Competing family provision claims

Estate Pascale [2016] NSWSC 443

The Supreme Court of NSW has recently handed down a judgment where it was required to consider a large number of competing claims, even though the estate had limited resources.

3 family provision applications were lodged against the estate, and the Court was required to balance 5 competing claims to the estate’s resources. The net size of the estate was around $770,000.00.

The deceased in his last will left $10,000.00 to his second last partner who was his defacto for over 10 years. He left the balance of his estate equally between his minor child that he had with his second last defacto, and his last wife whom he married in 2013.

The deceased was survived by 4 children, 3 of whom were not named in the will. Only the minor child was left with any provision under the terms of the will.

All 3 family provision claims were brought within the 12 month time limit from the date of the deceased’s death. The eligibility of the persons making the applications was not also disputed.

The former defacto partner satisfied the Court that she was a natural object of testamentary recognition and that there were factors warranting the making of the application given the nature of the relationship she had with the deceased.

Under the provisions of the Succession Act, the children of the deceased were not required to prove there were factors warranting the making of their applications.

The judge summarised part of the legislation upon which he was empowered and required to base his judgment:

Sections 59(1)(c) and 59(2) both require the Court to make decisions based upon current circumstances. Section 59(1)(c) requires the Court to determine whether “adequate provision for the proper maintenance, education or advancement in life” of an applicant has not been made in the will of the deceased. Upon an assumption of a finding that “adequate provision” has not been made for an applicant, section 59(2) empowers the Court to make “such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life” of the applicant.

Section 60(2) contains a checklist of factors (including, for example, the existence, nature and duration of family relationships and the availability of resources) bearing upon, or likely to bear upon, decisions about the maintenance, education or advancement in life of an applicant.

It was raised in the evidence that one of the adult children making a claim was estranged from his father, and that he declined an opportunity to visit the deceased when he was dying in hospital. The judge did not find this to be disentitling conduct, and commented that it was rather “a sad, not uncommon, incident of a fractured family relationship.”

As the estate was relatively modest, and there were more claims upon it than could be satisfied completely, the judge commented that “At each point the Court needs to remain mindful of competing claims on the bounty of a deceased person, and the limitations on available resources, as well as other factors enumerated in section 60(2)”. He also stated that “In weighing the competing claims on the bounty of the deceased, it is not open to the Court to “rewrite” the deceased’s will.”

It is not uncommon for people to think that family provision claims re-write a deceased’s will. In reality though, and whilst orders can be made which affect how an estate will be administered and who may receive provision from it, the Court must resist the temptation to adjust the will beyond what is necessary to make adequate provision for an applicant.

The judge ultimately determined that each of the applicants had been left with inadequate provision. The second last partner was provided with a legacy of $100,000.00 and the 2 children of the deceased received legacies of $60,000.00 each. The additional legacies were ordered to be paid from the residue or balance of the estate.

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