A dangerous myth

When we ask our clients the broad question of how they want to divide their estate, especially when talking about estranged beneficiaries we commonly hear the response, “I’ll just give them what I have to, then they can’t contest my Will”. There seems to be this common misconception out in the community that there is some statutory minimum amount you can leave beneficiaries which preclude them from ‘contesting the Will’.

Unfortunately, it is not this straight forward, and is a point that everyone should understand when thinking about their estate planning.

Contesting a Will vs Family Provision Act Claim

Many don’t realise that there is a difference between contesting a Will and making a claim for provision or further provision from an estate pursuant to the Family Provision Act 1972 (“the Act”).

The validity of a Will may be contested on a number of grounds, such as the Will maker lacking testamentary capacity at the time the Will was made, or because the Will was made under undue influence. A successful application of this nature may see a person’s estate being distributed pursuant to an earlier Will or pursuant to the Administration Act 1903.

On the other hand, a Family Provision Act Claim does not necessarily dispute the validity of the Will itself, but rather asserts that the provision made for the applicant (if indeed any provision has been made at all) is not adequate for the proper maintenance, support, education or advancement in life of the applicant. The mere fact that some provision has been made for a beneficiary in a Will does not prevent a beneficiary from making a Family Provision Act Claim, provided that they are a person who has standing to apply pursuant to section 7 of the Act.

Section 7 of the Act outlines that the following persons will have standing to apply: –

• A spouse or de factor partner of the deceased;
• A former spouse of de factor partner of the deceased who was receiving or was entitled to receive maintenance from the deceased;
• A child of the deceased;
• A grandchild of the deceased (special circumstances apply);
• A stepchild of the deceased (special circumstances apply); and
• A parent of the deceased.

It has to be said then, that giving an estranged child or other family member a nominal amount just for the sake of giving them something, does nothing to abrogate their ability to make a claim, but may be taken into consideration by the Court when deciding if orders should be made making further provision for the applicant from the estate. The considerations of the Court in making such orders are complex and take into account a whole raft of issues, including but not limited to the size of the estate, the financial position of the applicant and other beneficiaries, the relationship of the deceased with the beneficiaries and the deceased’s moral obligation to adequality provide for the beneficiaries.

Will clauses that don’t work

We also hear from some clients (and this myth stubbornly persists amongst some sectors of the public) that you can stop family members making claims against your estate by including a clause that says something like – “If anyone challenges or disputes my Will then they forfeit any provision from my estate”. Or in other words, “if anyone is unhappy with their lot, then they get nothing”.

These clauses do not work. We cannot state it any more simply than that. They hold no weight and the Court will not entertain them at all. This is because the right to challenge is given to a person by law, not by the Will maker, and the Will maker cannot change the law.

So, what can I do?

Estate planning advice involving your lawyer, financial planner and/or accountant is imperative if you have concerns about claims being made against your estate from estranged beneficiaries or if you think the possibility of a challenge is in the air. It is often what you do and the plans you put in place during your lifetime which best protect your estate and ensure that your assets pass to the beneficiaries you intend to inherit. Your advisors can help ensure that the right mechanisms are put in place to quarantine your assets and shield them from unwanted snatching or unreasonable claims. With good advice, you may be very pleasantly surprised at what sort of outcomes can be achieved.