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Family Provision Claims - Contesting a Will in New South Wales

Introduction

The law surrounding Will disputes is often complex and no two cases are the same.  The complexity is exacerbated as each state of Australia has different sets of rules which apply when contesting a Will.  For example, there are different time limits and eligibility requirements in each state.  Complexities are further compounded having regard to the discretion that Judges have in determining Family Provision Claims.

In most Family Provision claims, the Court exercises its discretion and essentially weighs three factors which are the size of the estate, the needs of the plaintiff and the interests of other parties having a legitimate claim on the estate of the deceased. The weight to be given to each of these factors varies. This is especially the case in big money estates.

Family Provision Claims are not about fairness – they are about a Court deciding whether what someone received (if anything) under a Will or under intestacy is adequate and proper.

The information below relates to claims in NSW.

Are you an eligible person?

Not everyone can contest a Will in NSW. To make a claim, you have to fall within a group of people called eligible persons as defined in the Succession Act 2006 (NSW).  These can include spouses and de facto spouses, former spouses, children, stepchildren, grandchildren, parents, and anyone else who the Deceased was maintaining. This list is not exhaustive.

Do time limits apply?

An eligible person must make an application to the Supreme Court of NSW within a year from the date of death. The Court does, however, have the discretion to extend this time limit depending on the reasons for the delay in making the claim.

How does the Court go about determining Family Provision Claims?

A practical two-stage approach (modified as required) has been adopted by the Courts in determining claims.

a. Stage 1: Has adequate provision been made for the claimant in the Will of the Deceased?  If the answer to that is yes, well, that is the end of the matter.  If adequate provision has not been made, then

b. Stage 2:  What provision should then be made for the Plaintiff?

What is proper and adequate provision in the Family Provision Claims?

The Court will determine what is proper and adequate provision in Family Provision Claims.  The Court will have regard to factors such as:

a. The quantum or size of the estate and the nature of the estate. Are there estate assets that can be readily sold, or for example, is there a residence which is currently being occupied by a widow/widower?

b. What are the Plaintiff’s material and financial circumstances?  Material includes matters such as health, age, employment, family relationships and characteristics.

c. What are the competing material or financial circumstances of any beneficiary or other claimants, because if provision is to be made to a Plaintiff, then that provision has to come from somewhere.

d. What was the nature of the relationship between the Plaintiff and the Deceased, and are there other reasons why a provision should not be made?

Disclosure of information

From a practical perspective, if you are thinking of bringing a Family Provision Claim, please bear in mind that you (and possibly whomever you may be cohabiting with) will need to be prepared to disclose details relating to your financial position, your health, your relationship with the Deceased and possibly other parties.  Not everyone wishes to disclose such matters. 

The role of an Executor in New South Wales in a Family Provision Claim

It is the duty of the person who is defending the Family Provision Claim (typically the Executor or Administrator) to uphold the provisions of the Deceased’s Will.  In doing so, they must act reasonably - particularly in an estate which is relatively small and where it may be appropriate to compromise a claim at an early stage rather than proceeding to a hearing which would cause the estate to incur significant legal costs.

Compulsory Mediation

Family Provision Claims are usually fraught with family history and discord and the legal costs can accumulate quite rapidly.

An important aspect of Family Provision Claims is that there is a compulsory mediation which is generally held after most of the initial evidence has been filed and the parties have seen their opponents relevant documents.  The idea being that the parties have the opportunity to settle the claim on terms that are acceptable to them thereby avoiding the need for further legal costs to be incurred.

Costs in Family Provision Claims

In commercial litigation, the general rule is that the successful party will generally be awarded costs noting, though, that there are different scales or levels of costs.  However, in Family Provision Claims this is not always the case and it may be that even if a Plaintiff is successful in a Family Provision Claim that he/she may not be awarded his/her own costs.  These costs may be substantial and thus it is an important consideration for any Family Provision Claim litigant. 

Generally speaking, a Defendant who is the Executor or Administrator in Family Provision proceedings may have all of or a large part of their legal costs paid out of the estate as long as they have acted reasonably. 

It is also important if you are defending the claim to consider the costs of the litigation.  If an order is made that the costs of the Plaintiff be paid by the estate then the “pool of assets” which is available for distribution is diminished by such cost orders.

The Court has shown increased concern about legal costs in Family Provision Claims, especially when the estate is relatively small.  The Court may also make a capping order which limits the amount of costs which a party or parties may recover out of an estate.  

Help is at hand

If you require more information regarding Family Provision Claims or estate litigation in NSW, you can talk to David Penkin of David Landa Stewart Lawyers:

Telephone: 02 9212 1099

Email: dpenkin@dls-lawyers.com