Case update -adult children challenging a parent’s estate

It is an unfortunate fact of life that family relationships break down – and as a result, the aggrieved family member may alter their Will to remove the other family member as a beneficiary, or only leave them with a nominal gift – even if it is their child.  Whilst it is every person’s right to prepare a Will which reflects their wishes, the excluded person may have the right to make a family provision claim for an entitlement under the Will.

In a recent family provision case (Smith v Smith [2016] NSWSC 1077), the Supreme Court of New South Wales held that 2 of the deceased’s adult children were entitled to grants of $90,000 and $100,000 (when their initial grants under the Will were $30,000 each).

The circumstances of this particular case were as follows:

  • the deceased had 3 adult children – two sons and a daughter;
  • the first son had been estranged from his father for approximately 7 years, although over that time, the son had sent approximately 10-15 text messages to his father, but with no response;
  • the daughter had been estranged from her father for approximately 19 years, although over that time, she had made some attempts to contact her father, but with no success;
  • the second son had a close relationship with the father, caring for him in the last few weeks of his life before he passed away from bowel cancer;
  • in his Will, the father left a bequest of $30,000 to his first son, a bequest of $30,000 to his daughter, some other bequests to grand-children, with the balance of the Estate to be gifted to his second son.

LPPAfter hearing evidence from all parties regarding the difficulties of their relationship with their father, their current financial circumstances, their future financial needs, and the size of the Estate, the Court noted that the breakdown in the relationship was highly likely due to the deceased’s difficulty personality, noting that the children’s limited attempts to contact their father were unsuccessful.  The Court also noted that there was no demonstration by the children of ill-temper or violence towards their father.

Noting the children’s various financial needs, the Court increased the grants to $90,000 and $100,000 respectively (from the initial grants of $30,000).

Interestingly, the Court’s reported decision made reference to a number of comments made by various Judges over the years as to what is an appropriate provision:

Minds may legitimately differ as to the provision that should be made … [W]hat is required is an instinctive synthesis that takes into account all the relevant factors and gives them due weight: Grey v Harrison [1997] 2 VR 359 per Callaway JA at 366-367

It involves

… an intuitive assessment: Kay v Archbold [2008] NSWSC 254 per White J at 126

As to what is an appropriate provision can only be determined on a case by case basis, taking into account all relevant facts and circumstances.

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Please contact Shire Legal if you have any questions about drafting a Will to exclude certain family members, or questions about making a family provision claim.

An earlier blog by Shire Legal in relation to family provision claims can be seen here.

 

My relative has died without leaving a Will. What do I need to do?

It is a commonly held belief that if you die without a Will, your assets automatically transfer to the State.  However, this is incorrect.  It is only if you die without a Will and without any eligible relatives that your assets will transfer to the State.

Who are eligible relatives?

Eligible relatives are those who are entitled to distribution of the deceased person’s estate.  Just who is entitled depends on the deceased person’s family situation at the time of death.

(a) spouse, but no children – the spouse is entitled to the entire estate (section 111);

(b) spouse and children who are children of the deceased person and the spouse – the spouse is entitled to the entire estate (section 112);

(c) spouse and children who are not those of the spouse – the spouse is entitled to the deceased person’s personal effects, the “statutory legacy” (currently $350,000), and 1/2 of the remainder of the estate (section 113).  The children receive the balance of the estate (section 127);

Different rules apply where there are multiple spouses (see sections 122126).

(d) no spouse but children – the children are entitled to the whole of the estate (section 127) – if any child has died before the deceased person, leaving their own children, then those children are entitled to their parent’s share (section 127);

(e) no spouse and no children – the parents of the deceased person are entitled to the whole of the estate (section 128). If there is one surviving parent , the entitlement vests in the parent, and if both, it is shared equally;

(f) no spouse, no children and no parents – the brothers and sisters of the deceased person are entitled to the whole of the estate (section 129). If any brothers and sisters have died before the deceased person, leaving their own children, then allowance must be made in the division of the estate for the presumptive share of any such brother or sister;

(g) no spouse, no children, no parents, no brothers or sisters – the grandparents of the deceased person are entitled to the whole of the estate (section 130). If there is only one surviving grandparent, the entitlement vests in the grandparent, or if two or more survive the deceased person it vests in them equally; and

(h) no spouse, no children, no parents, no brothers or sisters, no grandparents – the brothers and sisters of each of the deceased person’s parents (the deceased persons aunts and uncles) are entitled to the whole of the estate (section 131). If there is only one surviving aunt or uncle of the deceased person’s the entitlement vests in the aunt or uncle. or if two or more survive the deceased person it vests in them equally.  If an aunt or uncle have died before the deceased person, leaving their own children who survived the deceased person, the child is entitled to the deceased parents presumptive share and if there are two or more children, they share equally.

