Old law that makes verbal promises binding coming to the fore, as elderly increasingly isolated

A law unique to New Zealand enacted in 1949 – which sets out criteria for people to claim against estates to honour the verbal promises of a deceased person – is, ironically, more relevant today than when it was written 67 years ago, due to the fragmented state of the modern Kiwi family.

The Act was designed to remedy the tendency by some people to persuade others to render services to them during their lifetime with promises of reward in their wills, but such promises were later found to be too vague to establish enforceable contracts.

Senior Associate Litigation at general practise Auckland law firm Stainton Chellew, Pamela Wright, said that the Law Reform (Testamentary Promises) Act 1949 is still valid today, due in part to the growing isolation of our elderly.

“Families are scattered. More and more children now live hundreds of kilometres away, or overseas, from their ageing parents. The result is that our elderly now look to others to take care of them, including their neighbours, friends and other members of the community.

“The elderly person may, out of gratefulness for the services, make a promise to someone to provide for them in their will (the testamentary promise).

“For example, to the neighbour who regularly transports the elderly person to the supermarket or to doctor visits, could be a promise to leave the neighbour a particular painting from their home, or their car or a sum of money. On the death of the elderly person, if that promise is not honoured in the will, the neighbour may well have a testamentary promises claim on the estate for the promise made,” said Ms Wright.

A claimant under this Act needs to show that they rendered services or performed work for the deceased person in that person’s lifetime, and that there was an express or implied promise to reward the claimant for the services or work, by making some provision for the claimant in the will.

“It’s not uncommon for promises to be made in such circumstances. Nor is it uncommon to find those promises left out of the will, or for the family to be unaware of the promise, because families are scattered and the subject of wills, death and family inheritance is not something that people generally like to talk about.

“Many claims on an estate can be settled by negotiation. The claimant would have to advise the executors of the estate of their claim in a timely way and demonstrate the services and the promise by the deceased,” said Ms Wright.

Whilst claims can be made by family members under the Family Proceedings Act, and there are alternative causes of action for unjust enrichment or promissory estoppel, examples where testamentary promises claims may apply include:
• One of the siblings moves home to care for an elderly parent and gets promised half the house for their sacrifice, but that promise is not entered in the will or made known to the other siblings.
• A family member works on the family farm alongside his or her parent with the promise that he or she will inherit the farm as a result. Again, that promise is not entered in the will or made known to the other family members.
• Separated de facto partners who continue to work together in a business where one partners receives no reward, on the promise he/she will receive some shares in the business under the other partner’s will.
• A long serving employee is promised a share in the business, or proceeds of the sale, in the deceased person’s will.

“There is no restriction on who can use this Act and no restriction on the type of services. It could be company and companionship, domestic services, moral support or transporting the person to regular doctor’s appointments.

“One feature of these ‘testamentary promises’ that are made, is that they are very rarely recorded in writing (because if they were they would be enforceable as a contract), and New Zealanders are notoriously poor at having a will, never mind regularly reviewing to ensure your will is up to date,” said Ms Wright.

For more information, visit http://www.staintonchellew.co.nz

ENDS

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