreme Court has also been given the power to pass over applicants for a grant of probate or administration, to appoint another person who they consider to be appropriate, and to vary or revoke a grant.

The other significant inclusion in part 3 of the bill is the provisions introducing the deemed grant model for the administration of small estates, which was adopted as a recommendation of SALRI, although following consultation the grant model does differ somewhat from that which SALRI proposed.

These provisions of the bill will enable the Public Trustee to avoid applying for formal grant letters of administration. Instead, the Public Trustee will give notice to the Registrar of Probates by way of publishing a notice in the GovernmentGazette, as well as on the Public Trustee's website, of their intention to administer a small estate of a value up to $100,000. The minister can vary that threshold amount upwards by notice in the Gazette, which will allow the value to keep pace with inflation over the long term.

The Public Trustee will be taken in this circumstance to have a deemed grant of administration 14 days after the notice is gazetted. The provisions also give the court the power to revoke a deemed grant on application by the Public Trustee or by a person interested in the estate. The intention of these provisions is to reduce cost and to simplify the process for administration of small estates by the Public Trustee which will offer benefit both to that institution and to the wider community.

Part 4 of this bill deals with the administration of deceased estates. Many of SALRI's recommendations have been incorporated. The provisions allow for the court to require an executor or administrator to give an undertaking to the court in relation to how administration of the estate will be carried out. This provision is intended to offer important protections to beneficiaries of an estate from losses that may result from deliberate misconduct or incompetence by an executor or administrator.

The court has been given a range of powers to remedy loss in the event of an executor or an administrator failing to carry out their duties, including allowing the court to order the executor or administrator to compensate persons who have suffered loss or to order the executor or administrator to pay into the estate an amount that remedies the loss. This provision has been included in particular because criminal offences related to the duties of executors and administrators have been removed from the legislation, which was another of SALRI's report's recommendations.

Following a recommendation by the South Australian Bar Association, a limitation period of three years from when the aggrieved person became aware of the failure has been set to make an application for a remedy under these provisions.

Another of the South Australian Law Reform Institute's recommendations has been adopted in relation to provisions to allow persons or entities who hold the money or the property of a deceased person, up to a value of $15,000, to pay that money or to transfer that property directly to a surviving spouse of the decedent, a domestic partner of the decedent or a child of the decedent without the requirement to obtain a grant of probate or letters of administration.

This provision is intended to facilitate an expeditious transfer of funds or property to surviving family members who will realise a more immediate and perhaps quite an important benefit from access to those funds or to that property. One imagines that this will be especially helpful in instances wherein the surviving persons may need the money in order to cover immediate expenses.

Another provision of the bill that did not arise from one of SALRI's recommendations codifies the application of assets in the payment of debts and liabilities for solvent estates. Provisions for dealing with insolvent estates were already in place previously, but we relied on the common law in dealing with solvent estates which meant the rules are more complex to apply in South Australia. A clear formula for dealing with solvent estates will make processes easier to follow for executors and administrators.

Part 5 of this bill deals with intestacy. Change in this area has been modest in line with SALRI's recommendations. For example, the amount of a preferential legacy a decedent's surviving spouse is entitled to under the rules of intestacy has been increased by $20,000 to $120,000. Additionally, the distribution on intestacy has had one additional degree of relative, namely the children of the first cousins of the decedent, included in the distribution order before the estate passes to the Crown.

This is a reflection of public views expressed that generally South Australians would prefer their estate pass to relatives than go to the Crown and, where surviving relatives only exist at a distant remove, provisions should be made to facilitate their inclusion in the distribution order. It has also been clarified that the spouse or domestic partner of a person dying intestate has no entitlement to any part of their estate if that spouse or partner is party to a prescribed agreement or order. The intention is to provide that spouses or domestic partners who were separated from an intestate decedent are removed from the order of inheritance. The specific types of agreements in question will be prescribed by regulation.

Part 6 of the bill deals with family provision. SALRI's reviews of previous legislation concluded that claims under the Inheritance (Family Provision) Act 1972 have been too easy to make and not enough weight is placed on the wishes of the testator. As a result, the categories of claimant who are automatically entitled to bring a claim under the Inheritance (Family Provision) Act have been adjusted in this bill.

Former spouses and domestic partners are excluded from making a claim for family provision if they had been a party to a prescribed agreement or order, as in part 5 of the bill. The specific agreements and orders will again be prescribed in regulation. This provision is intended to prevent a former spouse or domestic partner, who has effectively ended their relationship and settled financial matters between themselves and the decedent, to come back and make a family provision claim after the testator is deceased, perhaps a number of years after the end of the relationship. Adult stepchildren, in order to bring a claim, have to demonstrate that they meet certain criteria to establish legitimacy, which is appropriate.

