Family Provision

If a will is challenged, it is often by way of a family provision application.

 

What is a family provision application?

A family provision application is a claim made against the deceased estate whereby the plaintiff seeks additional provision to what they receive under the will, if any.

In 2018, there were over 1000 applications made in the Supreme Court of New South Wales.

 

Who can claim?

Persons who are eligible to claim include: The deceased person’s husband or wife;

  • The deceased person’s husband or wife;
  •  A person who is living in a de facto relationship at the date of death (a two-year relationship is not required);
  •  A deceased person’s child;
  •  A deceased person’s former husband or wife;
  •  A person who was dependent upon the deceased and was a member of the same household; and
  •  A person who was living with the deceased and was in a close personal relationship with the deceased at the time of death.

Although former husbands and wives are eligible to claim, if there was a formal family law property settlement during the deceased’s life, they would generally have poor prospects of success.

Just because a deceased person was dependent upon a potential applicant, that does not make the that person automatically eligible.

Brothers and sisters, stepchildren and grandchildren cannot automatically claim. They need to establish dependency.

Whether or not a de facto relationship existed, can often be an issue. An applicant needs to establish that they were a “couple living together”. However, it is not essential that they resided in a single common residence.

 

What are the principles that apply?

The merits of a claim depend on many factors which include:

  • The relationship with the deceased and the duration of the relationship;
  • The obligations and responsibilities owed by the deceased person to the applicant;
  • The size of the deceased’s estate;
  • The financial needs of the applicant (and anyone with whom they are cohabitating);
  • Any disabilities suffered by the applicant;
  • The contributions made by the applicant to the deceased’s estate or the welfare of the deceased;
  • Provision made by the deceased for the applicant during the deceased’s lifetime;
  • Whether the applicant was being maintained by the deceased before the deceased’s death;
  • The character and conduct of the applicant; and
  • Any other matter the court considers relevant.

The number of relevant factors make these claims complex and sometimes costly.

An applicant’s affidavit will normally be a lengthy document addressing the various relevant factors.

Overall, the various factors are considered in the light of a deceased’s “moral obligation” and “community standards”.

 

Claw-back provisions?

A family provision application can result in a successful applicant receiving assets of the estate.

However, a successful applicant can also receive “notional estate” which can include the deceased’s superannuation and property held by the deceased jointly with another person. These assets do not automatically form part of a deceased estate.

Notional estate can also include property that has been transferred by the deceased to another person within three years of the date of death.

The deceased’s assets can also include equitable interests. For example, a deceased person may have contributed towards the purchase price of a property but may not be registered on title.

 

Defending a claim

The executor/administrator of the estate will be named as defendant. If a claim is made, the defendant will be ordered to file a number of affidavits including an affidavit disclosing the assets of the estate.

A defendant can also file evidence in reply to an applicant’s affidavit. This evidence can address the relationship between the applicant and the deceased, including evidence of “disentitling conduct” such as violence or estrangement. The evidence may also include letters or statements made by the deceased.

There have been cases where applicants that had been estranged from the deceased for more than 20 years have still been successful.

Evidence in defence of an application can also include evidence relating to the financial circumstances of competing beneficiaries.

 

What is the process?

Many potential family provision applications are settled amongst the parties without the involvement of the court.

Of the applications that were filed in court in 2018, only 3.5% of family provision applications went to a hearing.

Almost all family provision cases are settled at some form of mediation.

 

Time limits

The limitation period that applies to family provision application is 12 months from the date of death.

If you are eligible to make a claim, it is important that you seek legal advice as early as possible.

 

Making your Will

In light of the threat of potential family provision applications against your estate, it is important when making your will, to ensure that “proper and adequate” provision is made for your various beneficiaries.

In blended families, this can be a difficult balancing act and sometimes various forms of testamentary trusts can be considered.

If you are making a will or updating your will it is important that you obtain proper legal advice.

 

Disclaimer

This article is for general educational purposes and cannot be relied upon as legal advice. It only applies to the law in NSW and is accurate as at 11 April 2019.

Please contact our Accredited Specialist in Wills and Estates, Manny Wood, if you have any questions.