The Significant Life Changes series.

Have you been left out of a Will (or not adequately provided for)?

What is a ‘Family Provisions’ claim?

Did you know that you may be able to contest the terms of a Will, with what is known as a Family Provision Claim against the deceased estate? The NSW Supreme Court is given the power under the NSW Succession Act 2006 to make provisions to ‘eligible persons’ out of the estate of a deceased person. In order to make a Family provision claim you must:

• Be an ‘eligible person’ in the eyes of the Court;
• Have been left out of a will or feel you did not receive your due entitlements in a will; and
• Make your claim within 12 months of the date of death of deceased.

A claimant needs to establish that, under the will, there is ‘inadequate provision’ for their ‘proper maintenance, education and advancement.’ Even in the case where a Will is valid, a person may not have been properly provided for, or may have been left out of the Will, and may therefor wish to contest the contents of the Will. For example, if a parent dies, leaving inadequate financial provision for an estranged adult child, the fact of the estrangement does not itself invalidate the child’s claim. If the estranged child can demonstrate that they were not adequately provided for, the Court may grant such provision from the estate notwithstanding the estrangement and disinheritance from the deceased.

What is Adequate Provision?

Adequate provision is defined as providing for the proper maintenance, education and advancement of one’s life.

What is Financial Need?

One of the main criteria assessed by the Court in a claim for Family Provisions is the financial need of the claimant. The claimant must be able to account for their finances, income and expenses, and be able to give evidence when viewed in totality, demonstrate the need for greater financial provision. This means making frank financial disclosures, including independent evidence of finances such as bank statements, disclosure of assets, financial resources, and all sources of income and liabilities.

A claimant who is financially dependent on another person, will probably have to provide information to the court relating to that person’s financial circumstances.

Financial need is both objective (measuring whether the claimant can meet their daily needs) and also always relative (measuring the competing needs of different claimants to an estate).

Case Law example of Financial Need in a Family Provisions Claim:

In the case of Stone v Stone [2019], the Supreme Court emphasised the importance of a claimant proving financial need in a Family Provision Claim. In this case, the deceased left her estate to her son and made no provision in her will for her estranged daughter. The daughter made a Family Provisions claim that contained a brief and unsupported reference to her financial need, with scant details on her income and liabilities. She also disclosed that she was in a de facto relationship but provided no details of her de facto partner’s financial circumstances.

The court directed the claimant to provide additional material prior to the hearing, but the daughter failed to comply. The court found that in such circumstances, a determination on financial need could not be made. The claim was dismissed, and she was ordered to pay the defendant’s legal costs.

What factors does the Court apply to determine if a Family Provisions claim is valid?

In New South Wales, the Supreme Court assesses Family Provision Claims based on a number of factors that directly relate to the individual circumstances.

These factors can include the size of the estate, the age, health, financial position and closeness of the relationship between the applicant and the deceased. As mentioned previously, the applicant must also be able to prove financial need, or that there is some other special reason why provision should be made for them.

The principles applied by the Court when determining whether to make a family provision order can be found in Section 60 of the Succession Act 2006 and are set out in the judgment of Hulme v Graham [2010] NSWSC 1281. If these factors are satisfied, then the Supreme Court has the power to afford the claimant further provision from the estate.

How does the Court determine eligibility of a Family Provisions Application?

To contest a Will with a Family Provisions Claim you must be eligible under the law. Persons eligible under section 57 of the Succession Act 2006 for a Family Provisions claim include (but are not limited to):

• a spouse of the deceased.
• a de facto spouse of the deceased.
• a child of the deceased person, including an adopted child.
• a former wife or husband of the deceased person.
• a person who was dependent on the deceased person.
• a grandchild who was a member of the deceased’s household.
• a person who was living in a close personal relationship with the deceased.

Section 59 of the Succession Act 2006 provides that a Family Provision order can be made if the Court is satisfied that:

• the person who seeks the order is eligible;
• if the eligible person is a former wife or husband, a grandchild/dependent, a “member of the household”/dependent, or someone in a “close personal relationship” – there are factors that warrant the making of the application having regard to all of the circumstances of the case;
• no adequate provision for the proper maintenance, education or advancement in life for the person has been made in the will of the deceased.

The above-mentioned eligible persons can make a claim on the following grounds:

• If they were dependent on the deceased;
• If the share of the deceased’s property is not adequate for their maintenance and support;
• If the relationship between the deceased and the eligible persons began after the last Will was made;
• If the Will does not provide enough for the eligible persons who were ex-partners or children from previous marriages or de facto relationships;
• If the eligible persons believe that the Will is grossly unfair; or
• If the Will is not clear.

Adult children of the Testator

The court typically considers adult children no longer dependents of the deceased. Therefore, in the case where each of the children of a testator is experiencing similar levels of financial need, the Court would have difficulty finding for one child as deserving of a larger share than the siblings. However, if the claimant’s siblings are financially secure and the claimant is not, then a fair but unequal distribution of the estate might be reasonable.

When can an application be made?

Not later than 12 months after the date of the death of the deceased. The Court can make an order extending time if ‘sufficient cause’ is shown. An application for a Family Provision order can be made whether or not administration of the estate of the deceased person has been granted.

How do I reduce the chances of my beneficiaries initiating a Family Provisions Claim?

A well drafted Will that thoughtfully explains the circumstances around any such exclusion or reduction of share might help. There are other more complex legal solutions but a well drafted and communicated Will is a great start. Some testators will even include a notation in their Will, or in a separate document, to explain why they have excluded, or reduced the share, of a particular person from their Will.

The importance of specialist advice in determining if you are eligible to make a Family Provisions claim is clear. For a free, no obligation review of your current circumstances, simply pick up the phone or email us on;

Call us now: 1800 893 836
Email us now: info@bizlawyers.com.au