How to Safeguard Your Estate from Family Provision Claims

Relevant For:

Individuals planning their estate to ensure their assets are distributed according to their wishes without legal disputes.

Key Points:

• Definition: Family provision claims arise when a Will fails to provide adequately for certain dependants.
• Impact: Legal costs of claims can deplete estate value, causing hardship for intended beneficiaries.
• Factors: Courts consider the estate size, applicant’s relationship with the deceased, financial needs, and contributions to the estate.
• Cases: Examples highlight the importance of careful estate structuring to avoid disputes.
• Strategies: Seek advice, gift assets during life, use trusts, make binding nominations, and document non-binding wishes.

Full Article:

While you generally have the right to leave your estate to anyone you choose, failing to adequately provide for certain dependants in your Will can lead to family provision claims against your estate.

Understanding Family Provision Claims

State legislation typically stipulates that if a deceased person fails to make adequate provision for the proper maintenance and support of their spouse, child, or dependant, a Family Provision application can be brought against the estate. This can result in further and better provision being made for the aggrieved person.

A 'spouse' includes married, de facto, and civil partners. 'Child' encompasses biological, adopted, and stepchildren. A 'dependant' is defined as a surviving minor, a parent of the deceased, or a parent of the deceased's minor child, who was substantially supported by the deceased at the time of death. The dependant must demonstrate an ongoing need for maintenance and support.

The Importance of Avoiding Family Provision Claims

Protecting your estate from family provision claims ensures your assets are distributed according to your wishes. This is crucial if you intend to exclude someone from your Will, as improper exclusion can lead to complex and costly disputes.

Family provision claims can significantly deplete the estate's value due to legal costs, potentially depriving intended beneficiaries of their rightful shares and causing undue hardship and emotional strain.

Factors Considered in Family Provision Claims

Courts consider various factors when determining whether further provision should be made from an estate, including:

• Size and value of the estate
• Relationship between the deceased and the applicant
• Financial needs and character of the applicant
• Previous maintenance or support provided by the deceased
• Obligations, responsibilities, and promises made by the deceased to the applicant
• Age and health of the applicant
• Contributions made by the applicant to the estate

Case Examples

In Banks v Seemann, the court awarded further provision to an applicant despite their substantial assets, recognising their contributions to the deceased's business and ill-health. Conversely, in Vigolo v Bostin, an applicant's claim was dismissed despite a moral claim, as adequate provision had already been made.

Strategies to Avoid Family Provision Claims

While it's impossible to completely prevent family provision applications, strategic planning and advice can mitigate the risk.

Consider the following strategies: