Each year, Sydney barrister Gregory George writes a summary of decisions involving family provision claims made in the NSW Supreme Court. These are decisions made under the NSW Succession Act 2006, where an eligible person makes a claim against a deceased estate, seeking a greater share of it.
Three observations emerged from the decisions involving family provision claims in 2020, related to the desirable degree of evidence, the apportioning of costs and the scale of awards handed down by the court.
Who is eligible to contest a will?
Most people know that people can challenge wills if they are unhappy with them. What is less known is that the only people who can challenge a will - without a few tricky hurdles - are spouses and biological children. (See "We were in a de facto relationship and I should inherit some of his estate." Which case won?)
Not even stepchildren are not allowed to claim in NSW, unless they can show they were a member of the deceased's household and were wholly or partially dependent upon the deceased during their lifetime.
The bulk of claims against wills are made by adult children, and then by spouses, usually a second spouse, ie the step-parent of the deceased's biological children. (See When the second wife beats the kids to the inheritance.)
"Adequate provision" is not the same as fairness
There is often a misconception that an adult child will receive an equal portion of an estate if they contest the will. This is not the case, and while there is a myriad of different scenarios, a typical one is outlined below.
A man with three children has a wonderful relationship with his two daughters but a strained relationship with his son. When the father dies, his will provides for his daughters equally, subject to a payment of $50,000 to his son.
He dies with an estate (including property, shares, bank accounts etc) of $1,050,000. As such, each daughter receives $500,000, and the son receives $50,000.
The son is angry and brings a claim after seeing a solicitor, telling him that he wants an "equal share" of his dad's estate.
The solicitor should advise the son at the outset that the judge hearing his claim will have no regard to the question of fairness or equality in the will. Rather, the son needs to prove his father did not make adequate provision for him.
Evidence - minutiae of relationship with deceased not particularly helpful
In determining whether adequate provision (not fair or equal provision) has been made, the judge will have regard to a variety of factors outlined in Section 60 of the legislation, including the financial position of the claimant and his relationship with his late father.
With regard to the relationship between the claimant and the deceased parent, George's analysis of the 2020 cases suggests that the court is reluctant to hear about the minute detail of any claimant's relationship with the deceased person.
It is not uncommon for lawyers reading the affidavits of a claimant to read numerous pages outlining minutiae such as how often the claimant allegedly mowed the parent's lawn, or tended to the gardens, or did some DIY work at the deceased's property, or did some grocery shopping, or took the parent out to lunch etc - all with the view of proving to the judge that the claimant had a strong relationship with the deceased person (and as such, the judge should provide fairly for him/her).
General overview of relationship with deceased is preferable
While the minutiae can sometimes be relevant if the detail has a bearing on the quality of the relationship between the claimant and the deceased person (such as hostility, estrangement, conduct that is hurtful or beneficial to the deceased), a general overview of the relationship is preferred, to the effect: "I had a close relationship with my father".
This is certainly the case at the earlier stages of any application, where it minimises the cost of preparing the application.
Importance of financial circumstances of claimant
In the example above, the primary consideration for the court would be the son's financial circumstances. Does he own a home or not? If so, does he have a mortgage? Does he have a spouse who works? What is his income? How much does he have in superannuation? What are his job prospects or opportunities? Does he have dependent children? And so on.
If the son does not have clear financial need, then he probably will not succeed in getting further money from the estate. This is because the provision of $50,000 is reasonable and adequate. I sometimes use this example:
Imagine a person dies with an estate of $300,000 with three children and one of the children is a billionaire. If said billionaire brought a claim on the basis that his/her parent should have left equal shares in the will to the children, he/she would be laughed out of court, ie the provision of nothing to the billionaire is actually adequate in the circumstances.
In saying the above, if the court determines that $50,000 to the son is not adequate because of the son's specific needs, it may order that he receives more.
While the position of the son may be: "It's wrong that a parent doesn't divide equally between his kids", the executor's position is always: "What's the point of a will if it can be challenged?"
Awards in family provision claims are not excessive
George's summary also touches on awards (being the amount of provision made to a person successfully contesting a will), noting that they are not excessive with family provision claims.
Following on with the example above, it should be noted that even if the son successfully challenges the estate, he will not get the $350,000 he wants. It might be an additional $50,000 or perhaps $100,000. The point is that it's not about creating equality between the siblings.
Of the 54 published decisions reached by the Supreme Court of NSW in 2020, only two cases gave provision over $500,000 to a claimant (keeping in mind there are cases concerning very large multi-million dollar estates that are heard by the Supreme Court). The average provision made for claimants was somewhere between $101,000 and $250,000.
Legal costs are difficult to advise on
The third observation emerging from George's 2020 case analysis is that the awarding of legal costs is extremely difficult to advise upon.
Costs don't necessarily follow the event (ie where you pay costs if you lose) and the court has discretion in how it awards costs, based upon the overall justice of the case - as adjudicated by the respective judge hearing the case, of course.
In saying that, I've noticed in recent years that the court is not averse to making costs orders against claimants. The ultimate risk of this is that the claimant pays their own costs, as well as a large portion of the defendant's costs of the proceedings - which could be significant, in fact much greater than $150,000.
So in the example above, the worst case scenario for the son would be that his family provision claim does not succeed and that he has to pay the legal costs of the estate, in addition to his own.
This is not a far-fetched outcome. Anyone considering making a family provision claim is strongly advised to weigh up this risk very carefully.
Using a specialist wills and estates lawyer
Inevitably, as a lawyer, I deal with both sides of the equation - acting for the executor defending the claim by a child, like the son in my example, or, alternatively, acting for the son in challenging the will.
A final note that most lawyers who are wills and estates specialists agree on is that it is often more problematic dealing with a solicitor on the other side who does not specialise in wills and estates matters.
If you have a claim against an estate, or you are defending a claim against an estate, it is strongly recommended that you find an Accredited Specialist in Wills and Estates Law. You cand find a list on the NSW Law Society website.
Further reading about family provision claims
This website has many other articles and cases dealing with family provision claims.
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.