People can make Family Provision claims against a Will in situations where the Will is valid but the provisions stated in the Will are unfair. In such situations, the Court can make few changes in the Will or can distribute the estate in favour of those people.
A Will can be challenged based upon a number of factors if:
- The Will is grossly unfair;
- The family members have proper financial needs;
- There are dependents who were partially or fully dependent on the deceased; or
- The testator was not in proper mental capacity while making the Will.
Often, for a variety of reasons a person will fail to make proper provision in a Will for somebody in respect of whom the deceased person had a moral obligation to provide for. Those persons are normally current or ex-spouses or de-facto spouses and children or step children. Sometimes grandchildren may also have a claim as well as other persons who have, at some time, been at least partially financially dependent on the deceased and a member of the deceased’s household.
Our dedicated team of Wills and Estate Probate Lawyers are mindful of the ongoing distress, time and costs of such claims being made under the Family Provision Act, particularly if such claims proceed to a Court hearing. As such GMH Legal strive to endeavour to mediate where possible at the earliest and most appropriate time to attempt to resolve such claims to achieve the most cost effective resolution for the estate and the beneficiaries.
WHO CAN MAKE A FAMILY PROVISION CLAIM?
According to chapter 3 of the Succession Act 2006 (NSW), those eligible to apply include:
- Wife or husband of the deceased person at the time of death
- Person with whom the deceased person was living in a de facto relationship at the time of their death (including same sex partner)
- A child of the deceased person
- A former wife or husband of the deceased person
- A person who was, at any particular time, wholly or partly dependent on the deceased person, and at any time a member of the same household as the deceased person
- A grandchild who was at any particular time wholly or partly dependent on the deceased person
- A person with whom the deceased person was living in a close personal relationship at the deceased person’s death
DEFINITION OF A DE FACTO RELATIONSHIP
In Australia, a de facto relationship is defined as a relationship between 2 adults who live together as a couple and who are not married to one another or related by family.
In determining whether two people are in a de facto relationship, the Court will take all the circumstances of the relationship into including:
- The duration of the relationship (generally at least two years)
- The nature and extent of the common residence
- Whether or not sexual relationships exists
- The degree of financial dependence or interdependence, and any arrangements for financial support between the parties
- The ownership, use and acquisition of property
- The degree of mutual commitment to a shared life
- The care and support of children
- The performance of household duties
- The reputation and public aspects of the relationship
FILING A FAMILY PROVISION CLAIM IN COURT
In practice, most claims are brought in the Supreme Court since the District Court has limited jurisdiction over family provision claims up to $250,000.
As the applicant, which documents should I file in Court?
A family provision claim must be commenced by filing a Summons, stating the name of the plaintiff (applicant) and the deceased’s date of death.
In addition to the Summons, the applicant (plaintiff), must also filed the following documents:
- An Affidavit (sworn statement) from the applicant supporting the claim
- A notice setting out the names and address of any person who is or might be an eligible person
- A further Affidavit (sworn statement) setting out an estimate of the plaintiff’s legal costs and disbursements, on a party/party basis up to and including mediation.
For administration purposes, the executor/administrator of the Estate will be considered as the ‘defendant’ before the Court.
As the defendant, which documents should I file in Court?
At the first directions hearings, the defendant (executor/administrator of the Estate) will be ordered to serve Affidavits.
The Affidavits must include the following information:
- A copy of the deceased’s Will and the probate or letter of administration if granted.
- A description of the nature and value of the assets and liabilities of the deceased at the date of death
- What is, or likely to be, the nature and an estimate value of:
- The assets and liabilities of the deceased at the date of swearing the Affidavit
- Any property of the deceased that has been distributed at any time after the death of the deceased and the date of the distribution of that property
- The gross distributable estate (omitting the costs of the proceedings)
- A description of the nature and an estimate of the value of any property which, in the administrator’s opinion, is or may be the subject of any prescribed transaction or relevant property transaction.
- The name and address of every person who, in the administrator’s opinion, is holding property as a trustee, or otherwise which is, or may be, the subject of any prescribed transaction or relevant property transaction.
- Any testamentary and other expenses, or other liabilities of the estate that have been paid out of the estate of the deceased, including the amount, if any, paid form or on account of, the administrator’s costs of the proceedings,
- Whether any commission is to be sought by the administrator, and if so, an estimate of the amount proposed to be sought
- The names and address of every person who, in the administrator’s opinion is, or who may be:
- An eligible person
- An eligible person under a legal incapacity
- A person beneficially entitled to the distributable estate
- a person holding property as trustee or otherwise
Once the parties’ affidavits are filed, it is a requirement that the matter be referred to mediation.
The date and time of the court-annexed mediation will be given at the directions hearing. Parties will need to agree on a date that is convenient for both.
If a settlement is reached during mediation, the Registrar can facilitate the filing of orders and the proceedings can be finalised the same day. However, please note that the Registrar does not have power to approve a release of the Estate.
For more information about filing an family provision claim in Court and mediation, please refer to the District Law Society’s ‘Family Provisions Claims under the Succession Act 2006 (NSW)’ publication.
MATTERS TO BE CONSIDERED BY THE COURT
According to section 60 of the Succession Act 2006, in deciding whether to make a family provision order, the Court may also consider the following matters:
- Any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship.
- The nature and the extent of any obligations owed by the deceased person to the applicant or to any beneficiary of the deceased person’s estate.
- The nature and extent of the deceased person’s estate and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered.
- The financial resources (including earning capacity) and financial needs, both present and future of the applicant or of any beneficiary of the deceased person’s estate.
- If the applicant is cohabiting with another person, the financial circumstances of the other person
- Any physical, intellectual or mental disability of the applicant
- The age of the applicant when the application is being considered
- Any contribution by the application to the acquisition, conservation and improvement of the estate of the deceased person or to the deceased person’s family
- Any provision made for the applicant by the deceased person
- Any evidence of the testamentary intention of the deceased person
- Whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death
- Whether any other person is liable to support the applicant
- The character and conduct of the applicant before and after the death of the deceased person
- The conduct of any other person before and after the death of the deceased person
- Any other matter the Court considers relevant
FINAL DECISION BY THE COURT
The Court will based its decision on a two-stage process:
- Under the will, is there inadequate provision for the applicant’s proper maintenance, education and advancement in life? This is a question of fact.
- If so, what if any provision(s) ought to be made out of the estate in favour of the application. This is a discretionary exercise.
If the Court is satisfied that the deceased person has responsibility to provide for the applicant and that the will failed to make adequate provisions for the proper maintenance and support of the applicant, it may order that further provision should be made for the applicant out of the deceased person’s estate.
Please note that the Court decides each case on its own merit. There are no definitive rules about when a family provision claim will succeed, they are fact-based decisions.
At GMH Legal, over the years we have seen applicants with a range of different relationships with the deceased person be successful or unsuccessful with their claims, based on the individual circumstances of each case.
NATURE OF THE FAMILY PROVISION ORDERS BY THE COURT
If your claim is successful, the family provision order(s) may be made in any of the following ways:
- By payment of a lump sum of money
- By periodic payment of money
- By application of specified existing or future property
- By way of an absolute interest, or a limited interest only in property
- By way of property set aside as a class fund for the benefit of 2 or more persons
- In any other manner the Court thinks fit
For more information, please refer to the District Law Society’s ‘Family Provisions Claims under the Succession Act 2006 (NSW)’ publication.
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