Where there’s a will there’s a rel­a­tive! Claims against deceased estates

In brief

This year marks the 100^th anniver­sary of the com­mence­ment of fam­i­ly pro­vi­sion leg­is­la­tion in New South Wales. Despite this, we are con­tin­u­ous­ly sur­prised by the num­ber of peo­ple who come to see us about their estate plan­ning needs and who are not aware that their will may be chal­lenged in court. With peo­ple liv­ing longer and accu­mu­lat­ing more wealth, claims on deceased estates are becom­ing increas­ing­ly common. 

In this arti­cle, we dis­cuss the nature of fam­i­ly pro­vi­sion claims and the mea­sures you can take to help pro­tect your estate from one.

What is a fam­i­ly pro­vi­sion claim?

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).

Can any­one make a claim on my estate?

No, only cer­tain cat­e­gories of peo­ple (known in the Act as ​‘eli­gi­ble per­sons’) are able to make a fam­i­ly pro­vi­sion claim. Eli­gi­ble peo­ple 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

   1. either a grand­child of the deceased; or

   2. 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.

When will the Court make a fam­i­ly pro­vi­sion order? 

The Court is per­mit­ted, under Sec­tion 59 of the Act, to 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. 

Some of the mat­ters that the Court may take into account in deter­min­ing whether a fam­i­ly pro­vi­sion order should be made include:

1. any fam­i­ly or oth­er rela­tion­ship between the appli­cant and the deceased person;

2. the nature and extent of the deceased person’s estate;

3. the finan­cial resources (includ­ing earn­ing capac­i­ty) and finan­cial needs, both present and future, of the appli­cant, of any oth­er per­son in respect of whom an appli­ca­tion has been made for a fam­i­ly pro­vi­sion order or of any ben­e­fi­cia­ry of the deceased person’s estate;

4. any evi­dence of the tes­ta­men­tary inten­tions of the deceased per­son, includ­ing evi­dence of state­ments made by the deceased person;

5. any pro­vi­sion made for the appli­cant by the deceased per­son, either dur­ing the deceased person’s life­time or made from the deceased person’s estate; and

6. the char­ac­ter and con­duct of the appli­cant before and after the date of the death of the deceased person.

Ulti­mate­ly, an order for pro­vi­sion is in the Court’s absolute dis­cre­tion, tak­ing into account all of the cir­cum­stances of the indi­vid­ual case.

Can I pre­vent some­one mak­ing a claim on my estate?

Yes, 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. We advise that you speak to a lawyer to dis­cuss whether this is an appro­pri­ate course of action for you.

Is there any­thing else I can do to help pro­tect my estate from a claim?

A prop­er­ly draft­ed will can go a long way to bol­ster­ing your estate from a fam­i­ly pro­vi­sion claim. We rec­om­mend con­sult­ing an expe­ri­enced estate plan­ning lawyer to assist you in this regard.