Estate litigation and inheritance

The Family Provision Act 1972 (WA) gives certain types of family members the right to challenge a Will:

• Parents
• Married spouses
• De Facto spouses
• Ex spouses – if you were maintaining them
• Children
• Grandchildren – if you were maintaining them
• Grandchildren – if their parent (your child), has died before you
• Step children – in some specific circumstances

There are also other types of estate challenge, common ones being for the validity of the Will or where there might have been assets of another person mixed with those of the deceased.

No two Wills are the same. You can write a Will which makes specific provisions for a foster child, or a friend, or a charity or a family member or whoever you like.

But to make sure the foster child or other vulnerable person does not lose their inheritance it must be put into Trust, and there are many kinds of Trusts.

In this case, it might well be that a Testamentary Trust is included in a Will which says that the money is to be used for specific purposes only, e.g. education or schooling or holidays or the like, until the child becomes an adult, then they get what’s left in the trust to use themselves. Not only that, but the Trust could specifically exclude the foster child’s parents or other family, for example. Trusts can be customised to say whatever you want to happen to the inheritance. One example is for such a Trust to say that only a limited amount of money is to be given to the child each year until they turn 21, or 25, or even older.

In this sort of case, who you appoint as Trustee of the Trust is very important. If you appoint someone who is not easily able to resist the overtures of the foster child’s parents or family, then they may simply succumb. However, if you appoint good independent Trustees who are confident in their role and get the right advice, they will be much more able to say no when someone comes asking for handouts.

Splitting your estate based on contributions is entirely within your rights when drafting your Will. Remember though, that what you leave a partner in a Will may be a very different amount than what you might want them to have if you are divorcing or terminating a relationship through the Family Court. The concept of contributions is very much looked at in Family Court proceedings, and less so in Will disputes. When you write your Will there is a presumption that the relationship with your partner is going to last forever, if the relationship is rocky or you are intending to divorce or split, then it calls for a very different approach to writing your Will.

That said, if you had, for example, an inherited beach house that you received from your mother which you wanted to go to your children, and not your partner, that is a very usual consideration to include in a Will.

However, if in doing that you are not leaving enough for your partner to survive, then you can see that even though that beach house may be a family inheritance, you are depriving your partner of the necessary and adequate provision that the court might otherwise award them.

You can see that there is never a one size fits all solution in how you write a Will. Everyone is unique, so talk to us about how your own particular scenario can be properly dealt with.

The short answer here is you can’t. But perhaps your parents can.

The best approach to avoid future disputes among siblings, is for your parent(s) to take the time to engage in a thoughtful and well-considered estate planning exercise – with the assistance of an experienced estate planning lawyer. This is no time for ‘DIY’, “AI” or online Wills.

If a dispute is truly anticipated and a child does need to be excluded, then a parent (or any other will maker) can consider and plan out a Will and wider estate plan that properly excludes that child, or makes only a modest provision for them. It is crucial that if this is to be done, it is done properly.

Simply leaving a child out, or giving them a ‘token’ sum, does not prevent them from later bringing a challenge to the Will and obtaining a share of the estate. Much depends on how the exclusion is crafted in the Will, how wealthy that excluded child is, the nature of the relationship with the parents, if there was a good reason for the exclusion and whether there is any disentitling conduct. There are a host of reasons that will be unique to each family.

If a child is to be excluded, then we often advise the Will writers to create separate statutory declarations setting out the true story and reasons of why they are not leaving anything to that child, so that at least their evidence can be provided after they are gone.

Another, more involved strategy, is for the parents to consider some asset restructuring, to either: give assets away before they die, transfer them into trusts, or other forms of joint ownership, to make sure the amount they leave in their estate, that is controlled by the Will is less. Use of superannuation (self-managed or otherwise) and life insurance with separate beneficiaries can also be an extremely effective tool for such scenarios.

These strategies are necessarily complex and often require considered advice and time to implement. There can also be tax and other financial consequences to consider. None of these strategies should be attempted lightly.

