What a will can say about a trust

Two recent cases have highlighted the importance of ensuring that any person who disposes of assets onto trust should update their will to reflect the disposition, and if relevant link to the trust. 

In one case the fact that assets purported to be bequested by will had previously been transferred to a trust was used in support of questions regarding the validity of a will.  In the other  the fact that property transferred to trust was also bequeathed by will was used in support of a claim regarding the validity of a trust.

Neither argument was successful.  As a matter of fact a willmaker cannot bequeath property that no longer belongs to the will-maker. 

While the outcome of neither matter was determined due to the failed bequests, in each case, arguments were made that had to be answered; arguments that could have been avoided with a correctly drafted will.  In both cases the bequests were treated as mistakes and it was also suggested in one case that the will-maker may not have fully understood the nature of a trust.

With different facts, an erroneous will might be read differently. 

For this reason any person who has transferred property to a trust should have their will reviewed.  This will ensure a current will, and in some circumstances, highlight misunderstandings regarding trusts and property ownership and how dispositions to trust are treated following death.

References:

• Estate of Mayberry [2012] NZHC 3502
• J E F v J G O & Ors [2012] NZHC 1021