We are seeing an increasing trend of disappointed beneficiaries challenging Wills in circumstances where the beneficiary has either been left out of a Will totally, or is not satisfied they have received enough.
In Queensland, the only people entitled to challenge a Will in relation to whether they have been provided adequate provision or not, are spouses (with an extended definition covering de-facto spouses), children (also including an extended definition of who is a child) and dependants.
Will drafting is becoming more and more critical to try and assist clients to achieve their objectives in how they want to leave their estate.
Complicating factors can include clients who are on their second or third relationship with children from previous relationships, as well as the importance of understanding what assets will be available to the client’s estate upon death. Are they assets that will fall into the estate for distribution according to the terms of the Will, or are they assets in superannuation funds or life insurance policies which do not necessarily form part of the estate? All of these factors need to be considered together when preparing the Will.
Some recent judgments provide continuing confirmation of the willingness of disappointed beneficiaries to make claims against an estate and also the willingness of the courts to alter the terms of the Will to provide provision from an estate for beneficiaries who have been left out entirely or not provided for adequately.
Two such cases are as follows:-
The applicant for better provision from his father’s estate was the adult son of the father’s first marriage. The father’s second wife and adult son of the second marriage received substantial provision under the Will from the very large estate. In fact, the court found that the second wife and son, who are the major beneficiaries from the father’s Will, had understated to the court the value of the father’s estate by as much as $10 million dollars!
The applicant was provided $500,000.00 in his father’s Will. The court found that the father treated the applicant son badly after separation from his first wife when the son was 13 years of age, showing only occasional concern, but more often indifference or hostility. The father would not allow his son and his children into his home when they attempted to visit him.
The applicant’s financial position and earning capacity was very poor, while the size of the estate was very large.
The relationship between the applicant and his father was very troubled, but the applicant’s emotional suffering was caused by his father throughout his life.
The court increased the gift in the Will to the applicant from $500,000.00 to $1,000,000.00, taking into account all of the above circumstances.
The adult son of the deceased was left 85% of his father’s estate and the balance 15% to the deceased’s younger son. The Will excluded the two daughters and the eldest son, who were estranged from their father for 21 years before his death and following their father’s separation from their mother.
The two daughters challenged the Will.
The daughters were found to have moderate needs which were not recognised by the Will. Although the drafting of the Will suggested that the estrangement of the daughters from their father was caused by the daughters, the court ultimately found that the father and adult son bore part of the responsibility.
Like the case of Allsop above, the evidence that went before the court was very personal in that the relationships between the parents and the children were laid bare in evidence in court.
The estate was worth approximately $2.6M. The court awarded 15% or $390,000.00 to each daughter. That was the same amount that was given to the younger son. Therefore, the amount awarded to the daughters was effectively taken from the adult son’s share.
As you can tell from the cases above, every family situation is different and we take great care in understanding our clients’ full circumstances to ensure a Will is made to ensure the objectives of our clients are achieved, as well as attempting to minimise the risk of any claims or successful claims against an estate, which will only erode the value of the estate for all of the beneficiaries, due to the significant legal costs involved in the cases which are litigated.
We encourage all our clients to not only see us to have a Will done if they don’t have one already, or review their Wills every few years to ensure it is still suitable in case circumstances have changed.
About the Author
Darren Sekac has considerable experience in Estate Planning and all aspects of Estate Ligitation. Contact Darren for any enquiring regarding Estate Planning or Estate Claims on dsekac@macamiet.com.au or 0419 714 015.
