You may have heard of “war stories” of Wills being challenged.
Occasionally a Will is challenged because the person making the Will (“Testator”) was “forced” or coerced to sign over his/her estate on his/her deathbed (i.e. Testator was subjected to “undue influence”).
There are also other instances where the person making the Will may not have had the capacity to make a valid Will, for instance, where he/she suffered from dementia and lacked legal “capacity”. In such cases, the Will may be challenged because of that legal irregularity.
Can a “valid” Will ever be challenged?
The answer is “yes”, and these incidences of otherwise valid Wills being challenged is increasing.
The Supreme Court of NSW has the power to make provision out of the estate of a deceased person, where the deceased did not make “proper” provision for another person.
Such orders are called family provision “orders” and can be sought by an “eligible person” who was left out of, or inadequately provided for, in an otherwise valid Will.
The relevant legislation specifically says that when making a family provision order the Court should consider if “…adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the Will of the deceased person.”
There are a number of categories of “eligible persons”:
- the partner of the deceased, when the deceased died;
- anyone in a “de facto relationship” with the deceased, when he/she died;
- a child of the deceased;
- a former partner of the deceased;
- a person:- who was, at any particular time, wholly or partly dependent on the deceased;- who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member; or- who was living with the deceased in a close personal relationship at the time of death.
A family provision order must be sought within twelve (12) months of the deceased’s death.
When considering whether to make a family provision order, the Court may have regard to the following matters:
- any family or other relationship between the eligible person and the deceased person;
- the nature and extent of any obligations or responsibilities owed by the deceased person to the eligible person;
- the value of the estate;
- the financial resources (including earning capacity) and financial needs, both present and future, of the eligible persons, including if they have any dependants;
- if the eligible person is cohabiting with another person, the financial circumstances of the other person;
- any physical, intellectual or mental disability of the eligible person;
- the age of the eligible person when the application is being considered,
- any contribution (whether financial or otherwise) by the eligible person to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family;
- any previous payments or bequeathments made by the deceased to the eligible person, at any time;
- any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person;
- whether the eligible person 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 eligible person,
- the character and conduct of the eligible person before and after the date of the death of the deceased person,
- the conduct of any other person before and after the date of the death of the deceased person;
- any relevant Aboriginal or Torres Strait Islander customary law;
- any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered.
If an eligible person is successful, where are the funds paid from?
A Family Provision Order may be made provided that the property which is the subject of any order is/was capable of being vested in the executor or administrator of the estate.
For instance, if there is cash in a bank account in the name of the estate of the deceased, then any payment can be paid to the claimant from any such account, if so ordered by the court.
An order may not be made in relation to property that does not form a part of the estate or has already been distributed by the executor/administrator in accordance with the Succession Act 2006 (The “Act”), unless that property is designated as “notional estate” and subject to a “notional estate order”.
An order may not be made in relation to property that does not form a part of the estate or has already been distributed by the executor/administrator in accordance with the Succession Act 2006 (The “Act”), unless that property is designated as “notional estate” and subject to a “notional estate order”. An example of funds that were declared “notional estate” was a distribution of cash from an estate, which had already been paid to a beneficiary. This money was then paid into that beneficiary’s superannuation fund – arguably in anticipation of the looming family provision claim. The claimant sought a family provision order, seeking a payment from the estate, however there were inadequate funds in the estate to pay the claimant. The Court made a notional estate order in respect of the beneficiary’s superannuation account and ordered that the successful claimant be paid a sum of money from the beneficiary’s superannuation fund (see Charnock v Handley  NSWSC 1408 per Hallen J).
Challenging a Will – What to do?
To avoid a challenge to your Will, you must ensure that you make adequate provision for all persons who may or might be considered to be “eligible persons”.
A provision under your Will to a potential eligible person must also be more than a token gesture – it should materially assist that person.
It is also important to note that there have been cases where even specific reference to a potential eligible person in the deceased’s Will, containing an express intention not to make provision for that person (e.g. “because they were estranged”), were disregarded by the Court and a family provision order was made, notwithstanding the specific instructions and intentions of the deceased.
If you would like any further information or advice, please contact one of our Will & Estates lawyers at Foulsham & Geddes