March 2013

Claims Against Estates

Theoretically a person is entitled to do whatever he or she wishes when they make their Will. One of the constraints on this however, is a duty under the Family Protection Act 1955 to provide for the maintenance and support of certain relatives.

The High Court and Family Court has the discretion to order that provision be made from an estate in favour of a limited range of family members of the deceased if the Court is satisfied that certain criteria are met.

In the past the Court’s practice was to be quite liberal in granting Family Protection Claims and interfering with how a person had left their estate.

However, over the last 10 years the Courts liberal attitude towards Family Protection Claims, particularly when brought by adult children, came under criticism, and lead to a more conservative approach. The Court increasingly recognised a person’s “testamentary freedom” to leave their estate how they wished in their Will.

A recent Court of Appeal decision considered the issues in a claim by adult children against their mother’s estate. The case involved an estate valued at about $4million. The mother had made a Will giving small gifts to her children, and left virtually all the rest of her estate to her nieces and nephews. The children challenged her Will claiming that their mother had not provided for their proper maintenance and support. The Court found that the three children should receive approximately 50% of the estate.

The case illustrates that although the Court will recognise a person’s testamentary freedom, there are constraints on this freedom to leave their estate to whoever they want.

The case signals that in appropriate circumstances, and particularly where there is a large estate, the Court will be willing to impinge significantly on a person’s testamentary freedom.

Getting sound legal advice before signing your Will is very important, to avoid claims against your estate and to make your Will as “water-tight” as possible.