In this context, it is not so much that the Will itself is being challenged, but rather applicants make application for provision to be made for them out of an estate where they believe that they are entitled to a share, or a bigger share than the Will provides. If successful, the share of some or all of the named beneficiaries would be reduced.
Currently, these applications (called Family Provision applications) are made by spouses, children (including stepchildren even if their parent has already passed) or dependants who are disappointed by what is given to them through a Will, or where there is no Will, and they believe that they should have a greater share than what they might receive under the rules of intestacy.
The family provision claims are quite undesirable in estate administration because they lead to the estate being put to significant uncertainty, cost and delay. Furthermore, where (say) one of the Will maker’s children is left out, the litigation involved in the family provision claim will generally pit the other children against the claimant, leading to the fracturing of any relationship between them.
Family provision claims can also be made by step children, and will sometimes be made by children against the interest of their surviving parent, as an example, by a child where their mother was the named beneficiary in the Will.
The proposed changes (relevantly) include requiring the executor of the estate to notice all people who might be eligible to make a family provision application (eg children, step children, or dependants of any kind including potentially mistresses or…errr…misters) that they might be eligible to make a family provision application against the estate, giving a copy of the Will (if there is one) and a current statement of assets and liabilities including a reasonable estimate of the value of each asset and liability.
Where this is likely to result in further claims being made is that currently, there is no obligation to give any such notice to the various parties. Provided that no notice of any potential claim is made, then (currently) the executor has a degree of protection if it distributes the estate in accordance with the terms of the Will after certain time periods have elapsed (currently, six months from the date of death is the minimum time period).
With notices going out to potential claimants – which many people would be likely to interpret as them having a legitimate right to claim – and including details of the wealth available in the estate, then it would be fair to consider it likely that people such as estranged children or step children might be excited into making claims that they otherwise might not have – in other words, the letter might be taken as an invitation to make a claim that otherwise wouldn’t be made. Anecdotally, insurers complained when personal injury claim numbers increased after lawyers were allowed to advertise, and one might expect that a similar situation arises here, and perhaps more targeted advertising by lawyers for family provision claims.
For will makers, this would bring about risks in particular in respect of estranged children or stepchildren, who might not have even known that their parent had passed away until well after the time periods had elapsed, or who might not have been inclined to claim.
These proposed changes make estate planning and proper structuring even more important, in particular where there are disputes within the family, or blended families.
QBM Lawyers provide comprehensive estate planning and administration services, if you would like to discuss your situation, please contact Peter Muller at peterm@qbmlaw.com.au