If it’s at all possible, families can also seek to engage with the child who is to be excluded or receive a lesser share ahead of time and ensure all parties are aware of the parents’ wishes and intentions. If done properly, these family conferences can be very helpful, and sometimes even provide an opportunity to reconcile. Of course this does not necessarily prevent a later challenge, but it can go some way to explaining the true intentions of the will makers and making sure there are fewer surprises after they pass away.

As experienced succession lawyers, we understand that each family and the assets they hold are unique. With our experience of how to manage and defend estate disputes, we are well placed to develop tailored strategies to create the best outcome for you and your family.

This is a very common question and scenario. Blended families are also one of the most challenging areas of modern estate planning because you have to carefully balance provision with new partners, step-children and your own children.

Remember that you are free to leave our estate any way you wish. You can leave everything to the cat home if you want. But the court can order that you have a moral obligation to provide for those who are dependent on you or in financial need.

So, your new partner may be in need and require you to leave them assets to make sure they are housed and fed and such, but then again, depending on their own financial resources and circumstances in life, you may not have to.

Similarly, if you have young children who rely on you, your obligation to provide for them is much higher than if you have adult children who are out in the world making good lives for themselves and are not reliant on you.

But ultimately, the short answer is you can use Trusts to make sure you provide for both your new spouse and your own children. The big question is how much provision you make, and that really depends on your own personal circumstances. We regularly create Wills for blended families where each spouse leaves assets to each other in a Trust, for their lifetime to make sure they are looked after, and when both of the spouses are gone, then assets split down family lines back to children. There is no one size fits all solution here, but we deal with it regularly and we’ll be able to give you the right advice when we know more about your own family dynamic.

This is a very common request and question, and one for which there is an easy answer.

The answer is a Trust. Trusts can be used here to ensure that money ‘leapfrog’s’ a generation and goes down to the next, but who you appoint as Trustee is very important as well as making sure that the children themselves are not needy or dependent and so have claims of their own against your Will that might succeed.

This is a balancing act. Making sure proper and adequate provision is made for your beneficiaries and it is always a question of evaluating who is in the spectrum of possible claimants.

It is also very common for parents to want to make sure their children, or grandchildren, don’t get inheritances that will end up in the pockets of their spouses, and again the answer is Trusts. They can be structured to make sure that partners and spouses don’t get access to it, especially via divorces or terminations of relationships in the Family Court.

This is not unusual, but needs some delicate balancing to make sure things even out.

The start is usually to record the existence of the loans or gifts, and whether they are to be repaid, or taken into account in making provision in a Will, or not. Without any good evidence of the gift or loan being made, we often see families fight over this as it comes down to ‘he said/she said’.

Good documentation is the key and can be a very effective way to ensure everyone starts on the same page.

There really is no such thing as a ‘traditional family’ anymore, with blended families and stepfamilies more common than not. This has clear implications for estate planning, and in particular we see more and more clients asking us what their obligations are in relation to their stepchildren, how to protect any inheritance they wish to give their natural children,or alternatively how to protect their stepchildren’s inheritance from the other parent.

As you will see under our heading ‘Who can challenge my Will?’, stepchildren can make a claim against an estate if they were being maintained by the deceased, or if the deceased stepparent had themselves inherited the stepchild’s own parent’s assets (subject to a certain threshold amount). If you have no significant relationship with your stepchildren, and they are not dependent on you, then in most cases you are not restricted from leaving them out of your Will, but you must be careful in how you go about it. What becomes tricky is where you do want to leave something to your stepchildren, but you also need to ensure that your stepchildren’s inheritance is protected from their surviving parents. The best way to do this is via a discretionary Testamentary Trust in your Will.

This really depends on firstly, whether there is a Will, and secondly, what that Will says.

Good Wills make sure they accommodate these sorts of things, but poor Wills can fall well short and leave head scratching ambiguity. That can lead to the parties having to seek the intervention of the court to interpret the proper meaning of the Will, which can be very expensive indeed.

It also depends on how the asset pool is owed and the use of other structures like Trusts and superannuation.

If there are no Wills, then there could be a very unpleasant outcome, depending on which family members remain alive (see FAQ ‘What happens if I die without a Will).