Legislation exists that seeks to ensure a testator, in death, has adequately provided for those they had a moral obligation to support during their lifetime.
The Family Provision Act 1972 (WA) (the Act) provides that a person (falling within a particular class of people) may have a claim if they can demonstrate to the Court that inadequate provision has been made under an estate to provide for their proper maintenance, support, education and advancement in life.
If the Court agrees the provision is inadequate, it can make an order for a provision it considers adequate. In deciding this, the Court will consider the claimant's financial position, the need for the provision from the estate, the moral claim to the estate, the need and moral claim of others who have a legitimate claim to the estate and the size of the estate at the testator's death.
Section 7 of the Act outlines people who are eligible to challenge a Will, which includes:
- married and de facto spouses;
- a former spouse who was receiving or was entitled to receive maintenance from the deceased;
- a living child of the deceased or a child born within ten months of the date of death; and
- a parent of the deceased.
Grandchildren and step-children may also apply in certain circumstances.
A claim needs to be made within 6 months of the administrator being entitled to administer the estate. It is recommended a claimant informs the administrator or executor of their intentions as soon as possible to prevent the estate assets being distributed before all matters can be settled.
Commonly seen in practice are claims made by adult children. The cases of Wheat v Wisbey [2013] NSWC 537 and Braun v Australian Executor Trustees [2014] WASC 210 summarise the important principles applied to claims by adult children, including:
- Although the relationship between parent and child changes when the child leaves home, a child does not cease to be a natural recipient of parental ties or support.
- There is no universal application of the moral obligation of a parent in respect of an adult child. This is dependent on the assets of the parent and the relationship between parent and child.
- Parents are not expected to look after their adult child for the rest of their life, however if the child remains dependent on the parent, then this provision should continue after death.
- If the child has an obligation to support others, this will be a relevant factor in determining adequate provision. However, this does not extend to third persons whom the deceased had no moral obligation to support.
- The adult child's lack of reserves to meet demands is a relevant consideration. This is applicable when the adult child suffers ill health or is unable to support themselves.
- The adult child has the onus of satisfying the Court, on the balance of probabilities, of the justification of the claim.
- Rather than assuming equal split among children, the Act requires the Court take into consideration the individual conduct, circumstances, financial resources, earning capacity and financial needs of each child separately.
Generally in these claims, where no provision at all has been made, the Court may decide that this constitutes an inadequate provision. Where any provision has been made, it can be difficult to argue insufficient provision for adult children. Courts tend to link adequacy with the size of the estate. For example, in Mead v Lemon [2015] WASC 72 Olivia Mead made a claim against the estate of her late father Michael Wright. Although she had been gifted $3 million with restrictive conditions under her father's Will, this was considered inadequate given the estate was estimated to be between $800 million and $1 billion.
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.
