Estate disputes are surprisingly common in Australia. Laws across different jurisdictions allow eligible individuals to challenge a deceased’s Will if they believe they have not been adequately provided for. In such cases, a successful claim might result in the terms of your Will being adjusted in favour of the claimant. However, there are steps you can take to help protect your estate from a family provision claim so that your final wishes are respected.
This is general information only. We strongly recommend seeking assistance from a qualified professional when preparing your Will and planning your estate.
What is a Family Provision Claim and Who Can Make One?
A family provision claim (or testator’s family maintenance claim) is a legal application. An eligible person makes this claim to seek a share, or larger share, of a deceased person’s estate. Essentially, the claimant argues that the deceased failed to make adequate provision in the Will for their proper maintenance and support.
The eligibility criteria to make a family provision claim varies across Australia. Therefore, it is important to consider the legislation relevant to your jurisdiction. Generally, those eligible to make a claim are close family members such as a spouse, de facto partner and biological or adopted children. Other individuals such as stepchildren, former spouses, and certain family members who were financially dependent on the deceased may also be eligible in some jurisdictions.
Comparison of Common Claimants
| Eligible Individual | Typical Requirement |
|---|---|
| Spouse / Partner | Legally married or in a de facto relationship. |
| Children | Includes biological and adopted children. |
| Stepchildren | Eligibility depends on specific state laws (e.g. NSW). |
| Dependants | Must prove financial dependency on the deceased. |
Reasons Estate Disputes Arise
To minimise potential claims against your estate, it is helpful to consider why some disputes arise. Family dynamics play out in different ways, particularly when a loved one dies. The emotional burden of the loss can complicate already difficult relationships. Conflict between family members, especially in blended families or when there is an estranged relationship, can lead to challenges regarding the deceased’s intentions.
Fairness and Unpaid Contributions
Family provision claims can arise when individuals believe that the distribution of assets is fundamentally unfair. For example, a child may have provided significant care during a parent’s final years. The ‘carer’ may have incurred personal and financial expenses or missed opportunities. Often, the Will may not take account of these commitments.
Outdated Legal Documents
Some Wills are out of date. They do not reflect changes in the deceased’s circumstances, such as marriage, divorce, or new family members. This can create confusion and disputes. Similarly, vague or ambiguous terms in a Will can cause disagreement or uncertainty among beneficiaries.
Steps to Help Minimise Family Provision Claims
1. Prepare an Effective Will
Possibly the most important safeguard is to prepare an effective Will. A Will that clearly outlines your intentions leaves little room for misinterpretation. Your Will should be carefully drafted. It must take account of your financial circumstances, family dynamics and any potential sources of conflict.
2. Consider Potential Claimants
While you are technically free to distribute your assets as you wish, it is wise to acknowledge the potential claims of eligible individuals. Providing some level of provision could demonstrate that you considered their needs. This could potentially deter them from making a claim.
3. Review your Will Regularly
As your life circumstances change, you must update your Will. When you experience significant life events such as marriage, divorce, or the birth of a child, you should review your plan. Contact an experienced estate lawyer to ensure your documents remain valid.
4. Check your Superannuation
Benefits held in your superannuation fund generally do not form part of your estate for distribution under your Will. Rather, the trustee of your super fund decides how to direct the funds. This stands unless you have a current binding death benefit nomination in place. You should regularly check your superannuation details to ensure you have nominated your desired beneficiaries.
5. Check Property Ownership
How co-owners hold their interests in property is a vital consideration. Holding property as joint tenants means the interests are held as a whole. Joint tenancy is subject to the rules of survivorship. Conversely, property held as tenants in common specifies individual shares. Unlike a joint tenant, a tenant in common may leave their share to a beneficiary in a Will.
6. Trusts and Communication
A trust is a separate legal structure that holds your assets. Trusts can offer benefits such as preserving assets or providing for minor children. Additionally, open and honest communication with your family about your estate plan can help manage expectations. Explaining your decisions can help your loved ones understand and accept your wishes.
Conclusion
Failing to address a potential family provision claim can leave your estate vulnerable to costly legal disputes. It may be impossible to guarantee that a claim will not be made, but you can take proactive steps to minimise risks. Seeking professional advice tailored to your circumstances can help safeguard your legacy.
If you or someone you know wants more information or needs help or advice, please call our Raymond Terrace office on (02) 4987 3344 or email [email protected].