ESTATE PLANNING – Factors impacting the Risk of a Family Provision Application

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Is leaving a large testamentary gifts to a charity more like to result in a successful Family Provision challenge?

There seems to be a prevailing belief that in the case of large estates, where the bulk of an estate is left to charity as opposed to children or other eligible applicants, that the Court takes a generous approach to applicants (for example, your children) when determining the outcome of a Family Provision Application (“FPA”).

This is not necessarily the case. The mere fact that the whole or the majority of an estate was left to charity is, in and of itself, of little consequence, and the Court is not necessarily more generous to applicants in these cases.[1] There is evidence of applicants having received the whole of the estate, the majority, more than half, or a small share. In some cases, the applicant has received nothing. This suggests that it is still the strength of an individual’s claim that determines the nature of the Order made.

If I have provided significant support to someone during my lifetime, is a successful Family Provision application less likely?

In determining the outcome of a FPA, the Court is not limited in any way by the provision made for the applicant by the deceased during their lifetime. This means that an eligible Family Provision applicant will be in no way restricted from making a FPA despite receiving significant provision from you during your lifetime. Having said this, benefits given to a Family Provision applicant during a deceased’s lifetime are taken into account in determining what adequate provision for that applicant is.

Provision made during a deceased’s lifetime will simply be one of many considerations taken into account when assessing the merits of any individual claim in all the circumstances.

If my family enters into a Deed of Family Agreement, will this prevent a Family Provision applicant from bringing a Family Provision Application against by estate?

In certain (likely limited) circumstances, a family may agree to enter into a Deed of Family Agreement setting out their agreement to the terms of a Will.  This may go a long way to practically ‘diffusing’ any Family Provision claim, where each of the children have considered, taken advice and signed off on an Estate Plan.

However, it has long been settled that the jurisdiction of the court cannot be ousted by private agreement in the case of FPAs,[2] on the grounds of public policy.   Although this may be a good way to manage family expectations and mitigating the risk of a FPA where family members are able and inclined to agree, it cannot guarantee or ensure that a FPA will not be brought by a family member.

The issue has come before the Court many times in the years since this principle was first espoused (generally the private agreement takes the form of a pre-nuptial or post-nuptial financial agreement), and this has been upheld by the Courts in recent times on the same public policy basis.

Whilst the majority of these cases have concerned spouses of the deceased, the principles of public policy that these precedents seek to protect are equally applicable to children of the deceased, and can be expected to be applied in the same way.

[1] John K De Groot & Bruce W Nickel (2007) Family Provision in Australia (Third Edition), Lexis Nexis Butterworths, Chatswood.

[2] Lieberman v Morris (1944) 69 CLR 69.