Have you left your retirement village unit in your Will?11 April 2011 Topics: Estate planning
Many Australians appreciate the benefits and convenience of retirement village living.
But some retirement village ownership structures require special care in Will drafting, or the estate may not pass as you expect.
This is highlighted by the recent case of The Trust Company Limited & Anor v Zdilar & Ors  QSC 5, in which the deceased left “my house property… or any substitute house property I shall own at the date of my death” to her grandchildren. The rest of her estate went to her great-grandchildren.
Before her death she sold her house at Rochedale and moved into a retirement village under a sub-lease.
The issue for the court was whether the deceased “owned” a “substitute house property” within the meaning of her Will. If she did, then the proceeds she received from the operator of the retirement village would go to her grandchildren. If not, the proceeds would go to her great-grandchildren.
The court held the deceased’s unit in the retirement village was not a “substitute house property” but was the deceased’s place of residence or “accommodation facility”. Therefore, the retirement village’s exit entitlement went to her great-grandchildren and not her grandchildren.
This case reinforces the importance of careful Will drafting, particularly the drafting of specific gift clauses, and is an issue to be considered in both old and new Wills.
Other examples include clarifying who or which entity owns assets and, whether the ownership is as joint tenants or tenants in common. Problems also arise with gifts to charities where the charity’s name is spelt incorrectly or the charity no longer exists at the date of death.
If a Will is not correctly drafted, the gift may fail and fall into the residue (as in The Trust Company Limited & Anor v Zdilar & Ors) and this is generally not what the testator intended.