Estate Litigation Associate Eliza Walker sets out eight scenarios, each a common precursor to a dispute over a deceased estate. Identifying them early can make the difference between a manageable conversation now and a costly legal dispute later.
Estate disputes rarely come out of nowhere. The warning signs can become apparent years before a parent or loved one passes away.
Below are eight warning signs of a deceased estate dispute that we regularly see in our practice, and some questions to ask yourself if you find yourself in a similar situation. It is worth understanding your position before a death has occurred, as you may have the opportunity to make arrangements now to avoid future disputes.
1. A joint bank account set up “for convenience”
Mary adds her adult child, Danielle, as a joint owner on a bank account because Danielle lives nearby and can help manage day-to-day banking. Mary’s other two children live further away.
Do you know what happens to a joint bank account when one of the account holders dies?
When Mary dies, any funds held in the joint account pass automatically to Danielle as the surviving joint owner, regardless of what Mary’s Will says. This means that Danielle inherits significantly more than her siblings. Her siblings are hurt by this and stop speaking to her.
When opening a joint account, or adding a family member to an existing account, it is very important to consider how this will impact your estate planning arrangements.
2. Money managed under a Power of Attorney
Mark is appointed under an Enduring Power of Attorney to manage his dad Peter’s financial affairs. Mark complies with his duties as attorney for three years, taking care of Peter’s expenses and keeping things running smoothly. Then, Peter dies and Mark’s siblings, who were not involved in the day-to-day management of Peter’s affairs, ask for a full account of every transaction made under the Enduring Power of Attorney.
Do you know what records an Attorney is legally required to keep, and for how long?
Attorneys have a legal duty to account for transactions undertaken on behalf of a principal. The absence of clear records is one of the most common causes of disputes between siblings after the death of a parent.
3. An estranged family member cut out of a new Will
Elizabeth grows distant from her son Elliott due to the influence of Elliott’s new partner. Elliott stops visiting her regularly and, after a while, stops speaking to her entirely. Years later, Elizabeth changes her Will so that Elliott receives significantly less than his siblings.
Do you know whether an estranged child can still make a successful claim on a parent’s estate? Do you know whether a child who has received a gift under a Will can still make a claim against the estate?
Estrangement and existing gifts can affect the strength of a claim. But neither will automatically preclude an eligible applicant from bringing a claim.
4. An executor appointed without the family’s knowledge
Sophia tells her daughter Caitlin, in confidence, that Caitlin is the most capable and trustworthy of all her siblings. Sophie appoints Caitlin as sole executor without discussing it with the rest of the family. The other siblings only find out after Sophia has died.
Do you know what an executor’s legal obligations are to the other beneficiaries?
An executor is not required to disclose their executorship, or any other information, to beneficiaries prior to the death of a Will-maker but will be required to disclose information about the estate to beneficiaries once the Will-maker has died.
5. A valuable item promised informally, but never put in writing
Lucy’s children have always admired an expensive painting that Lucy bought many years ago. Lucy hasn’t made a specific provision in her Will regarding the painting and believes that her children will “work it out between themselves.”
Do you know how personal items – like a painting, a piece of jewellery, a car – will be distributed if there is no specific gift for them in a Will?
Items not specifically dealt with in a Will fall into the residue of the estate. They will either be sold and the proceeds divided between the residuary beneficiaries, or the beneficiaries may agree that one of them can retain the item as part of their distribution. In either scenario, it would be wise for the executor to obtain an independent valuation of the item.
6. A gift made when a person’s health is in question
Harrison has developed early signs of memory loss but has not been formally diagnosed with dementia or any other cognitive condition. He decides to make changes to his Will, gifting his cousin Casey a significant amount of money and reducing gifts to his two children.
Do you know what factors a Court will consider when assessing whether a Will can be challenged based on a person’s mental capacity?
Those factors can include timing, medical evidence, and capacity assessments and/or advice provided by a lawyer.
7. A new Will made shortly before death, favouring the primary carer
Sheila takes on most of the caregiving responsibilities for Dawn, her elderly mother. She drives Dawn to appointments and helps her with day-to-day tasks. Not long before Dawn’s death, Sheila takes her to see a lawyer to update her Will. Dawn updates the Will to gift Sheila a larger percentage of the estate. After Dawn has died, Sheila’s siblings accuse her of influencing their mother for financial gain.
Do you know what evidence will be necessary to defend a Will against a claim of undue influence?
Being the primary carer does not, on its own, invalidate a Will, but the circumstances around how and why the Will was changed will be examined closely if challenged.
8. A blended family and a promise to “pass it on later”
Sean remarries and leaves his entire estate to his new husband, Steven, on the understanding that Steven will later leave specific assets, including family heirlooms, to the Sean’s children.
Do you know what rights Sean’s children may have if Sean dies before Steven? Will they make a claim against Sean’s estate, or Steven’s, or both?
The entitlements of stepchildren differ from state to state. Any parents bringing children into a new relationship should ensure they understand what may happen to their children’s inheritance if they die before their new partner.
What happens when a deceased estate dispute occurs and a Will is contested
A person who has been left out of a Will, or who has not been adequately provided for, may be able to bring a Family Provision Application. There are strict time limits involved, and not everyone involved in a family inheritance dispute is automatically eligible to bring a claim.
We have set out the full eligibility criteria, time limits, and what the court considers in our detailed guide to contesting a Will by bringing a Family Provision Application.
Read more here: Contesting Wills
It is also worth clearing up some of the misconceptions that repeatedly come up in these conversations, such as the belief that adult children are automatically entitled to an equal share, or that a family provision claim means the Will itself is invalid.
Read more here: Contesting a Will can be a taboo topic – 10 common misconceptions explained.
If you’re an executor or a beneficiary named in a Will and are concerned that another family member may challenge it, there are different strategies and considerations to take into account.
Read more here: What executors need to be prepared for when defending a claim
Attwood Marshall Lawyers – expert advice on estate disputes and family provision claims
Whether you recognise your own family in one of these scenarios, are already in the middle of a dispute, or want peace of mind while your parents are still here, our estate litigation team can help.
Contact our Estate Litigation Department Manager, Georgia Trapp, on free call 1800 621 071 or direct line 07 5506 8278 to arrange a confidential discussion about your situation.
A properly constructed Will and power of attorney documents are crucial documents to ensure that all family members, particularly children, are protected.
If you have complex family circumstances or assets, receiving advice about the most suitable way to structure your estate can mitigate the risk of claims being made by eligible people you may wish to exclude from your Will.
To set up an appointment with one of our estate planning solicitors, please get in touch with our Wills and Estates Department Manager, Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call 1800 621 071 anytime.
