Date posted: May 26, 2016

Prepare and protect yourself from claims against deceased estates

When it comes to estate planning, we are continuously surprised by the number of people who are unaware that their will may be challenged in court.This is in spite of the fact that family provision legislation in New South Wales has been around for 100 years, having commenced in 1915.

As people live longer and accumulate more wealth, we are noticing a rising trend as claims on deceased estates become more common.

In this article, we discuss the nature of family provision claims and what you should consider, to best protect your estate from such a claim.

Just to be clear, a family provision claim is a claim for provision (or additional provision) from an estate of a deceased person where 1) that person left the applicant with inadequate provision in their will or 2) where the person died without a will (on intestacy). Claims of this nature are governed by Part 3.2 of the Succession Act 2006 (NSW) (Act).

As for who can make a claim, only certain categories of people, known in the Act as “eligible persons”, are able to make a family provision claim and they are as follows:

  1. the spouse of the deceased at the date of death;
  2. a person living in a de facto relationship with the deceased at the date of death;
  3. children of the deceased (including adopted and ex-nuptial children);
  4. former spouses of the deceased;
  5. a person who was at any particular time, wholly or partly dependent upon the deceased and who was: either a grandchild of the deceased; or at that particular time or any other time, a member of a household of which the deceased was a member; and
  6. a person who was living in a close personal relationship with the deceased at the time of death.

The Court can make a family provision order under certain circumstances. Under Section 59 of the Act, the Court can make an order for provision for an applicant where, in the Court’s opinion, adequate provision for the “proper maintenance, education or advancement in life” of the applicant has not been made by the will of the deceased or by the operation of the laws of intestacy.

Listed below are a few, but not all, of the matters that the Court may consider when determining whether a family provision order should be made:

(a) any family or other relationship between the applicant and the deceased person;
(b) the nature and extent of the deceased person’s estate;
(c) the financial resources (including earning capacity) and financial needs, both present and future, of the applicant;
(d) the character and conduct of the applicant before and after the date of the death of the deceased person.

These are only a few of the considerations for the court. Ultimately, an order for provision is in the Court’s absolute discretion, taking into account all of the circumstances of the individual case.

If you want to prevent someone making a claim on your estate, it is possible. There is provision in the Act for a person (Testator) during his or her lifetime, to make an application to the Court for a Section 95 release. This is a court order that approves the release of an eligible person’s right to make a future application for provision from the Testator’s deceased estate.

As with most legal proceedings, an application for a Section 95 release can be a costly exercise to undertake and a lawyer will be able to advise whether this is the right course of action for you.

It is worth keeping in mind that a properly drafted will can go a long way to bolstering your estate from a family provision claim.
Always keep in mind that where there’s a will there’s a relative and you just never know when they might turn up!

This article has been supplied by Angela Harvey, Partner and Elizabeth Santifort, Solicitor at Swaab Attorneys. The advice is designed to be general in nature.