ESTATE PLANNING – What is ‘Adequate’ and ‘Proper’ Provision for Family?

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When planning the succession of your estate upon your passing away, it is important to consider the risk of possible Family Provision Claims which may arise, and may result in Family Provision Applications being brought to change your testamentary dispositions.

In determining the outcome of Family Provision Applications, the Court applies a two-limb test, the first of which is to consider whether adequate and proper provision has, or has not, been made for the applicant.

  1. The words ‘adequate’ and ‘proper’ are used in the legislation of all jurisdictions – it is therefore appropriate to consider the way these words have been interpreted by the Courts Australia-wide, for an indication of how these words may be interpreted and applied in any State or Territory.
  1. The classic interpretation of these terms is found in the 1938 decision of Bosch v Perpetual Trustee Co Ltd:

‘The use of the word ‘proper’ in this connection is of considerable importance. It connotes something different from the word ‘adequate’. A small sum may be sufficient for the ‘adequate’ maintenance of a child, for instance, but, having regard to the child’s station in life and the fortune of his father, it may be wholly insufficient for his ‘proper’ maintenance.

A father with a large family and a small fortune can often only afford to leave each of his children a sum insufficient for his ‘adequate’ maintenance. Nevertheless, such a sum cannot be described as not providing for his ‘proper’ maintenance, taking into account ‘all the circumstances of the case’.[1]

  1. The High Court later held that the words ‘adequate’ and ‘proper’ must be given their value – proper maintenance and support must be relative to the applicant’s age, gender, condition, mode of life and situation generally.[2] What is adequate must be relative to the applicant’s needs, but also to his or her own capacity for meeting them.
  1. The phrase ‘advancement in life’ likewise has a broad meaning and application. Past cases have held it wide enough to provide additional provision to applications for, for example, the provision of capital for future business opportunities,[3] or the potential needs of an applicant nearing retirement age.[4] In the case of particularly large estates, the Court’s amenability to providing for these additional contingencies is much more likely.
  1. The Court’s approach Australia-wide is to apply these terms in a relative sense, with all of the circumstances of the case in mind – particularly in assessing the ‘need’ of the applicant.
  1. For more information in relation to the Court’s assessment of the need of a Family Provision applicant, see our article entitled, “ESTATE PLANNING – HOW IS THE NEED OF A FAMILY PROVISION APPLICANT ASSESSED? (LARGE ESTATES)”.
  1. The word ‘proper’ is not intended to give the Court power to essentially re-write the will of the deceased in accordance with its own ideas of justice or fairness.[5] In each case, the Court does not have the statutory mandate to do anything other than correct the deceased’s failure to make adequate provision for the proper maintenance of the applicant.[6] It is simply intended to require that the adequacy of the provision that has been made to the applicant to be determined by reference to all relevant circumstances, including the size of the estate.[7]

Have a query regarding adequate and proper provision for family?

Contact our Business Development Team on (07) 3252 0011 and make an appointment with one of our Estate Litigation lawyers today. Call (07) 3252 0011.

1] [1938] AC 463, 476.

[2] Scales (1962) 107 CLR 9 at 19.

[3] McCosker v McCosker

[4] Smilek v Public Trustee

[5] Bowyer v Wood [2007] SASC 327.

[6] G E Dal Pont & K F Mackie (2013) Law Of Succession, LexisNexis Butterworths, Chatswood, p. 613.

[7] Bowyer v Wood [2007] SASC 327 at [41], reference to Worladge v Doddridge (1957) 97 CLR 1 at 16.