Stepchildren who are minors are entitled to make a claim if they can establish to the court that they were wholly or partly, or were legally entitled to be wholly or partly, maintained by the decedent immediately prior to the decedent's death. Grandchildren of the decedent in order to make a claim will now need to satisfy the court that either their parents died before the deceased person or that they were wholly or partly, or were legally entitled to be wholly or partly, maintained by the deceased.

This bill also provides that, when determining whether to make a family provision order, the court's primary consideration shall be the wishes of the testator. To discourage unmeritorious claims, the court may order a party to proceedings to give security for costs that may be awarded against the party if it appears to the court that the party's claim for family provision may be without merit.

Part 7 of the bill lays out the miscellaneous provisions. A noteworthy inclusion in this part is a provision that will codify the rules to deal with situations where simultaneous deaths of spouses or domestic partners occur. Currently, we rely on common law rules, which puts us out of step with other Australian jurisdictions. This bill's provisions state that, where simultaneous deaths occur, jointly owned property will devolve in equal share to each person's estate as if they were tenants in common.

An additional provision in part 7 has been included to codify the presumption of survivorship. This provision sets out that, where two or more persons have died in circumstances where the order of death cannot be determined, for all purposes affecting title to property the debts will be taken to have occurred in descending order of age from eldest to youngest. Other elements of part 7 include provisions dealing with how copies of wills are to be obtained, provisions dealing with admitting wills into evidence, provisions dealing with the exercise of rights of retainer and provisions allowing for court rules and regulations to be made.

Finally, schedule 2 of the bill contains amendments to other acts. Significant inclusions in the schedule are amendments to the Guardianship and Administration Act which allow for the limited administration of the estate of a missing person in line with a recommendation of SALRI. The provisions are located in the Guardianship and Administration Act, as they do not deal with the state of a deceased person but a person who is missing.

The administrator may apply to the court for an administration order, which allows the estate to pay the missing person's debts, to assist in the maintenance of dependants of the missing person, and to assist in the care and maintenance of the property of the person. If the administrator becomes aware that the missing person is alive or is deceased, they must advise the court as soon as practicable.

All the provisions of this bill which represent new elements or changes to existing legislation have been the subject of extensive consultation and discussion, and that is entirely appropriate in the development of legislation for this area of law. It is an area which can be difficult for those who interface with it, either professionally or personally. Anything that the state government can do to improve the experience of South Australians in dealing with matters of succession is worthwhile and worth taking the time to get right, as we believe we have done.

I acknowledge the meaningful and influential contributions of SALRI, the South Australian Bar Association, the Law Society and all other parties to the consultation on and the development of this bill. I commend the bill to the house.

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (17:03): I also rise today to support the Succession Bill 2022. This bill represents an extensive modernisation of the succession laws here in South Australia, seeking to consolidate South Australia's succession legislation into a single standalone act.

The Succession Bill considers wills, estates, probate, administration of deceased estates, and intestacy and was the result of the review by the South Australian Law Reform Institute (SALRI). As the house would know, this review began under the previous Attorney-General, John Rau, in 2011, and it is good to see that recommendations from those seven reports are included in this bill today.

The Succession Bill proposes amendments to the existing succession laws which bring them up to date with progressive principles and values. These provisions target the plight of people in non-traditional and complex family structures while eliminating the legal complexities and difficulties that arise during an estate's administration.

While these amendments are legislative and technical in nature, the bill focuses on modernising and simplifying the language where possible. Recommendations provided in the review, and included in this bill, include a new provision that allows for a certain class of persons to have the right to inspect a deceased's will. This includes persons named in the will, beneficiaries, surviving or former spouses and domestic partners, parents or guardians of the deceased and persons eligible to a share of the estate under intestacy laws.

I used to actually practise in succession law for quite some time and often would get calls from various family members asking to see a copy of a deceased's will, where we were acting for the deceased. Those provisions will be very handy to clarify when and how and who can access a copy of the deceased's will. Further, the Supreme Court may grant permission for persons with claims against the estate in law or in equity to inspect the will if they have a proper interest.

As recommended by the review, the court has also been given a wide range of powers to remedy loss if an executor or administrator fails to perform their duties. This could include monetary compensation to the estate for any financial benefit obtained by that executor or administrator and any other order that the court deems appropriate.

Regarding a grant of probate, the Supreme Court will be given the power to appoint another person who they consider appropriate and to vary or revoke a grant. The current administration process for probate has been described as, and in my experience has been, costly, cumbersome and slow. Grants of probate can often take several months, only adding to the distress for the deceased's loved ones. The online portal that has been created by the Courts Administration Authority in relation to receiving probate has helped in some ways, but these changes will certainly go a lot further.

