Family Provision Claims

If somebody close to you has passed away and you feel that you have not received adequate provision out of their estate, you may be eligible to commence court proceedings to claim further provision from the estate of the deceased. These proceedings are commonly referred to as “family provision claims”. This type of estate litigation is by far the most commonly tried.

Eligible Persons

In order to make a family provision claim, it is first of all necessary that you are an “eligible person”, which includes:

• a person who was the wife or husband of the deceased person at the time of the deceased person’s death;
• a person with whom the deceased person was living in a de facto relationship at the time of the deceased person’s death;
• a child of the deceased person;
• a former wife or husband of the deceased person;
• a person who was, at any particular time, wholly or partly dependant on the deceased person who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member;
• a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death.

Time limit

Strict time limits apply.

You must ensure that you make your application within time. An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court grants leave to the claimant. If the application is made out of time, the claimant must first seek an order that time for the application to be made be extended and they must have a satisfactory reason for the delay and show cause as to why the application should be allowed to be made out of time. Obviously, the greater the delay the more difficult it will be to successfully obtain the extension.

When the Court may make an order

After determining the above considerations in favour of the claimant, the Court may make a family provision order if it is satisfied that at the time of considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.

The factors the Court takes into consideration

In deciding whether to make this order for provision, the Court takes into account a multitude of factors which includes, but is definitely not limited to, the following:

• the nature and duration of the relationship between the claimant and the deceased;
• the nature and extent of any obligations or responsibilities owed by the deceased person the claimant or to any other eligible person or beneficiary of the estate;
• the nature and extent of the deceased person’s estate and of any liabilities of the estate;
• the financial resources and financial needs, both present and future, of the claimant at the time of the application being heard;
• any physical, mental or intellectual disability of the claimant;
• any contribution by the claimant to the acquisition, conservation or improvement of the estate of the deceased person;
• and provision made for the applicant by the deceased person, either during their lifetime or made from the estate;
• any evidence of the testamentary intentions of the deceased person; and
• whether the claimant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death.

Property that may be used for family provision orders

A family provision order may be made in relation to the estate of a deceased person, which includes the property of the deceased person that would have vested in the executor under the grant of probate or would have vested in the legal representative under a grant of administration. This include both property that is situated in or outside New South Wales. An order may not be made in relation to property that is not part of the estate of the deceased person or in relation to property of the estate that has already been properly distributed, unless it is designated as notional estate of the deceased person by an order of the Court.

Notional estate

When, as a result of certain property transactions, property is not included in the estate of a deceased person or where property has been distributed from the estate of a deceased person, the Court may make an order designating that property that is not included in the estate, or has been distributed from the estate, as “notional estate” of the deceased person for the purpose of making a family provision order in respect of the estate of the deceased person.

What that means is that it can claw back property into the estate that would otherwise not form part of the estate for the purpose of satisfying an order for provision to a claimant.

In general, property may be designated as notional estate if it is held by, or on trust, for a person as a result of either:

(a) a distribution from the estate of a deceased person; or
(b) a relevant property transaction.

Relevant property transaction

A relevant property transaction occurs if a person does, directly or indirectly, or does not do, anything that results in property being held by another person or subject to a trust and full valuable consideration is not given to the person for doing or not doing the act.

An obvious example of a relevant property transaction is the transfer of property without monetary consideration, however, another less obvious but highly litigated example of a relevant property transaction is the failure to sever a joint tenancy before being entitled to do so, either because of death or some other act, resulting in the property, on the person’s death, passing by survivorship to another person, including as trustee, or held on trust.

Time limits for relevant property transactions

The Court may make a notional estate if it is satisfied that a relevant property transaction was entered into by the deceased person:

• within 3 years before the date of death of the deceased person and was entered into with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order;
• within 1 year before the date of death of the deceased and was entered into when the deceased person and a moral obligation to make adequate provision, by will or otherwise, for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction; or
• on or after the date of death of the deceased person.

It is important to note that the Court will not make a notional estate order unless it is satisfied that the estate is insufficient for the making of a family provision order or any order as to costs.

If somebody close to you has passed away and you feel that you have not received adequate provision out of their estate, contact us to arrange a free no obligation consultation with our estate litigation expert.