LOCHDOWN FLICKS: ESTATE PLANNING MOVIES THAT MIGHT COUNT AS CPD (BUT PROBABLY WON’T) – PART 2

Christian Chenu

Film: Knives Out – The Slayer Rule: Why bumping off your relatives doesn’t accelerate your inheritance

Harlan Thrombey is the author of a highly lucrative series of detective novels. His amassed fortune represents an enormous estate. On the day after his birthday party, he is found dead following an apparent bloody suicide. Harlan’s new will – made one week before his death – names his nurse as the sole beneficiary. His family receive not one red dime.

Beware a beneficiary scorned

Beware a beneficiary scorned

Knives Out is Daniel Craig’s outrageously entertaining interlude between turns as James Bond. It’s a reminder that movies involving murder, incomprehensible sums of money and oddly prescient detectives are meant to be fun. It invites the audience to revel in the ghoulish spectacle of Harlan Thrombey’s family fighting over his wealth (there was even a viral marketing campaign that encouraged moviegoers to apply for a $250,000 bequest from the fictional estate by registering at www.getyourcut.com).

Where there’s a Will, there’s a Relative

Harlan’s children, like nothing so much as seagulls fighting over a chip, turn their attention to his nurse. Did she murder their father and usurp their inheritance? They interrogate Harlan’s lawyer after the will reading. The exchange between the exasperated lawyer and the frantic beneficiaries contains a surprising amount of useful legal titbits. Seeking a way to contest the will, they question the validity of their father’s last wishes:

Beneficiary #1: Would a sound mind do this? The very action speaks to unsoundness.

Lawyer: Not legally, no. You not liking what Harlan did does not speak to testamentary capacity.

Beneficiary #2: What about undue influence?

Beneficiary #1:  Yes! Undue influence!

Lawyer: Did you just Google that? You need a strong case for that.

Beneficiary #3: What about the Slayer Rule?… (sheepishly) I did just Google that.

Those six lines of dialogue cover three chapters out of the estate planning textbook. Yes, it’s true that a testator doing something you don’t like does not speak to testamentary capacity. Yes, trying to argue undue influence is like pushing a boulder uphill. But what’s the Slayer Rule?

Firstly, it’s really called the Forfeiture Rule

The Forfeiture Rule is a common law rule preventing persons who have killed unlawfully from benefiting from their victim’s death. The killer also forfeits their rights as co-owners of property held via joint-tenancy with the deceased. The rule applies to both murder and manslaughter, although it may be excluded where the killer has a significant mental impairment.

Sounds fair enough, right? Who could argue that a child that knocks off their parents shouldn’t be disinherited?

I bet you didn’t think of this

In practice, however, the rule can be harsh. It does not require a criminal conviction, or even a prosecution. It is enough if the court is satisfied on the balance of probabilities that the accused is responsible for the unlawful killing.

A typical will reading

A typical will reading

So where’s the harshness in that?

Well, consider unintentional death. What about assisted suicide or euthanasia? How about death by self-defence in the context of domestic violence? In these circumstances, beneficiaries with no (or reduced) moral culpability may still forfeit their interests in the deceased’s estate. By extension, their children (who are often the grandchildren of the deceased) would also lose any inheritance that they would have received indirectly via their parents. Also, in many situations such as assisted death, the deceased may still have wished the accused to receive their inheritance.

Does this seem fair?

In these line-ball scenarios, courts have applied the forfeiture rule inconsistently. Ultimately the test is whether the criminal culpability of the offender is such that they should be denied the benefit of the deceased’s estate. This is a seriously high standard. In Re Kumar [2017] VSC 81, an abused wife who killed her husband but who likely could have pled self-defence and defensive homicide to any murder charge, was still held by the court to have sufficient culpability that she should be excluded from her husband’s estate (that is to say, the assets the deceased and the accused held as husband and wife).

So now what do we do?

By its nature, this is not an issue that advisors can prepare for, and its operation is inherently uncertain. For instance, on the facts set out in Knives Out, it’s not obvious that a conviction for murder could be secured or, if so, whether the forfeiture rule would apply. Ultimately, the forfeiture rule might be more a piece of legal trivia to bring up during conversation at a weekend barbecue rather than during a client estate planning meeting.

Knives Out, starring Daniel Craig, Jamie Lee Curtis and Chris Evans is currently streaming on Foxtel Now and Binge

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