You can’t pick your family, but they can claim your estate

An ‘eligible person’ can make a claim on your estate if you did not make adequate provision for that person.  An eligible person includes a spouse or former spouse, a child, a person living with or in a close personal relationship with, or a person who was at a time wholly or partly dependant on, the deceased.

If a claim is made on an estate, the Supreme Court may make a Family Provision Order (FPO) for the estate to provide for an applicant what they were disentitled to in the will.

At first glance, you have to ask:  surely the will makers’s wishes should be upheld?  However, the cases demonstrate that the court strikes a balance between the will maker’s intentions and the entitlement of the applicant to the estate of the deceased.

Estranged family members can still claim

Estrangement within families is not uncommon – estrangement often results in changes to the will – the will maker believes that their estrangement relieves them of their duty to provide for that family member.

However, the Courts take into account the circumstances that gave rise to the estrangement, and sets a high standard of forgiveness for the testator.

For instance in Foley v Ellis [2008] NSWCA* the judge stated:

“The more recent authorities have held that a state of estrangement or even hostility between a testator or testatrix and a claimant does not terminate the obligation of the testator or testatrix to provide for the claimant”.

In that case, the mother of three children left a smaller share of her estate to her estranged daughter, who did not have many assets or much income. The mother and daughter had been estranged, both mother and daughter behaving “in a manner hurtful to each other”.  While two other siblings would have got about $1.1m each, the estranged daughter was left with only $165,000 under the will (although her two sons also got $165,000 each).  When the court considered the daughter’s financial and other circumstances, they said that a wise and just mother would have made greater provision for the daughter, and increased her share to $500,000, reducing the shares of the other two children to $850,000.

In another case, the court said that will makers are entitled to leave their children out of their will, such as when a child treats a parent callously, withholding support and love in their declining years, without justification.  (Ford v Simes [2009] NSWCA 351)

Costly consequences

If there is a claim on your estate after your death, costs of the legal proceedings are often paid out of the estate. This means that if the claim is made and your testamentary intentions were not clear, the proceedings can become litigious and costly. Legal proceedings can significantly diminish an estate and leave the remainder beneficiaries with a reduced inheritance.

What should you do?

To reduce the risk of a claim on your estate, you should ensure that your will is current and you are clear about your testamentary intentions. You should also prepare a supplementary statement to be kept with your will detailing the reasons behind your testamentary intentions.

Peter McNamara at Clark McNamara Lawyers and their team of experienced and dedicated solicitors can assist you with your estate planning. Contact us today to ensure your estate is secure.

*Case: Foley v Ellis [2008] NSWCA 288


Source: Written by Peter McNamara, Partner at Clark McNamara Lawyers, Sydney