Family Provision Application Cases Involving Large Estates

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The basic principles informing the Court’s jurisdiction to decide Family Provision Applications are the same notwithstanding the size of the estate – the Will of a testator can only be affected to the extent that it is necessary to provide adequate and proper maintenance for the applicant.

However, where there is a large estate, it is also acknowledged that competition between claimants and beneficiaries under the Will is reduced or eliminated. There may also exist a scope for a more liberal assessment of the moral duty owed by the testator, based on, for example, the ‘station of life’ of the applicant and the expectations to which that had given rise, including how the applicant might reasonably be expected to live in the future due to their association with the deceased.[1]

It has been said, in the context of a parent’s obligation to provide for their children, that in a large estate, need of the applicant may extend beyond the ‘bread and butter of life’ to include ‘a little of the cheese or ham that a wise or just parent would appreciate should be provided if circumstances permit’.[2]

If the size of the estate permits, and no serious prejudice to the rights of other beneficiaries will ensue, the courts may order provision beyond the immediate and likely future needs of the applicant.[3]  See our website article, “Mead v Lemon – Daughter awarded $25 million dollars in a Family Provision Application” by way of an example.  This case involved an estate estimated to be valued at $1 billion.

 

What is a large estate?

What the Court refers to as a ‘large estate’ is considered to be one of approximately $1.5 million or more.  Most Family Provision Application cases are in the range of $3-15 million, with exceptions including one of approximately $39 million.  A lot of these cases have been decided in New South Wales, however it has been acknowledged that this is largely by coincidence, and there is no reason that the approach taken in these matters would not be followed in other States.

Until about 1997, orders made in large estates were quite small in relation to the size of the estate (usually approximately $100,000 – $300,000). However, in the last several years, there have been a number of cases concerning what are considered to be ‘large estates’ by the Courts where far more substantial orders have been made.

If you are planning the succession of your estate and/or making a new Will, you may be asking – What are the risks of a Family Provision Application being brought against my estate?

If you are a family member or dependent who has been left out of someone’s Will, you may be asking – What are the prospects of me bringing a successful Family Provision Application?

By and large, the recent cases involving ‘large estates’ have indicated an expansive attitude by the Courts. Generous provision is now being made by the Court in the form of cash legacies, interests in property (both real and personal, eg. boats), and in less frequent cases, shares in proprietary limited companies.

Commentators note that making comparisons (either by amount of by a percentage of the overall estate) is often unhelpful, and does not produce accurate estimates of potential additional provision that the Court may order.[4]

The cases are not determinative of how the Court will act in every situation.  If you are in need of advice regarding the risk of a Family Provision Application being brought in the event you pass away, we recommend that you take considered legal advice in relation to your specific individual circumstances.

[1] Vigolo v Bostin, [114].

[2] Blore v Lang, 135.

[3] G E Dal Pont & K F Mackie (2013) Law Of Succession, LexisNexis Butterworths, Chatswood, p.625

[4] John K De Groot & Bruce W Nickel (2013) Family Provision in Australia (Fourth Edition), LexisNexis Butterworths, Chatswood