Family provision law recognises that you are free to distribute (or not distribute) your property and assets by Will after you pass. It also upholds the responsibility that you have as part of that to provide for certain people, usually family members. The Family Provision Act enters the chat when an eligible person deems you’ve shirked this responsibility, and the asset distribution is in contention.
The Act and its Purpose
The Family Provision Act varies slightly across the different Australian states and territories. However, the underlying principle remains the same – to provide a mechanism for eligible individuals to seek provision from the estate of a deceased person if they have not been adequately provided for. In other (simpler) words, the purpose of the Act is to ensure the relevant parties receive a fair and reasonable proportion of the estate.
The Act can account for circumstances of suspected undue influence, where there are concerns that the deceased person was coerced into writing their Will in a particular way (yikes). It can also come into play in the event that a person has died without a valid Will, leaving their estate to be distributed according to the rules of intestacy.
Eligibility for Family Provision
Family provision acts as a pathway for those with a close relationship, including family members and dependents, to claim further provision of the deceased person’s estate. It doesn’t mean that your third cousin’s dog’s aunt twice-removed can contest the estate, but some people that can bring a claim include:
- A surviving husband or wife, spouse or de facto partner of the deceased
- Biological and adopted children, as well as step-children or grandchildren who were dependent on the deceased
- A former spouse
- A person who was living with the deceased and in a close personal relationship with them at the time of their death
- Any person who was wholly or partially dependent on the deceased at the time of their death, such as a parent or sibling
As a general rule, those with a close personal relationship who are inadequately provided for by the deceased’s estate represent an eligible person. However, unless the claim is brought by a spouse, de facto or children, the claimant must show evidence that will convince the court that they should’ve been included or provided for in the Will.
Ruling on Family Provision
When a family provision claim is brought against the deceased estate, the court must also consider various factors when deciding on the amount of provision (if any) to be made. These factors can include:
- The nature and duration of the relationship between the claimant and the deceased person
- The size of the deceased estate and nature of the contained assets
- The extent of any obligations or responsibilities of the deceased toward the claimant
- The financial resources and financial needs of the claimant
- The financial circumstances of any person living with the claimant
- Other characteristics of the claimant, including their age and whether they have any physical, intellectual or mental disability (as well as their general character and conduct)
- Evidence of testamentary intention of the deceased and general validity of the Will in question
- Any previous provision made by the deceased for the claimant
- Contributions by the claimant to building up the estate
In deciding whether or not to grant family provision when someone has died intestate, the court will also consider the needs of other potential beneficiaries and any moral obligations the deceased may have had. Ultimately, for a family provision to be successful, the eligible person needs to demonstrate their needs are not met under the deceased’s current estate distribution. Other factors, such as dependency from disability, can serve as grounds for additional provision.
Examples of Matters Considered Under The Act
- A Will-maker has a sizable estate and leaves the majority of it to a charity, with only a negligible amount left to their adult children who are in financial need. In this matter, the court may find that the deceased’s estate fails to adequately provide for the children and so it can grant the family provision based on the extent of their needs.
- A Will-maker leaves a significant amount of their estate to one child, but completely excludes another child with whom they have a close relationship and who is in financial need. The court may find that the exclusion is unfair and may grant family provision to the excluded child.
- A Will-maker leaves their entire estate to their second spouse, excluding children from their previous marriage. Finding that the children should have been provided for, the court may make family provision under the Act.
Family provision is the most common cause for changes to a Will in the Supreme Court, despite that only a small portion of Wills are challenged on this basis. Even so, family provision claims serve as a tool to support certain family members who may have been overlooked, and can have a significant impact on how assets are distributed or redistributed.
Take the above considerations into account when writing your Will – they may help you think about structuring your assets in such a way as to minimise the opportunity for any contestation.
Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.