Wills & Estates

How do I Protect my Estate from a Family Provision Claim?

Estate disputes are surprisingly common in Australia. Laws across different jurisdictions allow eligible individuals to challenge a deceased’s Will if they believe they have not been adequately provided for. In such cases, a successful claim might result in the terms of your Will being adjusted in favour of the claimant. However, there are steps you can take to help protect your estate from a family provision claim so that your final wishes are respected.

What is a Family Provision Claim and Who Can Make One?

A family provision claim (or testator’s family maintenance claim) is a legal application made by an eligible person seeking a share, or larger share, of a deceased person’s estate. Essentially, the claimant argues that the deceased failed to make adequate provision in the Will for their proper maintenance and support.

The eligibility criteria to make a family provision claim varies across Australia, so it is important to consider the legislation relevant to your jurisdiction. Generally, those eligible to make a claim are close family members such as a spouse, de facto partner and biological or adopted children. Other individuals such as stepchildren, former spouses, and certain family members who were financially dependent on the deceased (in specified circumstances), may also be eligible to claim in some jurisdictions.

Reasons Estate Disputes Arise

To minimise potential claims against your estate, it is helpful to consider why some disputes arise in the first place.

Family dynamics play out in different ways, particularly when a loved one dies, and the emotional burden of the loss can complicate already difficult relationships. Conflict between family members, especially in blended families or when there is an estranged relationship, can lead to challenges and disputes over the deceased’s intentions.

Family provision claims can arise when individuals believe that the distribution of assets is fundamentally unfair. For example, a child may have provided significant care during a parent’s final years while other siblings conducted their lives with little interruption. The ‘carer’ may have incurred personal and financial expenses or missed opportunities due to these commitments, and the Will may not take account of this.

Some Wills are out of date and do not reflect changes in the deceased’s circumstances, such as marriage, divorce, or new family members. This can create confusion and disputes regarding the deceased’s wishes. Similarly, vague or ambiguous terms in a Will can cause disagreement or uncertainty among beneficiaries.

Steps to Help Minimise Family Provision Claims

Prepare an Effective Will

Possibly the most important safeguard against a family provision claim is to prepare an effective Will. A Will that clearly outlines your intentions for the distribution of your assets leaves little room for misinterpretation of your testamentary wishes. Your Will should be carefully drafted, taking account of your financial and personal circumstances, family dynamics and any potential sources of conflict.

Consider Potential Claimants

While you are technically free to distribute your assets as you wish, it is wise to acknowledge the potential claims of eligible individuals. Providing some level of provision, even if it is less than they might expect, could demonstrate that you considered their needs and could potentially deter them from making a claim.

Review your Will Regularly

As your life circumstances change, it is important to review and update your Will to reflect this. When you experience significant life events such as marriage, divorce, the birth of a child, or the acquisition of substantial assets, it is a good time to review your Will.

Check your Superannuation

Benefits held in your superannuation fund generally do not form part of your estate for distribution under your Will. Rather, the trustee of your super fund decides how to direct the funds, unless you have a current binding death benefit nomination in place. You should regularly check your superannuation details to ensure you have nominated your desired beneficiaries and completed a binding death benefit nomination. Getting financial advice on the tax implications for your proposed beneficiaries is also a good idea.

Check Property Ownership

How co-owners hold their respective interests in property is an important consideration in asset protection and estate planning. Holding property as joint tenants means the interests are held as a whole and cannot be separately apportioned. Joint tenancy is subject to the rules of survivorship, meaning that if a co-owner dies, the surviving co-owner/s is automatically entitled to the deceased’s share in the property. Conversely, property held as tenants in common can specify the individual shares held between each owner which need not be equal. Unlike a joint tenant, a tenant in common may transfer, sell or leave their share in the property to a beneficiary in a Will.

Trusts

A trust is a separate legal structure that holds your assets. There are different types of trusts used to achieve different outcomes and trusts can offer benefits such as preserving/protecting assets, providing for minor children or vulnerable individuals and tax planning. Because of the complicated legal, financial and tax implications of trusts, it is important to seek professional advice when setting one up.

Communicate with your Family

Open and honest communication with your family about your estate plan, where appropriate, can help manage expectations and potentially reduce the likelihood of future disputes. Explaining your decisions and reasoning can help your loved ones understand and accept your wishes.

Conclusion

Failing to address a potential family provision claim can leave your estate vulnerable to costly and time-consuming legal disputes. It may be impossible to guarantee that a family provision claim will not be made against your estate, but there are proactive steps you can take to minimise potential claims. Seeking professional advice tailored to your circumstances can help safeguard your legacy and ensure your final wishes are honoured.

