Can committing a crime or having criminal record impact a will or other elements of the estate planning process?
A criminal record, in particular the nature of a crime, can impact whether or not a person benefits under a will or remains in the position as an executor, trustee or testamentary guardian under a will.
A criminal record doesn’t automatically prevent a person from benefitting under a will or being appointed as an executor, trustee or testamentary guardian. But it is most certainly a factor that should be taken into account when advising a client how a beneficiary should inherit under a will, and who they should appoint in these roles.
If an heir has killed or injured the will maker
In estate administration, one key legal principle is the forfeiture rule, which prevents a beneficiary who has killed or injured the testator, or the will maker, from inheriting any part of their estate.
This rule is based on the idea that no one should profit from their wrongdoing, particularly in cases involving violence against the testator. If a beneficiary is found guilty of intentionally causing the death or serious injury of the testator, then they are legally barred from receiving any inheritance under their will.
A person who has unlawfully killed another is also unable to obtain a grant of probate or letters of administration and, if a grant has already been made, then it will be revoked.
For example, in Re Edwards [2014] VSC 392 the forfeiture rule was applied in a case of defensive homicide and upheld on appeal. Even though there had been a history of domestic violence and the will maker’s murder was committed in self-defence, it was held that the rule applied to all cases of murder and manslaughter without exception.
In the case of a person procuring the making of a will by fraud
Generally, fraud is the only crime which may affect the validity of the whole or part of a will.
Where fraud is alleged, it must be shown that another person deceived or misled the testator in such a way as to materially impact the making of the whole or part of a will in a certain way.
This includes wilfully false statements or the suppression of key facts by another person, intended either to gain benefits under a will for themselves or to prevent benefits being received by a person who would ordinarily expect to benefit under a will.
Where a beneficiary is a convicted criminal
Generally, a beneficiary who is a convicted criminal is entitled to inherit under a will, provided that their crime is not directly related to the testator’s death. However, this can potentially impact the way in which a beneficiary in this position should benefit under a will.
For example, a protective trust may be more suitable than leaving a direct benefit to a beneficiary in this position, particularly where they may misuse the funds left to them.
That being said, a testator has the freedom to disinherit or limit an inheritance to any beneficiary, including a convicted criminal, if they choose.
For example, consider the case of a client who wants to leave their entire estate to their only son, who is a convicted drug dealer, but they want to support them.
While it would not be illegal for the son to inherit the estate outright, a client may be concerned with how the funds would be used. For this reason, the client may opt to include a protective trust under the will managed by a professional trustee.
The terms of the protective trust would allow for the son’s financial needs to be met with the safety of a professional trustee managing his inheritance, minimising the risk of misuse.
Another benefit is that an immediate family member of the son would not be acting as trustee, a role which necessitates the making of difficult decisions in the best interests of a beneficiary. This often gives rise to situations of conflict, potentially impacting family relationships.
When an appointed trustee, executor or testamentary guardian has a criminal record
A person with a criminal record can be appointed as an executor or trustee under a will. However, where the crime was an offense involving dishonesty, it can constitute grounds for their passing over as executor or removal as trustee by the Court.
If a person who has committed a crime is appointed as testamentary guardian, which is someone who assumes parental responsibility in the event that both parents have died, the Federal Circuit and Family Court of Australia may intervene and appoint another person as guardian or even put the child into foster care.
Nick McColl is Legal Counsel at Equity Trustees. This article is for general information only. It does not take into account the investment objectives, financial situation or particular needs of any particular person. Before making an investment decision, you need to consider (with or without the assistance of an adviser) whether this information is appropriate to your needs, objectives and circumstances.