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Estate Litigation – Claims for Family Provision Orders and under the Succession Act

Certain classes of people are eligible to make a claim against a deceased’s estate under the Succession Act 2006 (NSW) if they feel they have not received adequate provision in that person’s will or from the intestacy laws where a person dies without a will.

We have experience in acting for estates in defending claims and also in acting for claimants to ensure they receive a proper provision from an estate. Claims under the Act must be made within 12 months of the death of the deceased. They may only in certain circumstances be brought out of time.

In order to make a claim for a family provision order, a claimant must first be eligible. There are several categories of eligible persons:

• the spouse of the deceased at the date of death;
• a person living in a de facto relationship with the deceased at the date of death;
• children of the deceased (including adopted and ex-nuptial children);
• former spouses of the deceased;
• a person who was at any particular time, wholly or partly dependant upon the deceased and who was
• either a grandchild of the deceased; or
• at that particular time or any other time, a member of a household of which the deceased was a member
• a person who was living in a close personal relationship with the deceased at the time of death.

A Court will not make an order for provision in favour of an eligible person unless it is satisfied that the person in whose favour the order is to be made is an eligible person.

There is effectively a 2 stage process applied when determining a claim once eligibility is confirmed. In the first stage, the Court will is determine whether the provision (if any) made for the applicant in the deceased person’s will or by the operation of the intestacy rules where there is no will is inadequate for his or her proper maintenance, education or advancement in life. The second stage, which arises only if the determination is made that the provision made for the applicant is inadequate, requires the Court to determine what provision ought to be made considering the applicant’s needs and resources.

Many claims settle well before a hearing date however, there are options available to seek to avoid a or minimising successful claims, including:

• Having joint assets such that on a joint owner’s death the asset passes to the remaining joint owner by the right of survivorship and does not form part of the estate;
• Having assets held in superannuation funds and having valid and binding nominations in place;
• Disposing of or encumbering assets prior to your death (loan agreements and security arrangements may be utilised in this regard however consideration must be given to not falling foul of the Prescribed Transaction provisions of the Act);
• Having Statements of Testamentary Intention signed with your will or will incorporating testamentary trusts to be used in evidence to explain why you have distributed your estate as you have;
• Entering into Deeds of Family Arrangement with possible eligible persons including releases of rights under the Act; and
• Having Court Orders made by consent disposing of the right to make such claims.

Why Us?

We practice extensively in the area of claims under the Succession Act (formerly the Family Provision Act) and the defence of such claims.

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Defending Claims against Deceased Estates, Mediation and Deeds of Family Arrangement

We have a team of experienced lawyers who regularly act for estates in defending claims for provision under the Succession Act 2006 (NSW) by beneficiaries and other persons who may have been left out of a Will.

Executors and trustees of estates are entitled to be indemnified for all costs properly incurred in relation to proceedings concerning the estate.

Proceedings are filed in the Supreme Court or District Court of New South Wales by way of Summons and the Court will issue a timetable for the parties to put on evidence. Evidence is submitted by way of affidavit and can be substantial.

The legal personal representative of the estate will be required to swear or affirm an affidavit setting out the details of the deceased person, the assets of the estate and their value, what amounts have been distributed and the net value of the estate available for distribution after costs and taxes have been paid.

The parties will also generally have to put on evidence as the history of the family, the relationships between the deceased and any relevant persons, the income, assets, liabilities and expenses of the claimant and any person whose entitlement under the Will could be adversely affected by a family provision order made

Prior to a hearing, most claims made are referred to a mediation, unless the Court for special reasons otherwise orders. The majority of claims do settle at Mediation. This is due to various reasons including:

• The continuing need for family members to interact
• The risks of litigation in that one party will win and the other will lose
• The Costs of running a matter to a hearing, such as barristers’ fees
• Avoiding attending Court to give evidence and be cross-examined
• Wanting finality to a difficult period
• Avoiding personal details and events being disclosed in a public courtroom

Cases are generally settled by the filing of Terms of Settlement or Short Minutes of Order outlining the main points of the agreement that was reached.

In some cases, either in addition to or substitution for having orders made by consent, the parties to the dispute and all beneficiaries and other potential claimants come to more detailed arrangements in relation to the administration and distribution of estates. Such documents are routinely called Deeds of Family Arrangement.

A Deed of Family Arrangement need not be entered into after proceedings are commenced in relation to a deceased person’s estate. They can be entered into at any time in an endeavour to avoid estate litigation and the risks and costs associated with it.

Why Us?

We have a great deal of experience in advising executors and trustees on the prospects of claims being made against the estates they are administering, attending mediations and running contested hearings.

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Eligibility to Make a Claim

Only people who are “eligible” are able to apply for a family provision order under the Succession Act 2006 (NSW).

The definition of an eligible person is contained within section 57 of the Act. The persons eligible are:

• the wife or husband of the deceased at the date of death;
• a person living in a de facto relationship with the deceased at the date of death;
• children of the deceased (including adopted and ex-nuptial children);
• former spouses of the deceased;
• a person who was at any particular time, wholly or partly dependant upon the deceased and who was
• either a grandchild of the deceased; or
• at that particular time or any other time, a member of a household of which the deceased was a member
• a person who was living in a close personal relationship with the deceased at the time of death.

The existence of a property settlement under the Family Law Act 1975 (Cth.) may hinder an applicant from successfully bringing a claim the Act however, even if there has been a family law property settlement, if the applicant can show a material change in circumstances, the claim may succeed.

A Court may not make an order for provision in favour of an eligible person unless it is satisfied that the person in whose favour the order is to be made is an eligible person and, at the time the Court is considering the application, 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, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.

Once eligibility is established and any provision (including a lack of any provision at all) made for an applicant is found to be inadequate, a court, when making an order for a provision will determine what would in the circumstances be an adequate provision considering the applicant’s needs and resources.

Why Us?

We have years of experience in advising claimants on their prospects and advising executors in relation to defending and settling claims for provision.

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