A family provision claim may be made by an eligible person seeking a share or greater share from an estate if it can be shown that the deceased failed to make adequate provision for the applicant’s proper maintenance, education and advancement in life.
Generally, an eligible person includes a spouse, former spouse, de facto partner or child of the deceased or certain individuals in a close personal relationship with the deceased or who were dependent on the deceased at the time of his or her death.
Occasionally, an executor may need to defend a family provision claim made against the estate. In such cases, the executor has a primary duty to uphold the terms of the Will and to preserve estate assets. However, an executor may need to consider a justified claim that would otherwise be likely to succeed in Court and negotiate a settlement to avoid excessive legal fees which would usually be payable by the estate if the claim was successful.
Challenging the validity of a Will refers to claims made that a Will is void for lack of formality (not correctly signed / witnessed), lack of mental capacity (the testator was not of sound mind when the Will was made) or because the Will was made by the testator under duress or fraudulent circumstances.
Persons eligible to challenge the validity of a Will include the beneficiaries named in the current or a previous Will and those who would be entitled to the estate if the deceased died intestate (without a Will).
Varying the terms of a Will after a person dies may be a consequence of a family provision claim settlement or agreement between the beneficiaries of the estate. Provided all beneficiaries agree, variations to a Will can be legally documented by the parties entering a deed of variation or deed of family arrangement.
An agreement to vary a Will need not arise in adversarial circumstances. It may appear obvious to all beneficiaries that the Will does not reflect what the testator intended had he or she been aware of the situation or a significant change in circumstances of a certain family member.
A further reason for varying the terms of a Will is to enable a beneficiary to buy-out another beneficiary’s share in real estate.
Generally, parties to a deed of variation should obtain independent advice so they are aware of the legal and financial consequences of the proposed variation. Financial implications include stamp duty and taxation issues such as capital gains tax and any effects on Centrelink payments.
Estate disputes can be complex and family provision claims must be made within strict timeframes.