Publications

Considering the potential family provision claim when preparing a will

What is a family provision claim?

All Australian jurisdictions provide that where a testator does not make adequate provision for the proper maintenance and support of certain dependents, the Court may, at its discretion, make an order for further provision out of the estate.  Generally, the amount awarded will depend upon the circumstances of the individual case. In NSW, the relevant legislation is Part 3.2 of the Succession Act 2006 (NSW) (“the Act”).  The Act originally only applied to estates with a will however it now applies to estates with no will (known as intestate estates).

An applicant for family provision must establish that:

1. they fall within one of the statutorily prescribed categories of applicants (“eligible persons”); and
2. there has been inadequate provision for the applicant under the will or under the rules of intestate succession.

Who is eligible to make a family provision claim?

Clause 57 of the Act sets out the list of “eligible persons”, which are:

• a person who was the spouse of the deceased at the time of the deceased’s death;
• a person with whom the deceased was living in a de facto relationship at the time of the deceased’s death;
• a child of the deceased;
• a former spouse of the deceased;
• a person:
  1. who was, at any particular time, wholly or partly dependent of the deceased; and
  2. who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased was a member;
• a person with whom the deceased was living in a close personal relationship at the time of the deceased’s death.

In section 59 of the Act, in the case of a person who is an eligible person by reason only of paragraph (d), (e) or (f) of the definition of “eligible person” in section 57, the Court may make a family provision order in relation to the estate of a deceased person, but only if the Court is satisfied, having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application.

 

Criteria for the Courts

The Act basically sets out two pre-conditions: one being a ‘jurisdictional condition’ and the other a ‘discretionary condition’.

The jurisdictional condition relates to whether the applicant has been left without adequate provision for proper maintenance and support.  If the Court is satisfied that this condition is met, the Court will embark on the discretionary question as to whether provision should be made and if so, to what extent.

There are many circumstances which the Court may consider when assessing whether adequate provision has been made, to name a few:

1. size of the estate;
2. means and financial responsibilities of the applicant;
3. relationship of the applicant to the deceased and also the age and health of the applicant;
4. services rendered by the applicant to the deceased;
5. other factors that may be relevant.

Note: in NSW, the Court is to consider the question of whether there has been inadequate provision for the applicant at the time it is determining the order and not at the time the will was prepared (section 59(1)(c) of the Act).

Disentitlement

In some cases, the testator may exclude a person from their will by specifically referring to their conduct as grounds for refusing to confer any benefit upon that person.  The testator can make a statement explaining the reasons for excluding that person from their will.  The evidential weight of statements, either oral or written, made by the testator must be considered and are in fact admissible as evidence to show the reason why the testator made the will the way they did.  

In NSW, the Act provides that oral or written statements made by the deceased may be admitted as evidence of any fact stated therein if direct oral evidence by the deceased of the fact would have been admissible. The admissibility of such evidence is unaffected by the rule against hearsay, but the value of the evidence is a matter for the Court looking at all circumstances (section 100(2) of the Act, known as the s100 Statement).

Time limits for a family provision claim

In NSW, an application must be made within 12 months of the date of death. However, the Court has discretion to direct an application to be heard out of time but only for exceptional reasons.  The Court will take into account all the circumstances of the application such as the failure of a solicitor to advise the applicant correctly, the applicant’s own ignorance of the right to apply, ignorance of the size of the estate, or of a material fact concerning the interest conferred by the will to name just a few circumstances which may lead to an extension being granted.  It should also be noted that the Court will take into account the hardship that may be caused to the beneficiaries of the estate by the granting of the extension.

Takeaway message

For peace of mind, consideration should be given to leaving an amount of money to the excluded person in order to discourage any potential claim and also preparing a statement setting out the reasons why you have not included someone in your will as this will assist the Court in when deciding to make an order. Please contact Gillian Kirwan at Carroll & O’Dea Lawyers on 02 8226 7321 should you wish to discuss this topic in greater detail.