These amendments aim to simplify the process, making it more affordable and accessible for all, but most importantly it is hoped that these changes will accelerate the process and reduce the overall time it takes to finalise a grant of probate. As recommended by the review, another key amendment includes provisions to allow persons who hold money or property for the deceased up to the value of $15,000 to pay or transfer this directly to a surviving spouse or domestic partner of the deceased, or a child of the deceased, without a grant of probate or letters of administration.

The first bill that comes up once someone has passed is their funeral expenses, and simply paying for that expense will go a long way to reducing the stress, where all the money is locked up in the deceased's own bank account that cannot be accessed by any of those people.

Whilst the current succession laws have served South Australia reasonably well they do require reform to bring them in line with community expectations and certainly to modernise them. The current law fails to consider evolving familial and social structures and has caused some significant issues, particularly in intestacy situations, where the unfortunate death of a family member occurs without a will.

The existing laws fail to minimise disputes and conflict among family members, leaving the death of a loved one even more challenging for those loved ones. We have seen recent reports in the newspapers of conflict between a second spouse and some daughters of quite a well-known South Australian businessman.

One example of how these amendments will assist includes enabling a grandchild of a deceased person to make a claim for family provision where a parent of the grandchild of the deceased person has died, rather than this being conditional on both grandchild's parents being deceased, as initially proposed, which helps it go even further in terms of supporting those grandchildren.

Further, section 116 now provides that the court's primary consideration when determining whether to make a family provision order is the wishes of the deceased person. This is something I have had to deal with in practice a lot, in my experience, where either a child is essentially cut out of a will or on occasion a spouse has been cut out of the will, trying to explain to the person who is writing that will that actually there is no foolproof way to do that. We would often do it by way of what we called an expression of wishes clause in a will. We would explain that in the will the wife or husband has been intentionally left out and that these are reasons for doing so.

Having to explain that that is not a foolproof way of dealing with the matter, and that the court might come to its conclusions and, in fact, include your spouse when you did not want that to happen, has always been a difficulty I have had to deal with in practice. This will hopefully help with that situation. It is important for a deceased person to have control over where their assets go once they have passed.

One of the essential aspects of this bill is to modernise wills and estates. The proposed amendments will provide for electronic wills and wills to be witnessed remotely via videoconferencing. These changes reflect not only recent technological advancements but societal shifts and will also provide for greater accessibility. These amendments will allow for all residents of South Australia, regardless of their postcode, to have access to provisions for a legitimate will, particularly those in regional and remote communities around the state, just like in metropolitan areas.

Again, by way of practical knowledge, we had a number of clients in the regions we would travel out to, particularly in the Riverland, to do their wills. It was then a process of having to drive back to the Riverland once the wills were done to have them properly witnessed, often with powers of attorney and advance care directives as well. Being able to get through that process—take the initial instructions, work through the document with your client and then at the end be able to have a Zoom call, or whatever the technology might be, to go through that final version and have it witnessed without necessarily having a solicitor from Adelaide having to go out to the regions just for the signing—is actually very useful, and we saw that in COVID as well. One of the difficulties in COVID was having these documents witnessed.

As the bill aims to modernise the process of making a will and reduce instances of fraudulent testamentary acts, it adds flexibility to the execution of wills through electronic means. It also enables people to put their affairs in order more conveniently, particularly in times of crisis or emergency. Maintaining the integrity of the will-making process is imperative, and the bill's proposal to authorise the courts to impose stringent requirements for verifying electronic wills is, of course, a completely appropriate course of action. This measure aims to counter the possibility of fraud or malpractice, and ensures the genuineness of the electronic wills that are admitted for probate.

The Succession Bill will also require service providers to provide better clarity and transparency, allowing beneficiaries to understand the process and gain insight into the arrangements and the transactions relating to the estate. The Succession Bill also addresses the administration of deceased estates, further improving this process. Presently, we have the estate administration act 1973, which governs administration, and while it has served its purpose it is now outdated and requires an overhaul.

The proposed Succession Bill aims to reduce lengthy processes, red tape, complexity and inconsistency in the administration of deceased estates by increasing clarity and making the system more user-friendly. Moreover, the bill aims to simplify and clarify administrative procedures, making them less cumbersome for those undertaking the administration of a deceased's estate. This is especially important in intestacy situations, where the deceased person did not leave valid instructions for the disposition of their assets.

