Complex Family Structures & Family Provision Claim Risks for Executors

When it comes to how a Will works, most people have a mistaken notion that the Testator (the person making the Will) can decide as they please and distribute their Estate as they see fit. And while bequeathing their Estate to whomever they want is something a Testator can technically do, what happens after their passing and during the Estate Administration process is an entirely different matter.

Here in Australia, people’s testamentary freedom (or their ability to leave their Estate to anyone they desire) is kept in check by certain laws pertaining to the family. These laws enable courts to use their judgement and make sure the Testator’s surviving family members are provided for so they can keep living in the manner they are accustomed to or are at least adequately supported with the Estate proceeds.

As the Executor of a Deceased Estate, you know you already have quite a task on your hands, especially if the Estate is substantial. But what happens when someone contests the Will through a family provision claim? What will you do if there’s a complex family structure involved in a family provision claim?

1. Family Provision Claims

In the matter of contesting Wills, family provision claims are among the most common.

When someone makes this claim or invokes the Family Provision Act (or its version in the applicable state), they must be able to show proof or evidence that they have been left inadequately provided for or omitted completely from the Will.

If a Beneficiary claims that they have been treated unfairly or are left with inadequate financial provisions, they usually mean the Estate has not taken their daily living expenses, education (where applicable) and advancement into consideration.

However, what is considered adequate provision and proper maintenance is highly subjective, and even the courts have difficulty defining these terms. What is certain, however, is that what constitutes adequate or proper varies from case to case.

Moreover, laws concerning family provision claims vary from state to state.

Also, these claims become even more difficult to deal with when there are complex family structures involved.

2. Complex Family Structures

Divorce and remarriage (or having a new relationship after divorce or even widowhood) lead to the development of complex families.

When their marriage breaks down, some people start new relationships and some eventually remarry or have children with their new partner. This new partner may also be a divorcee with their own children from their previous marriage.

These expanded, blended or complex families where both the partners have children from previous relationships, and perhaps even have joint children with their new spouse or partner, can pose additional complications in Estate Administration.

In such cases, it is the law that decides on eligibility when it comes to family provision claims.

To avoid confusion, below is a discussion on family provision claims in New South Wales (NSW), Queensland (QLD), Victoria (VIC) and Western Australia (WA).

2.1 Family Provision Claim NSW (New South Wales)

In NSW, the laws on family provision claims are embodied in the Succession Act 2006.

Eligible persons who can contest a Will in NSW include the following persons:

• husband or wife or current or former spouse;
• someone in a de-facto relationship with the deceased at the time of the latter’s death;
• children, grandchildren, dependants (wholly or partly dependent on the deceased); and
• people with a close personal relationship with the deceased.

Although NSW law does not state outright that a parent, sibling, step-child or former de-facto spouse is an eligible person, they may be eligible under category (e). That is, if they lived together with the deceased and were dependent on the deceased.

2.2 Family Provision Claim QLD (Queensland)

The laws concerning family provision claims in Queensland are governed by the Succession Act 1981.

There are three categories of persons who can contest a Will through a family provision claim in Queensland: the deceased person’s spouse, child, and dependant.

Spouse:

• Husband or wife
• De-facto partner
• Registered partner (pursuant to the Relationships Act 2011)
• Former husband, wife or registered partner

Child:

• Natural (biological) child
• Unborn child
• Lawfully adopted child
• Deceased’s step-child

Dependant:

• Parent
• Parent of a child of the deceased (if the deceased’s child is below 18 years of age)
• Anyone below 18 years of age who was being maintained by the deceased at the time of their death (e.g. a grandchild or step-grandchild, former step-child, brother or sister, niece or nephew or foster child who has been ‘wholly or substantially maintained’ by the deceased person at the time of the deceased person’s death)

2.3 Family Provision Claims Victoria (VIC)

In Victoria, the Administration and Probate Act 1958 is the law governing the so-called ‘Testators Family Maintenance’ or TFM claim.

