When someone dies, leaving behind assets, disagreements between those who are left behind can often arise, whether or not a will is in place. Sometimes disagreements can intensify precisely because there is a will in place.
As one of the leading estates practices in Adelaide, we have seen just about every problem and dispute. This means we are able to predict with some certainty the ranges of outcomes that the Supreme Court may reach should any given dispute go all the way to trial – which, thankfully, is the vast minority of cases (probably less than 5 per cent).
The larger the estate, the more scope for dispute
The larger the estate, the more animosity there may be between the parties, and the more legal issues that may be involved in the matter, the more likely it will "drag out" and prove costly to the estate and as a consequence to the beneficiaries who are to (hopefully) share in the estate.
Our top 5
The top 5 estate disputes we've seen over the years and the solutions we have provided are as follows:
- The executors are unduly delaying in applying for Probate.
One of the primary roles of executors is to obtain a grant of Probate, which then allows them to officially administer the estate and divide the estate assets. There is no legal time frame required, although there is a rule of thumb called "the executor's year" which assumes that executors have up to a year to apply for Probate.
Any longer than this, then expectant beneficiaries may apply to the Supreme Court to seek an order compelling the executor to apply for Probate within a given timeframe.
- The beneficiaries cannot agree on what is to happen to the estate property.
Most estates in South Australia comprise the family home, invariably freehold, some investments and personal effects. While the investments and personal effects can (hopefully) be dealt with without too much dispute and delay, the family home is often the main focus of disagreement. One or more beneficiaries may wish to retain the property, while others may be looking to sell the property and realise some much wanted or needed cash.
The deceased's will may give certain beneficiaries an option to purchase the family home from the estate within a certain time frame, which you would think would short circuit most disputes (depending on the clarity of the relevant clauses in the will).
However, even if there is no such option spelled out in the will, there is no reason why a beneficiary or beneficiaries cannot agree to buy the other beneficiaries out – provided all parties can agree on a value or a valuer who can conduct a valuation. Once this is agreed, the agreement can be set out in a Deed.
- There have been unauthorised or unfair transfers of assets during the life of the deceased.
It is common for a testator (the person making their will) to appoint a seemingly trusted child or other relative as their attorney under a power of attorney as well as being their executor.
When the testator dies, disputes sometimes arise where beneficiaries believe there have been unauthorised or suspicious transfers of assets (for example, bank monies and even land) during the lifetime of the deceased, resulting in a reduction of the estate to be divided upon death.
What can often follow in such disputes is a forensic exercise of working out which transfers were authorised or lawful and a "clawing back" of any unauthorised transfers back into the estate. The executor may be removed from their role as executor or still allowed to apply for Probate but on the basis that they receive a lesser share in the estate and the other beneficiaries a proportionally larger share.
- The executor appointed under a will has apparently influenced the executor in making the appointment or received a greater benefit than the other beneficiaries.
As people get older, they increasingly rely on apparently trusted members of their family to take them shopping, or to doctors' appointments, the bank and, of course, to lawyers' offices for the purpose of getting their estate planning in order.
Some situations may be entirely proper and above board, while other situations may later be proved to be ones in which there has in fact been undue influence or duress brought to bear by the executor or beneficiary upon the testator to make their will a certain way.
Whether such a situation makes the will invalid or otherwise challengeable depends on the facts of each case. If the will is proved invalid, then an earlier will (if available) prevails, and if there is no earlier will, then the deceased is said to have died "intestate" (without a will) and therefore the State decides how their estate is to be divided.
Most of these cases resolve in an agreement between the interested parties, with or without the approval of the Supreme Court, to alter some of the terms of the will but otherwise leaving the will intact.
- Will kit wills
If a will is prepared by a law firm, especially a law firm with experience and expertise in estate planning, it is safe to say that there is a lower probability that the validity of the document will be disputed later on (although the provisions of the will may still result in an inheritance claim where a beneficiary asserts they have been left with inadequate provision).
However, the same cannot be said for will kit wills (also called "DIY wills" or "homemade wills" or "informal wills"). It is our experience that the majority of home made wills have one or more problems present, from ambiguity in the terms of the will, to doubts in terms of how the document was executed by the deceased and whether it was properly witnessed, to issues of undue influence or duress (referred to above) or even forgery.
The more unusual, or suspicious or error-riddled a will is, the more people will seek to challenge the will on a number of fronts, which is why will kit wills must be avoided at all costs.
As with other estate disputes, a will kit will dispute often can often be resolved on the basis that the will is deemed invalid, or otherwise valid but the terms of the will are varied by agreement or as ordered by the Supreme Court.
Most estate disputes can be avoided, before the death of the testator, in the lawyer's office when the testator makes his or her will, by the lawyer asking the right questions, getting the right information, giving (hopefully!) the right advice and obtaining the deceased's proper instructions in making their will.
Some estate disputes are simply unavoidable, because human nature can often get in the way of the execution of an otherwise sound estate plan. Many more estate disputes are inevitable because there has been bad, or non-existent, estate planning in the first place.
As estate lawyers, our role is to act in the best interests of our client, whoever they may be in the dispute, by giving them independent and considered advice, and assisting them reach an outcome that is just and equitable and as quickly and cost-efficiently as possible.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.