Intestacy laws apply when someone dies without a will or where the will they have left is invalid, either improperly witnessed or contains clauses which are invalid. Something to be aware of is that marriage will invalidate a will but that divorce does not. These are some of the things you need to know in practice. Intestacy can certainly cause significant disputes within families, such as in situations where a person dies without leaving a will and has a surviving spouse who may be entitled to the entire estate at the exclusion of the deceased's children.

That can be quite traumatic for those children. Or, if the deceased has children, the spouse may receive only a small portion of the estate up to $100,000, and the balance divided amongst the spouse and children. That again can cause issues between the spouse and those children, particularly when it is not the parent of those children. This practice is outdated, particularly giving the evolving nature of families, where a person may have children with different partners or where blended families are very common.

The Succession Bill proposes changes to these existing intestacy rules by offering a fair and equitable solution. For example, it looks to provide for applying a formula that identifies the surviving relatives of the deceased and assigns a portion of assets to each category or an individual on the list.

Finally, the Succession Bill 2022 deals with the issue of family provision which allows certain eligible persons to make a claim on the estate of a deceased person for financial support. Under the bill, rules on family provision will be clarified and streamlined and will take into account, again, those changing needs that we see amongst the community with changing families.

For example, the bill recognises that children may need financial support beyond the age of 18—I can tell you there are more and more young adults still living at home with their parents; I have one at home right now—and provides for their rights to claim on the estate. The Succession Bill is vital in modernising current laws and adapting them to respond to the needs of today's society. These amendments take a holistic approach to improving the administration of deceased estates, reducing the burden of probate processes and recognising different familial structures.

I thought it might be interesting to members in this place to give a couple of real-life examples. The first one was actually my first estate planning client. I went into the room with my supervising partner. I was a junior lawyer and I walked into a room with what appeared to be, and what was, a husband and wife, probably in their 60s. He disclosed that he had been diagnosed with multiple sclerosis, and we started the process of taking instructions and working out what his assets were and who his family members were. He had two children. He was in the meeting with (legally) his wife.

As we talked through 20 minutes in it was apparent that he also had another partner that the wife knew about. They had been separated for something like 20 years, but it actually took about 20 or 30 minutes of the discussion for that to come out. The wife was there because she was obviously concerned about her children, and with the MS diagnosis she was keen to make sure she was there supporting her husband.

So the partner was not in the room, the legal wife was, and we were dealing with two children, one who had a drug addiction. So for my first wills client, it was quite complex to work through the various issues in terms of claims that might come when he passed, and in terms of inheritance family provision claims, particularly where he wanted to do certain things for the child who had the drug addiction in terms of protecting those assets through a trust.

We also had the partner who had been around for multiple years, whom this person wanted to have less of the estate. He actually got along quite well with his wife and wanted his partner to have less of the estate than would happen under an inheritance claim. So talking through all of those issues and learning that on the ground with that supervising partner was actually quite interesting as my first wills experience.

One of the other ones that comes up regularly—and this is, I guess, a word of warning for people in this place and anyone who is listening—is please do your estate planning early. I can tell you as a solicitor the worst time to go and have to deal with writing a new will is once you have (and it happens too often) a terminal cancer diagnosis. I have had too many of those. I have had to go to hospitals for them. It is the worst time to try to have a clear, logical discussion about where you want your assets to go, particularly when there are blended families and complexities. For those in this place, I encourage you all to get your estate planning done early, have those conversations. It is not that scary. A good solicitor will guide you through it.

They will also guide you through powers of attorney and advance care directives, so if you are alive but in a car crash and in a hospital bed, who is going to look after making sure your phone bills are paid, and all your loans are paid, and who is going to be able to talk to water companies and things like that—really basic stuff that you cannot do with privacy laws unless you have a proper power of attorney. Obviously, the advance care directive is a very important instrument as well for your medical and lifestyle decisions.

All those issues are very important to deal with up-front and early. I always say that wills are not a once off. You should be pulling them out every year, and having a look at making sure they are relevant, and if you need to update them, update them, but at least have something in place. We have seen in the media some of the disputes that can come up because people have not planned things properly. It can be really traumatic for families and can cause scars for generations that flow through.

I have done a lot of family business succession planning as well. They are very difficult. You have the business and the family mixed into one. Often you will have one child who is working in the business and one who is not. How you deal with those issues to equitably split up the estate, knowing that only one is actually ever going to work in that business and that is really of value to them, and how you balance those things up are difficult conversations to have, but they are much more difficult to have when you are in a crisis situation than if you are able to plan early and have those discussions.

It might take some time to form your final instructions, but to start that conversation with a good lawyer who can guide you through that process I think is very useful. I commend this bill to the house, and certainly that is my tip for today.

Debate adjourned on motion of Mr Odenwalder.