If there are no eligible persons that fall within the above classes of relatives, then the estate will go to the State (section 136), unless someone who believes that they have an entitlement to the estate makes a claim.

By way of example, in 2015, a deceased man died without any living relatives, except for his ex-wife’s daughter (being the deceased’s ex-step-daughter).  The Court looked at the claimant’s financial circumstances (single mum, with 3 children, dependent on Centrelink payments) and decided to make provision for the ex-step-daughter’s future maintenance, education and advancement out of the estate by vesting the entire estate to her.

Wills

What is the process if there is no Will?

  1. Do a thorough search of the Deceased’s personal papers.  Is there a copy of a Will, even an old Will that may not necessarily be the most current Will?  Can you find any evidence that the Deceased ever instructed a solicitor, even if it was just for the purchase of property – evidence could include letters or invoices from the solicitor firm?  A thorough search will also include placing an advertisement in the Law Society Journal (a monthly periodical magazine distributed to (most) solicitors in New South Wales) asking if anyone knows the whereabouts of the Will.
  2. If no Will is located, then the closest living relative will need to apply to the Supreme Court for “Letters of Administration”, asking the Court to appoint the relative as the Administrator of the Estate, and authorising the relative to distribute the Estate in accordance with the list of “eligible relatives” as provided for in the Succession Act.
  3. The Application for Letters of Administration will need to be accompanied by an Affidavit of the Applicant for Administration (that is, the Administrator) noting the following:
  • the identity of all of the deceased’s eligible relatives, including a copy of all birth, marriage and death certificates;
  • details of the searches undertaken to locate a Will or other document evidencing the Deceased’s intentions regarding their Estate; and
  • a statement of the assets and liabilities of the Deceased.

The moral of the story?  Ensure that you have a valid Will so that your assets can be transferred to those family members and friends that you wish to provide for – not those family members that the State believes has an entitlement to your assets.

Contact Shire Legal if you have any questions about Wills or an entitlement under a deceased’s estate.

Does a disabled adult child have the right to claim against their parent’s estate?

In the recent case of Baird v Harris, the Supreme Court of New South Wales certainly thought so.

This case concerned the estate of a deceased man who had 2 adult children, one of whom suffers from Autistic Spectrum Disorder.  The deceased’s estate consisted of a property near Lake Macquarie, cash, a caravan, a motor vehicle, and a motor cycle, with a total value of $497,200.  In his Will, the deceased left the property and the motor vehicle to his partner, a cash legacy of $50,000 to each of his children, the caravan to his daughter, the motor cycle to his son, and the rest of the estate to his partner.

The Court held that:

  • the son was an “eligible person” as defined in section 57 of the Succession Act;8808432-law
  • looking at the son’s financial and material circumstances, adequate provision for his proper maintenance and advancement in life was not made by his deceased father;
  • consideration then needs to be given to the son’s financial position, the size and nature of the deceased father’s estate, the relationship between the son and his deceased father, as well as the relationship between the son and

“other persons who have legitimate claims upon the deceased’s bounty and the circumstances and needs of those other persons”.

  • the Court must made a determination “according to the feeling and judgment of the fair and reasonable man in the community, the spokesman of which is, and must be, the court itself”.
  • the son was incapable of adequately providing for himself, and it was likely that, because of his medical conditions, he will never be able to do so.
  • therefore, the son should receive additional provision by way of a lump sum which would “enable him to provide for exigencies of life and provide a buffer against future contingencies”.

As a result, the Court ordered that the son was entitled to the benefit of 40% of the net proceeds of sale of the deceased father’s property.

So what does this mean for parents who are preparing their Wills?

If you have children from an earlier relationship, it may not be enough to leave a “token gift” to your children, with the rest and residue of your estate going to your current partner, particularly if your children’s particular circumstances (as well as the size of your estate) would warrant a larger distribution being made to them.