Unfairly left out of a will?
In a society where people are now living longer and more likely to be part of blended families, Family Provision Application (FPA) claims are becoming increasingly common.
FPA Claims involve a person within a defined relationship to the deceased making an application to the court seeking a share or larger share of the deceased’s estate, on the basis that they failed to make “adequate provision” for the applicant’s “proper maintenance and support”.
In Queensland the only people eligible to make an FPA Claim are a spouse (including de-facto), a child or a dependant of the deceased.
The jurisdiction of the Queensland Courts to hear and determine an FPA Claim is found in section 41(1) of the Succession Act 1981 (Qld). The purpose of this section is to ensure that Will-makers provide for their families by their Wills rather than leaving them without the means to support themselves.
It is important to note that the court’s jurisdiction is limited to making such provision as is necessary for the proper maintenance and support of the applicant. The court is not entitled to re-write a Will in accordance with its own notions of fairness or justice.
In Queensland a person who wishes to make an FPA Claim must give notice of their intention to do so within 6 months after the death of the deceased person. An application must be commenced in court within 9 months of the deceased’s passing.
Deciding an FPA Claim
Just because a person is eligible to make a claim does not necessarily mean that they will succeed.
In determining an FPA Claim, the court looks at all the circumstances. The court must place itself in the position of the deceased person and reconsider what provision, if any, should have been made for the applicant.
The determination of an FPA Claim involves a 2 stage process.
First, the court must consider whether the applicant is eligible to apply and whether the deceased person has failed to make adequate provision for the proper maintenance and support of the applicant. The applicant must demonstrate that he or she is in need of a greater provision from the deceased person’s estate than what has been made. If the court concludes that adequate provision has been made for the applicant, then the application will be dismissed.
If the court is satisfied that adequate provision has not been made for the proper maintenance and support of the applicant, they proceed to the second stage, which involves the determination of what provision should be made.
Because every person is unique, every FPA Claim is also unique. Having said that, there is considerable guidance in case law on factors which are likely to be relevant, including:
• the size and nature of the deceased person’s estate;
• the applicant’s financial position, age, state of health and future prospects;
• the nature of the relationship between the applicant and deceased person;
• any co-operation and support given by the applicant to the deceased in the conduct of the deceased’s business and affairs;
• any care or support given by the applicant to the deceased in the deceased’s domestic life;
• any encouragement given to the applicant by the deceased to base his or her lifestyle on the understanding that he or she would inherit certain property;
• the relationships between the deceased person and others having a legitimate claim on the estate;
• the financial position, age, state of health, and future prospects of the beneficiaries named in the Will.
There is provision under the Succession Act for an otherwise eligible applicant to be denied an Application for Family Provision based on a concept known as disentitling conduct. The courts have held the following to be disentitling conduct:
• Abuse of the Testator by the Applicant;
• Fraud by the Applicant against the Testator;
• Recurrent drug or alcohol addiction on the part of the Applicant;
• Abandonment of the Testator on the part of the Applicant; and
• Any other such other reason as the Court deems relevant.
However, rather than denying provision from the estate, the courts have traditionally considered disentitling conduct as a grounds to reduce any such provision to an otherwise eligible applicant.
Because the Estate usually bears the costs of both parties in Estate litigation, this may mean a significant diminution of the Estate. The reality is that, it simply means less funds are available to share between the beneficiaries. For that reason, mediation and negotiation are required to attempt to resolve FPA Claims prior to the matter being heard and determined by the Court. However, this does not mean that the Estate will always bear the costs of both parties and the Court is empowered to make costs orders as it deems appropriate.
How to Avoid FPA Claims
The best way to avoid leaving your intended beneficiaries with lengthy and costly Estate litigation is to take pro-active steps now by developing an Estate Plan with an experienced Wills and Estates Solicitor.
It is also important that you review your Estate Plan every five (5) years or with each major life change (for example, the sale or purchase of property, marriage, divorce, the birth of children, retirement etc) to ensure that your Estate Plan remains current and accommodates your changes in circumstance.
Many FPA Claims arise because people fail to update their Wills (and either leave a child out completely or otherwise leave their Estate to their ex-spouse rather than their current one). Many more arise because people attempt to write their own Wills and fail to properly account for their assets or moral duties.
While there are no guarantees that there won’t be a later challenge to your Estate, being pro-active in your Estate Planning now will reduce the likelihood of a challenge and limit the exposure to your Executors and beneficiaries to costly litigation after you pass.