In the course of estate planning, it is not uncommon for people to have family circumstances giving rise to a desire to gift assets unequally between adult children. This may be due to an estrangement, or because one child has provided significant care to a parent during their lifetime, or many other reasons. The question often arises – can the child I am leaving out, or leaving less, challenge my Will?
Significant changes were recently made to Part IV of the Administration and Probate Act 1958 (Vic) (Act) as a result of the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (Amending Act). Even though the final amendments were not as extensive as proposed, the amendment limited persons who could apply for a family provision order in respect of the estate of a deceased person.
The Amending Act is applicable only in cases where the deceased died on or after 1 January 2015.
Where an application is made by an adult child, who is over 25 years of age, the Court takes the following into account when deciding what portion of the estate the adult child can claim:
- Whether the claimant is an eligible person (an adult child is an eligible person)
- Capability of the person to provide for their own maintenance and support
- Will of the deceased person and their reasons for making the dispositions in the Will
- Intentions of the deceased to provide for the claimant (i.e. the testator's wishes)
- Moral duty of the deceased to provide for the claimant’s maintenance and support
- The distribution of the estate fails to adequately provide for the maintenance and support of the claimant
Since the amendments, there have been a few Court decisions dealing with the rights of adult children.
The decision of Victorian Supreme Court in Brimelow v Alampi [2016] VSC 135 was the first case where the amendments had been considered regarding disputed estates. This case indicated that the law does not aim at achieving a fair distribution of estate or achieve equality - rather it aims to ensure that an eligible person is adequately provided for by the deceased. Under the Amending Act, the Court must consider the terms of the Will, but more emphasis is given to the moral obligation of the testator to provide for the claimant’s proper maintenance and support.
In the case, the deceased was survived by her three adult children. Under her Will, the deceased appointed the defendant as the sole beneficiary and completely excluded her other children stating there was no meaningful relationship between them.
Both of the excluded children challenged the estate. While one of them settled at mediation before the trial, the other plaintiff continued to trial.
In determining the case, the court considered the following:
- The plaintiff was the daughter of the deceased and was therefore an eligible person
- The deceased had a moral duty to provide for the proper maintenance and support of the Plaintiff and failed to do so under her Will
- Language of the deceased’s Will
- Incapability of the plaintiff to provide adequately for her proper maintenance and support.
The Court decided in favour of the plaintiff and awarded the plaintiff a share in the deceased’s estate along with costs that were paid out of the estate after considering the moral duty of the deceased along with the financial condition of the plaintiff and her incapability to provide for herself.
In the 2019 case of Firth v Reeves [2019] VSC 357, the deceased had two daughters. Her Will provided that two thirds of her Estate was to pass to one of the daughters, and the other one-third of the Estate to the other daughter. The Court considered the circumstances of each of the daughters and decided that the division of the estate as outlined in the Will was just, and the deceased had made adequate provision.
This decision confirmed the principle that the provisions of a Will do not need to be equal between adult children but the decision will depend on the circumstances of the relationship and the beneficiaries.
It is also relevant to consider cases interstate, such as the New South Wales cases of Piercy v Douras [2019] NSWSC 1013 and Wengdal v Rawnsley [2019] NSWSC 926.
Piercy v Douras involved an application made by an estranged adult son who had been excluded from the Will of the deceased. In this case the entire estate had been given to the widow of the deceased. The court considered the diminishing value of the estate along with the low prospects of future of the widow against the son being an able bodied and healthy individual. The Court ordered in favour of the widow however did not impose legal costs on the son even though his claim was unsuccessful.
Wengdal v Rawnsley involved a dispute over a small estate. The Court considered the size of the estate and the financial condition of the parties. The Court considered the size of the Plaintiff’s claim as a proportion of the total estate as she held assets that far exceeded the total value of the estate. The court held that ‘in small estates particularly, the court should be careful not to foster the proposition that obstinacy and unreasonableness will not result in an order for costs.’ It was ordered that the plaintiff’s claim be dismissed and the plaintiff pay the defendant’s costs on the ordinary basis since the plaintiff had persisted with her claim despite knowing the financial circumstances of the Defendant and the modest value of the estate.
In deciding applications made by adult children, the Court considers fairness and equality of the division made by the deceased along with the financial and physical conditions of the parties at the time of making of the application. Further, the Court has also noted that equality of treatment is not an essential element of testamentary duty. The division of the estate should be fair in the circumstances, but is not required to be equal.
