The most common type of “challenge” to a Will is a ‘Family Provision application’ (also called a Testator’s Family Maintenance application).
Family Provision applications are made under Part IV of the Succession Act 1981 (Qld) (“the Act”). Section 41 of the Act sets out the relevant principles that a Court will take into account when deciding a Family Provision application.
(1) If any person (the “deceased person”) dies whether testate [with a Will] or intestate [without a Will] and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant.
(1A) However, the court shall not make an order in respect of a dependant unless it is satisfied, having regard to the extent to which the dependant was being maintained or supported by the deceased person before the deceased person’s death, the need of the dependant for the continuance of that maintenance or support and the circumstances of the case, that it is proper that some provision should be made for the dependant.
Who can bring a Family Provision Application?
Importantly, not just any person can bring an application for Family Provision. The only individuals who are entitled to bring Family Provision Applications are:
- spouses (which includes de facto spouses);
- children (which includes step-children); or
The term “dependent” is defined in the Act as a person who is “wholly or substantially maintained or supported by the deceased person” and who is also a parent of the deceased, parent of a child of the deceased, or a child under the age of 18 years.
However, just because a person is entitled to bring a Family Provision application, it does not necessarily follow that they will be successful in actually challenging a Will.
How do Courts decide Family Provision Applications?
Courts seek to apply the wording of the Act. In a nutshell, the applicant must demonstrate to the Court that “adequate provision” has not been made from the estate for their “proper maintenance and support”.
Concepts of “adequate provision” and “proper maintenance and support” are notoriously difficult to apply in real life. These concepts beg the questions: What provision is adequate and what maintenance and support is proper?
The concepts of “adequate provision” and “proper maintenance” are, essentially, relative. What is adequate or proper in one case may not be adequate or proper in another case. Accordingly, in deciding a Family Provision application, a court must take into account all the (competing) circumstances, including:
- The Applicant’s financial position;
- The size and nature of the deceased’s estate;
- The totality of the relationship between the applicant and the deceased;
- The relationship between the deceased and other persons who might have a claim against the estate (including beneficiaries); and
- The age, capacities, means of other potential beneficiaries.
In some other cases, Courts have considered whether or not the Deceased owed a “moral duty” to the applicant to have made adequate provision for proper maintenance and support.
Examples from recent Family Provision Application cases
The relevant facts and circumstances of Banks -v- Seemann QSC 202 follow:
the Respondent, Ms Seemann, was the Executor of her late mother’s estate.
- the Applicant, Mr Banks, was a son of deceased (and brother to the Respondent).
- The deceased’s estate was valued at about $1.7 million.
- Under the Will, the Applicant was to receive the sum of $200,000.00 and the Respondent was to receive the rest and residue (ie. about $1.5 million).
- The Applicant (together with his wife) had significant personal assets (including superannuation) totalling more than $2.6 million.
- Although the Court did not put a value on the Respondent’s personal wealth, it can be assumed that the Respondent was similarly wealthy, owning, amongst other things, property in New Farm, Mermaid Beach and Toowong.
Although there were a number of arguments put before the Court by the Respondent, one argument was that, given the extent of the Applicant’s wealth, he could not demonstrate that he was necessitous of any additional maintenance or support from the deceased’s estate.
Despite the Applicant not being in any obvious financial need, the court held that, whilst the applicant would not necessarily be ultimately successful at trial, he had successfully shown a “prima facie case for further and better provision for the deceased’s estate”. In the circumstances of the relatively significant estate of the deceased it was held by the Court that the Applicant was entitled to make the Family Provision Application.
[Note: This case dealt with a procedural point of whether, as a question of law, the Applicant was entitled to make a Family Provision application. The matter would then proceed to trial where the judge would, after considering all the facts and circumstances, make a decision as to whether further provision would be made to the Applicant from the deceased’s estate, and if so, how much.]
The decision in Banks v Seemann can be compared with the decision of Manly -v- The Public Trustee of Queensland & Anor QCA 198.
Some of the relevant facts and circumstances of the case follow:
A few years prior to the deceased’s death, the Applicant migrated to Australia to commence a relationship with the deceased.
- The deceased and the Applicant married.
- The deceased’s estate was very modest, comprising of the family home, some cash and incidental items of personal property (The estate was valued at about $500,000 at the date of death);
- After making some specific gifts of relatively insubstantial personal assets, the remainder of the deceased’s estate was divided equally between the deceased’s three sons and the applicant.
- The Applicant did not own any property of any substance and was “not well off”.
- The Respondents (i.e. the deceased’s three children), although none were especially wealthy, all owned their own homes.
Despite the Applicant being in somewhat necessitous circumstances, the Applicant was not successful in demonstrating that the provision made for her in the Will was, in all the circumstances, inadequate. Her application failed.
It is ordinarily the case that all parties to Family Provision applications, even an unsuccessful applicant, are entitled to have their costs paid from the Estate. It is, however, within the court’s power to refuse to make an order that the unsuccessful applicant’s costs are paid from the Estate. A court may even order the unsuccessful party pay the costs of the other parties.
The decision in Manly was a case where, although the Executor and beneficiaries were entitled to have their costs paid from the Estate, the unsuccessful applicant was prevented from having her costs paid from the Estate. The court was critical of the legal costs incurred in the matter ($180,000) and of the Applicant’s unreasonable refusal to accept an offer to settle from the other beneficiaries.
The Manly decision is a cautionary tale for people who are considering bringing a Family Provision application in matters involving modest estates. This decision also highlights the needs for parties to Family Provision applications to seriously consider the costs of litigation and to genuinely attempt to resolve matters by negotiation or mediation.
These two Supreme Court decisions illustrate that, in matters involving very modest estates, a disappointed beneficiary often has less prospect of successfully bringing a challenge to the Will even when he or she is of modest means. Conversely, where the estate is significant, even though the applicant appears to be relatively wealthy, they will not necessarily be precluded from making a Family Provision application.