The eligible persons who can make a TFM claim in Victoria include the:

• spouse or domestic partner at the time of death;
• former spouse or domestic partner at the date of death;
• a carer with a ‘registered caring relationship’ (defined under the Family Law Act 1975) with the deceased;
• children who are under 18 years of age;
• children who were full-time students aged between 18 and 25;
• children with a disability (based on Section 90 of the Administration and Probate Act);
• step-children or adopted children of the deceased;
• adult child experiencing difficulty supporting their financial needs; and
• an ‘assumed child’ treated by the deceased as a natural child.

It should be noted that there are still various conditions to be met for each type of eligible person, so the guidance of a qualified lawyer (such as a probate or succession lawyer) may be necessary.

2.4 Family Provision Claims Western Australia (WA)

The Family Provision Act 1972 provides the guidelines on family provision applications in Western Australia.

Pursuant to the law, the eligible persons in family provision claims in Western Australia are as follows:

• spouse or de-facto spouse;
• a person being maintained by the deceased;
• children;
• grandchildren; and
• step-children.

There are conditions governing the eligibility of the above persons, so the guidance of a legal expert or a probate lawyer may be necessary in such cases.

3. Risks for Executors

In family provision claims, the person responsible for dealing with contesting a Will is the Executor.

The Executor plays a pivotal role in upholding the terms of and defending the Will, according to the wishes of the Testator, and preserving the assets of the Estate.

Your role as the Executor can be very demanding, and the legal proceedings that may follow a family provision claim can take an emotional toll on everyone involved. This is especially true if the applicant or person making the claim is related to you or is someone you know personally.

Prior to taking the claim to Court, the Executor is expected to take part in alternative dispute resolution methods (e.g. mediation or a settlement conference).

Once legal proceedings commence, the Executor has the responsibility to answer the claim and participate in the court process, including but not limited to:

• meeting with lawyers;
• going to Court;
• reading and preparing court documents and affidavits;
• setting out the nature and value of the Estate;
• responding to allegations made by the applicant about the Testator.

4. Be Aware of the Risks and Know What to Do

When you take on the duty of Executor and commence administering a Deceased Estate, ensure you establish all relationships the deceased has had. This includes not only the current or most recent ones, but all that may be eligible to claim from the Estate via a family provision claim. Remember, once the Estate is distributed and a claim is made successfully, you, the Executor, may be held personally liable.

When defending a Will that is being contested, an Executor may be tempted to adopt one of these approaches: defend the Will at all costs or pay off the claim more than what it’s worth just to make it disappear.

Defending the Will whatever it takes can lead to potential conflicts with other Beneficiaries or other family members, especially if the Executor is also a Beneficiary. Giving in to pressure to make the claim ‘go away’ could lead to paying off a petition that could turn out to be unmeritorious.

Therefore, neither option is advisable.

As the Executor, you also need to protect yourself and not expose yourself to risks. To ensure you find a balance between performing your task as an Executor and considering the claim, do the following:

• Maintain a calm, pragmatic and objective demeanour.
• Seek legal advice ASAP from an experienced probate or succession lawyer in assessing the merits of the claim.
• Always act reasonably and rationally.

5. What Not to Do

Whether you’re also a Beneficiary or simply doing your job as the Executor defending the Will and the Deceased Estate from claimants, try to avoid committing the following mistakes:

• Not providing documents required of you
• Forgetting scheduled meetings or appearances, or disregarding timeframes
• Acting purposefully obstructive

If you do these things, you may end up paying for your own costs rather than the Estate — and depending on how long the claim drags on, you might have to pay tens of thousands of dollars.

6. How the Courts May Decide

In deliberating on both past and recent family provision cases, the Court usually considers the following:

• size of the estate;
• financial position or needs of the applicant or claimant; 
• the interests of other parties with a legitimate claim on the Deceased Estate; and
• their relationship to the deceased.

Deciding on what adequate provision means could be difficult as its interpretation varies with every case. At any rate, family provision claims that make it to court are a serious matter, and the Courts require documentary evidence from both sides to ensure they make the right decision.

Get Qualified Legal Advice from Experts

In matters like family provision claims and similar complications, it’s crucial to get the right legal advice from probate or succession lawyers who know the ins and outs of the applicable local state laws. This way, you can avoid making costly mistakes as you perform your tasks as an Executor.

For guidance on the Estate Administration process and before speaking with a lawyer contact us to discuss your situation.