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 proceedings under Chapter 3 of the Succession Act 2006 (“the Act”) claiming further provision from the estate of the deceased. These proceedings are usually referred to as “Family Provision Claims”. In New South Wales, these proceedings are heard in the Supreme Court of NSW Probate Division, Family Provision List.

“Eligible Persons”

In order to make a Family Provision Claim, it is first of all necessary that the claimant (or claimants as the case may be) is an “eligible person”. The definition of “eligible persons” is provided for at section 57(1) of the  Act, and includes:

(a) a person who was the wife or husband of the deceased person at the time of the deceased person’s death;

(b) a person with whom the deceased person was living in a de facto relationship at the time of the deceased person’s death;

(c) a child of the deceased person;

(d) a former wife or husband of the deceased person;

(e) a person:

(i) who was, at any particular time, wholly or partly dependant on the deceased person, and

(ii) 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;

(f) 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

The second consideration to take into account is whether the application was made within time. Under section 58(2) of the Act, 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 otherwise orders on sufficient cause being shown. 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, section 59(1) allows the Court to 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 are set out in section 60(2). This 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.

Recently in the Court of Appeal decision of Verzar v Verzar [2014] NSWCA 45, those factors were summarised by Meagher J at 39 as follows:

The primary judge concluded that Stephen’s will did not make adequate provision for the respondent’s proper maintenance, education and advance in life. Whether such provision has been made requires an assessment of the applicant’s financial position, the size and nature of the deceased’s estate, the relationships between the applicant and the deceased and other persons who have legitimate claims upon his or her bounty and the circumstances and needs of those other persons: see Tobin v Ezekiel [2012] NSWCA 285; 83 NSWLR 75 at [70] and McCosker v McCosker [1957] HCA 82; 97 CLR 566 at 571-572; Singer v Berghouse [1994] HCA 40; 181 CLR 201 at 210; and Vigolo v Bostin [2005] HCA 11; 221 CLR 191 at [16], [75], [112]. Such and assessment is necessary because of the interrelation between “adequate provision” and “proper maintenance”. Whilst the inquiry as to what is “adequate” directs particular attention to the needs of the applicant, what is “proper” requires regard to all the circumstances of the case, and in particular the size and nature of the estate and the needs of the other beneficiaures or potential beneficiaries. As was observed by Sackville AJA in Foley v Ellis [2008] NSWCA at [88], a court cannot consider the properiety and adequacy or inadequacy of any testamentary provision for an applicant in isolation from the resources and needs of the other claims on the deceased’s bounty.

 Property that may be used for family provision orders

Under section 63 of the Act, 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

Part 3.3 of the Act applies where, 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. This Part enables the Court in limited circumstances to make an order designating 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 orders in respect of the estate of the deceased person.

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

Section 75(1) states that a relevant property transaction occurs if a person does, directly or indirectly, or does not do, any 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, as described in section 76(2)(b) of the Act.

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:

(a) 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;

(b) 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

(c) on or after the date of death of the deceased person. [s.80]

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.