What does a little old lady, her Sydney Harbour mansions, her neighbours and a promise have in common?

The Supreme Court of New South Wales recently had to consider that very point!

The Court had to decide whether a verbal promise by the elderly Mrs Murphy to leave her neighbours two multi-million dollar harbourside properties, in the affluent Sydney suburb of Birchgrove, would override the terms of her Will.

The neighbours asserted that Mrs Murphy had promised to leave them her entire estate, including the harbourside properties, in exchange for the neighbours:

(i) Looking after Mrs Murphy as she aged;
(ii) Not moving away; and
(iii) Not carrying out building works on their own property – which would have blocked Mrs Murphy’s much loved harbour view.

Mrs Murphy did not update her Will to reflect her promise.

When Mrs Murphy died, her Will only gifted the neighbours $25,000.00 – with the rest of her estate passing to Mrs Murphy’s elderly siblings.

The unhappy neighbours sued!

The Decision

The Court found:

(i) There was in fact an understanding between Mrs Murphy and the neighbours;
(ii) Mrs Murphy had in fact promised to “see to it in my (her) Will that everything goes to you (the neighbours)”;
(iii) The promise to the neighbours was not with respect to Mrs Murphy’s entire estate but only the two harbourside properties;
(iv) The neighbours had relied on Mrs Murphy’s promise; and
(v) The neighbours had acted to their detriment by, amongst other things, taking on the care of Mrs Murphy – which they had done by putting their own family commitments below the interests of Mrs Murphy;

The Lesson

There is no better example of the importance of having your estate planning up to date.

Have you promised something to someone? Is it correctly documented?

The lengthy and costly litigation involving Mrs Murphy’s estate could have been avoided had Mrs Murphy updated her Will.