This information is general only and we strongly recommend seeking assistance from a qualified professional when preparing your Will and planning your estate. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Do you need a lawyer to make a Will?

While it is possible to create a Will without a lawyer by using online resources or DIY kits, it is important to consider the potential drawbacks of this approach. A Will is a critical legal document, and errors or omissions can have significant consequences for your loved ones.

Why you need a valid Will

A valid Will ensures your assets are distributed according to your wishes and appoints a trusted executor to manage your affairs when you die. Without a Will, your family may face delays, increased costs, and emotional distress.

With a valid Will your executor can apply for probate (if required) and administer your estate according to the provisions contained in your Will.

Without a valid Will, the distribution of your assets and finalisation of your affairs will likely be delayed. Your family may need to apply to the court for letters of administration and face increased legal and court costs. Your estate will be administered according to a statutory formula which may not take into account your real wishes.

The benefits of using a lawyer to prepare your Will

Family dynamics and personal and financial circumstances are all important considerations when preparing a Will. There is no one-size-fits-all approach, so a generic form or template may not be appropriate for all situations. Before going down the DIY Will path, here’s why seeking legal advice is advisable:

Ensuring your Will is effective and valid

For a Will to be valid, certain legal formalities must be met. If the Will is not correctly signed or witnessed, there is a risk that it may be invalid or contested after you die.

Writing on your Will after it is made, stapling documents to it, or making any changes are all things that can raise issues or invalidate the Will and render it partially or completely ineffective. Lawyers are well aware of this.

A Will that does not effectively deal with all your assets or has ambiguous language can open the doorway to all sorts of uncertainties and disputes.

Certified copies and safe storage

Most lawyers will store your original Will securely, free of charge, and provide certified copies, safeguarding against loss or damage.

Even if you decide to keep your original Will, your lawyer will keep records and copies of the Will which can be useful if you subsequently lose the original or your family cannot find it after you die. In such cases, your family may be able to request the court to look at the copy of the Will and allow the wishes in that Will to stand.

Considering your unique circumstances

Family dynamics and financial situations can evolve so addressing your present and future needs within your family is essential. A lawyer can consider your personal circumstances, family structure and financial position to prepare a Will that effectively sets out your testamentary wishes.

Blended families often have unique estate planning needs. When creating your Will, you may need to consider how you wish to provide for children from previous relationships, and how your current partner may want to provide for their children.

If you have minor children or vulnerable beneficiaries, they might need special consideration. By openly discussing your wishes and objectives with your lawyer, they can help you craft a Will that reflects your intentions and minimises potential conflicts. This includes exploring options like staggered inheritances and testamentary trusts.

Dealing with business interests

Owning a business adds complexity to making a Will and planning your estate. You will need to ensure that your business interests are adequately dealt with, whether you wish to hand the business down after you die or want it sold or dissolved. An experienced estate planning lawyer can help with a business succession plan that meets your needs.

Conclusion

To recap, the key benefits of engaging a lawyer to help with your Will include:

• Ensuring your Will is valid: Lawyers are trained to write valid Wills that meet all the legal formalities, minimising the risk of it being contested.
• Addressing complexities: A lawyer can help navigate complex issues such as blended families, vulnerable beneficiaries and business ownership. They can advise on testamentary trusts and business succession planning.
• Minimising disputes: By considering your unique circumstances and family dynamics, a lawyer can help prepare a Will that clearly outlines your wishes, reducing the potential for disputes among beneficiaries.
• Expert advice: Lawyers can provide comprehensive tailored advice that also considers other estate planning issues like trusts, powers of attorney and enduring guardianship.

A well-drafted Will ensures your assets are distributed fairly and according to your wishes, bringing peace of mind for you and your loved ones.

This is general information only and you should obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, please contact us on (08) 8155 5322 or email [email protected].

Deceased Estates – What Happens When Executors Don’t Agree

When someone dies, their assets are usually distributed according to their will. The person responsible for managing and distributing these assets is the “executor” of the deceased estate. In some cases, a will appoints more than one person to act as executor, and these individuals normally need to work cooperatively to execute the duties of the role.

The importance of estate planning before capacity becomes an issue

We should all plan for our future. Certainly, we should all have a current will, especially those of us who need to make special arrangements for the care of children or pets. Many of us would also benefit from making a formal arrangement to account for a time when we could find ourselves unable to make our own decisions. These arrangements have different names according to where you live in Australia, but they are alike in that they give authority to someone we trust to make decisions – whether financial or personal – in our best interests.