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Contesting a Will – How Easy is it to Bring a Claim?

Court provides Guidelines for Claims by Adult Children

There has been a dramatic increase in the number of claims brought by family members in deceased estate matters.  Australia has an aging population and the post World War II generation of children born during the late 1940’s and 1950’s are coming to the end of their life spans.  These hardworking parents usually have a family home which has appreciated in value substantially, along with other assets including savings and superannuation.  It is not unusual for current day estate values to be valued at several million dollars.

Inevitably this increase in the value of the assets of parents who are dying leads to disagreements amongst the family when it comes to dividing up the estate assets amongst the surviving beneficiaries.  The advent of the internet and the increased access to information for people has contributed to an increased awareness of legal rights with respect to estate matters.  Indeed, a short Google search will quickly inform you of the rights of certain parties to make a claim in each of the states and territories of Australia.  This Google search will usually include a list of lawyers advertising for estate litigation claims, frequently on a “no win no fee” basis.

It is no surprise to understand that this has led to an increased number of applications being made to the Courts in family provision claims.  These are claims made by eligible applicants who challenge the Will of the deceased on the grounds that it has not made adequate provision for them.  A similar claim can also be made in estates where there is no Will and the laws of intestacy apply.

In recent times various Supreme Courts in the states of Australia have appeared to take a more conservative approach to claims being made by adult children, especially in circumstances where the adult beneficiary is able bodied and financially established.  It is difficult to generalise in relation to these claims because they each turn on their own facts, but there has certainly been a trend for Courts to deny claims made by adult applicants who are independently secure in their financial circumstances.  This can apply even when the estate assets are of a reasonably high value.

The other issue that is relevant in this equation is the conduct of the adult beneficiary towards the deceased and the family generally.  Although what constitutes ‘disentitling conduct’ in relation to an estate is a wide and varied issue, recent decisions are focusing on  the moral aspect of the claim and the character of the beneficiary bringing the claim against the estate in deciding what provision is adequate in the circumstances of the case. The Courts attempt to follow general community expectations when it comes to considering these issues in claims by adult children.

In the recent New South Wales Supreme Court decision of Smith v Smith [2016] NSWSC 1077 (9 August 2016), Justice Hallen (the Judge in charge of the Family Provision list in Sydney) laid down some useful principles to remember when it comes to claims by adult children:

  1. The relationship between parent and child changes when the child attains adulthood. However, a child does not cease to be a natural recipient of parental ties, affection or support as the bonds of childhood are relaxed.
  2. It is impossible to describe, in terms of universal application, the moral obligation, or community expectation, of a parent in respect of an adult child. It can be said that, ordinarily, the community expects parents to raise and educate their children to the very best of their ability while they remain children; probably to assist them with a tertiary education, where that is feasible; where funds allow, to provide them with a start in life, such as a deposit on a home, although it might well take a different form. The community does not expect a parent, in ordinary circumstances, to provide an unencumbered house, or to set his or her child up in a position where she or he can acquire a house unencumbered, although in a particular case, where assets permit and the relationship between the parties is such as to justify it, there might be such an obligation.
  3. Generally, also, the community does not expect a parent to look after his or her child for the rest of the child’s life and into retirement, especially when there is someone else, such as a spouse, who has a primary obligation to do so. Plainly, if an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death. But where a child, even an adult child, falls on hard times, and where there are assets available, then the community may expect a parent to provide a buffer against contingencies; and where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise, they would be left destitute.
  4. If the applicant has an obligation to support others, such as a parent’s obligation to support a dependent child, that will be a relevant factor in determining what is an appropriate provision for the maintenance of the applicant. But the Succession Act (the Act) does not permit orders to be made to provide for the support of third persons that the applicant, however reasonably, wishes to support, where there is no obligation of the deceased to support such persons.
  5. There is no need for an applicant adult child to show some special need or some special claim.
  6. The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration. Likewise, the need for financial security and a fund to protect against the ordinary vicissitudes of life are relevant. In addition, if the applicant is unable to earn, or has a limited means of earning, an income, this could give rise to an increased call on the estate of the deceased.
  7. The applicant has the onus of satisfying the Court, on the balance of probabilities, of the justification for the claim.
  8. Although some may hold the view that equality between children does not discriminate between children according to gender, character, conduct or financial and material circumstances, the Act is not entirely consistent with that view. To the contrary, the Act specifically identifies, as matters that may be taken into consideration, individual conduct, circumstances, financial resources, including earning capacity, and financial needs, in the court’s determination of the applicant’s case.

When it comes to responding to these claims, the Court expects executors to objectively assess the evidence and the merit of the claim and if necessary, compromise the action.

The good news for aggrieved family members who believe that they have not been adequately provided for is that they may still be able to bring a successful claim against the estate.

For the Court to make a family provision order in favour of an applicant the Court must be satisfied that adequate provision for the proper maintenance and support of the applicant has not been made. If the Court is satisfied the provision made for the applicant is not adequate, the Court will then consider whether further provision ought to be made in his or her favour.

The factors the Court considers in the assessment of the above questions include the nature and size of the estate; the provision (if any) made for the applicant in the Will; the financial circumstances and ‘needs’ of the applicant for his or her maintenance and advancement in life; the nature of the relationship between him or her and the deceased; any contribution (financial and non-financial) to the deceased’s welfare and to the acquisition, maintenance or improvement of the deceased’s estate and the extent of the claims of other persons on the estate of the deceased.

Whilst the Court will take into account all of the factors outlined above the predominant considerations for the Court are the relationship between the applicant and the deceased person and the financial circumstances of the applicant.

In the event that the Court is satisfied that the power to make an order is enlivened then the Court determines whether it should make an order, and if so, the nature of any such order, having regard to the facts known to the Court at the time the order is made. The decision made at the second stage involves an exercise of discretion.

TIME LIMITS TO BRING A CLAIM

There are time limits applicable to claims brought against an estate.  In Queensland claimants have 6 months from the date of death to provide written notice of an intention to claim and a claim must be filed in the Court within 9 months of the date of death.

In New South Wales you have 12 months from the date of death to bring a claim although there is provision for executors to distribute the assets of an estate after 6 months from the date of death providing that they advertise and give a notice of intention to distribute the assets.

The Court has discretion to direct an application be heard out of time. The onus is on the applicant to establish sufficient grounds for extending the time limit. The most significant considerations for the Court in exercising the discretion include: whether there is an adequate explanation for the delay, whether the beneficiaries are prejudiced and whether the estate remains intact. Court’s take a very strict approach to applications commenced outside the statutory time limit.

The best practice is to obtain legal advice from lawyers who specialise in this area of law as soon as possible.  It is certainly not problematic to obtain preliminary advice from a lawyer on the prospects of a claim and most firms will provide this preliminary advice free of charge. Some cases may be taken on a “no win no fee” basis.

Attwood Marshall have a dedicated estate litigation team with senior lawyers who practice exclusively in this area.  Please contact Department Manager, Donna Tolley on free call 1800 621 071 or direct line 07 5506 8241 or email dtolley@attwoodmarshall.com.au in order to arrange a free initial consultation.

 

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Lucy McPherson

Lucy McPherson

  • Senior Associate
  • Estate Litigation
  • Direct line: 07 5506 8255
  • Mobile: 0400 230 522