Have You Been Left Out of a Will?

by Nicole Rockliff

Chapter 3 of the Succession Act 2006 (“the Act”), which deals with family provisions, was commenced on 1 March 2009 and applies to the Estates of people dying on or after that date, and repealed the Family Provision Act 1982 (“FPA”).

Broadly speaking, the Act provides that where the testator (i.e. the deceased person who made the Will) does not make adequate provision in their Will for the proper maintenance, education and advancement in life of certain defined dependants, the Court may in its discretion do so.

An application under the Act must be made within twelve months of the death of the deceased.  The Court may permit a claim to be brought after that time in cases where “sufficient cause” is shown. It is a matter for the Court only to decide whether to allow a claim made out of time. Unlike what was the position under the FPA, an extension cannot be achieved by agreement or consent between the parties.

Under the Act, persons who qualify as eligible persons under the Act may apply for an Order for provision. There are six categories of eligible persons, namely:

  1. The wife or husband of the deceased when the deceased died;
  2. A person in a de facto relationship with the deceased when he or she died. Pursuant to Section 21(c) of the Interpretation Act 1987, a de facto partner is defined as another person (whether of the same sex or a different sex) if:
    1. The person is in a registered relationship or in a State-registered relationship with the other person within the meaning of the Relationships Register Act 2010; or
    2. The person is in a de facto relationship with the other person;
  3. A child of the deceased;
  4. Former wives and husbands of the deceased;
  5. A person:
    1. Who was, at any particular time wholly or partly dependent on the deceased; and
    2. Who is a grandchild of the deceased, at the particular time or at any time, a member of the household of which the deceased person was a member;

    6.   A person who was living with the deceased in a close personal relationship at the time of the death.

A “close personal relationship” is defined as:-

  • A relationship (other than marriage or a de facto relationship, and not necessarily a sexual relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care (but excluding paid domestic and personal carers including those working for government or charitable organizations).

The above categories of eligible persons are “closed” categories, as only people who fit into one of the above categories may apply to the Court for a Family Provision Order. In that regard, the Court has no discretion to permit a claim from a person who is not an eligible person, even in exceptional circumstances.

The Court determines an application for provision in a two-stage process, namely:

  1. The first stage is for the Court to determine whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life; and
  2. This stage only arises if that determination be made in favour of the applicant, and a Court is required to decide what provision ought to be made out of the deceased’s estate of the applicant.

The matters the Court may have regard to when considering whether an applicant is an eligible person and whether or not to make a Family Provision Order and, if so, the nature of the Order, include, inter alia:

  1. any family or other relationship between the applicant and the deceased person including the nature and duration of the relationship;
  2. the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant or to any other person in respect of whom an application has been made for a Family Provision Order or to any beneficiary of the deceased’s person’s estate;
  3. the nature and extent of the deceased person’s estate (including any notional estate) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered;
  4. the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for an Order or of any beneficiary of the deceased person’s estate;
  5. In circumstances where the applicant is cohabitating with another person, the financial circumstances of the other person;
  6. any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for an Order or any beneficiary of the deceased person’s estate that is in existence when the application is being considered or that may reasonably be anticipated;
  7. the age of the applicant when the application is being considered;
  8. any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family, whether made before or after the deceased person’s death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant;
  9. any provision made for the applicant by the deceased person both during the deceased person’s lifetime or made from the deceased person’s estate;
  10. any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person;
  11. whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death;
  12. whether any other person is liable to support the applicant;
  13. the character and conduct of the applicant before and after the date of the deceased’s death;
  14. the conduct of any other person before and after the date of the deceased’s death.

A person sometimes disposes of their assets while they are still alive (this is sometimes to prevent those assets going to certain eligible people after their death). Accordingly, to overcome this, the Court may make orders against the "notion" (i.e. disposed of) estate of the deceased.  This is to enable the Court to overrule these disposals. A notional estate includes assets and property which the deceased had owned but disposed of for less than market value (known as a "prescribed transaction"). For the Court to intervene, the prescribed transaction must have taken place within:-

  • Three years prior to the death of the deceased if the exchange took place with the intention to deny proper provision for an eligible person from the estate;
  • Within one year prior to the death of the deceased if at that time the deceased had a moral obligation to make proper provisions for an eligible person;
  • On or after the death of the deceased.

Whilst the Court always has a discretion as to who pays the legal costs of the proceedings, generally the costs of a successful application under the Act are ordered to be paid from the deceased estate.

Who takes care of my affairs after I’m gone?

The executor is the person chosen by you, to take charge of your estate. Their role is to collect all your assets (such as bank accounts, shares, insurance policies, etc.), pay all your debts and distribute the balance to the beneficiaries in accordance with the directions laid down in your Will.

Who would be the best person to be my executor?

Naturally you should choose someone you trust completely to carry out such an important responsibility and who you know well enough to be aware of your intentions or wishes. You should also consider their age, health, location (they should not live too far away to effectively carry out their duties) and whether they would be willing to take on the responsibility.

How many executors should I appoint?

We recommend that at least 2 executors be appointed.

Do my executors get paid?

An executor may apply to the Court for commission for the time and trouble that must be devoted to the administration of the estate.

What if I want to leave a dependent out of my Will?

For whatever reason, if you decide you do not wish to leave any part of your estate to one of your dependents you are entitled to stipulate this in your Will. However, your children or your spouse may dispute the terms of the Will on the basis that you have not made adequate provision for them (we suggest you read our article titled “Wills – you decide who should get your assets. Don’t leave it until it’s too late." It is very important you seek legal advice regarding this to ensure that your estate gets distributed to those you intend and that finalisation is not dragged out by costly and unnecessary legal action.

What if I have lent people money before I die?

Any money owed to you at your death is your asset and forms part of your estate. For example, if loans have been made to your children, then you can consider if these loans are to be forgiven in your Will.

What if I get married or divorced?

Unless your Will is worded in a particular way, a marriage after the signing of a Will automatically revokes the Will (in other words the Will will be of no effect). Conversely, divorce does not immediately revoke a Will. Therefore, if you have separated or are divorced, it is important to obtain legal advice with respect to preparing a new Will. 

Can I sign the Will at home?

On occasion we are requested to send a Will out to our clients to be signed. We prefer not to do this as there are strict rules with respect to the signing of a Will which if not followed strictly could invalidate the Will. If it is done in our office we can ensure everything is done properly.

Can I change my Will at any time?

Once made, a Will can be revoked or changed at any time. It is really of no effect until you die. If there are changes to be made we recommend you seek advice from us because if the amendment is incorrectly carried out, the delays and legal costs involved in later correcting this mistake can be expensive. 

Where is the best place to keep my Will?

We recommend you leave your Will with us, free of charge in our safe or with your Bank to hold for you. You should notify your executors as to where the Will is being held/stored. If your Will is lost or accidently destroyed and cannot be found on your death, then you may be presumed to have destroyed it with the intention of revoking it. In this situation the laws relevant to intestacy then apply. 

What if I already have a Will?

Your Will is not something that you do once and forget about. You should review your Will every 2 to 3 years. It is important you do not overlook changes that occur in your life such as marriage, divorce, de facto relationships, having children, buying and selling assets, starting or selling a business, changes to taxation laws and other changes in circumstances which can have a serious effect on your Will. When any of these events occur, reassess the contents of your Will so that it remains an accurate record of your wishes.

 

For further information or assistance please contact Rockliffs on 02 9299 4912 or email us at lawyers@rockliffs.com.au



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