In this article we talk about dealing with an unfair Will. We are not considering the validity of a Will or being left out of a Will entirely – rather that the distributions made to one or more beneficiaries might be considered to be unreasonable in the circumstances.
There are many reasons why a Will might actually be, or be perceived as unfair, including:
- The Will of the deceased person (testator) may be old and was not updated to take account of changing personal or financial circumstances. For example, the testator may have divorced and not revised his or her Will to take into consideration a new relationship or family members.
- A child may have provided significant care during a parent’s final years whilst other siblings carried on with their lives without interruption. The ‘carer’ likely incurred personal and financial expense or missed opportunities due to these commitments, however the Will may not take this into account. In the circumstances, it might seem reasonable that the child be compensated for the gratuitous services.
- A falling out often causes people to act rashly resulting in a hurried decision to cut somebody out of a Will. Even after conciliation, the testator may not turn his or her mind to reinstate that person as a beneficiary.
- The testator may have been unduly influenced or simply had a favourite child to whom he or she chose to benefit at the expense of others. Alternatively, a widow may be left wanting with a greater share of assets being left to the testator’s children or others.
Whatever the reason, an unfair Will raises questions that can no longer be answered, and creates uncertainty between the beneficiaries. If you relate to any of these situations, you may find comfort in knowing that there are ways to deal with an unfair Will.
What can you do about an unfair Will?
The concept of ‘testamentary freedom’ means that people should be free to determine how their assets are dealt with after they die.
Traditionally, Courts have been hesitant to interfere with this principle. However, society’s views and the concept of ‘family’ have changed immensely over the years. Consequently, a Court has discretion to change the Will of a testator to alter the distribution of his or her estate where a moral obligation to provide for an eligible person exists and the Will fails to provide for the person. This is known as a Family Provision claim.
How is a Family Provision claim made?
Three main steps are involved in making and determining a Family Provision claim.
1. You must be an eligible person.
2. It must be shown that at the time of the deceased’s death, he or she had a duty to provide for your proper maintenance and support and the distribution proposed under the Will fails to do that.
3. If the above two elements are satisfied, the Court will determine an appropriate adjustment in the circumstances taking into consideration the size of the estate and the interests of other beneficiaries or claimants.
The definition of an eligible person and the timeframes within which to make a Family Provision claim, differ between State and Territory jurisdictions.
Usually, a spouse, former spouse, de facto partner or child of the deceased will be an eligible person. Step-children, grandchildren, parents, siblings and persons in a ‘close personal relationship’ or who lived in the same household as the deceased, may in some circumstances and jurisdictions, also be eligible.
Your lawyer will assist in determining your eligibility to make a Family Provision claim and advise you on the time limitations applicable for your area. In New South Wales, Family Provision claims must be filed within 12 months from the date of death of the deceased person.
Proving a Will is unfair
Once eligibility criteria are satisfied, a range of factors are considered in determining whether the Will is unreasonable and if so, what adjustment should be made.
The Court assesses the degree to which the deceased had a moral obligation to provide for the claimant in light of the proposed distribution of the estate. The claimant’s financial situation is taken into account as are the competing financial needs of other beneficiaries.
The Court looks at the Will and any evidence regarding the deceased’s obligations and intentions with respect to the claimant. The person’s character and conduct are relevant as is the nature and length of the relationship with the deceased. The claimant’s age and whether he or she has a physical or mental disability are also factors.
Financial and non-financial contributions made by the claimant to the property of the deceased person, or to the welfare of the deceased person or his or her family, are also important considerations.
Mediation is usually compulsory before a Family Provision claim proceeds to hearing. Settlement out of Court is often preferable, particularly when it appears obvious that a claim is justified and the estate assets can meet that claim. The executor’s role is to preserve the assets of the estate and an out-of-Court settlement is likely to assist in protecting assets from being depleted by legal costs incurred by going to Court.
Are there other ways to remedy an unfair Will?
Subject to certain conditions, a Deed of Family Arrangement can be used to document an agreement reached between the beneficiaries to distribute the estate assets contrary to the provisions of a Will.
All beneficiaries must be over 18 years and have full legal capacity. The parties (beneficiaries, executors and third parties, if relevant) should seek independent legal advice.
Where the parties are agreeable, or at least open to negotiation, a Deed of Family Arrangement can be a practical and cost effective way of mitigating a Family Provision claim by remedying an unfair distribution under a Will.
Good legal advice is essential as such arrangements may have stamp duty and taxation consequences which must be addressed prior to formalising the agreement. The deed will also need to protect the executor from future claims or liability arising under the Will.
If you are a relative or somebody who shared a close relationship with a deceased person and feel that the Will is unfair, then you may be able to make a Family Provision claim. Your lawyer will discuss the eligibility criteria and assist in making the claim or negotiating a settlement with the estate.
It is important to try to avoid Will disputes arising after your death. This can be achieved by ensuring that your Will is up to date and takes account of changing circumstances in your life. Your lawyer can advise on structuring your Will to limit the possibility of a future Family Provision claim.