Estate disputes occur surprisingly often in Australia Laws across jurisdictions allow eligible individuals to challenge a deceased’s Will if they believe they have not received adequate provision. A successful claim might adjust the Will in favour of the claimant. You can take steps to protect your estate from a family provision claim and ensure 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 by an eligible person seeking a share, or larger share, of a deceased person’s estate. The claimant argues that the deceased did not provide adequately for their proper maintenance and support.
Eligibility criteria vary across Australia. Generally, close family member; such as spouses, de facto partners, and biological or adopted children; can make a claim. In some cases, stepchildren, former spouses, and financially dependent family members may also be eligible.
Reasons Estate Disputes Arise
Understanding why disputes arise helps minimise potential claims against your estate.
Family dynamics can complicate relationships after a loved one dies. Emotional stress often worsens existing conflicts. Disputes frequently occur in blended families or estranged relationships, leading to disagreements over the deceased’s intentions.
Family provision claims arise when individuals consider asset distribution unfair. For example, a child who provided significant care during a parent’s final years might feel shortchanged if siblings lived without interruption. The carer may have incurred personal and financial costs, or missed opportunities, which the Will may not acknowledge.
Some Wills are outdated and fail to reflect changes such as marriage, divorce, or new family members. Vague or unclear terms in a Will also create confusion or disagreement among beneficiaries.
Steps to Help Minimise Family Provision Claims
Prepare an Effective Will
Preparing a clear, effective Will is the most important safeguard against a family provision claim. A well-drafted Will specifies your intentions for asset distribution and reduces misinterpretation. Consider your financial and personal circumstances, family dynamics, and potential sources of conflict.
Consider Potential Claimants
Although you can distribute your assets as you wish, acknowledge potential claims from eligible individuals. Providing some provision, even if less than they might expect, shows you considered their needs and may deter claims.
Review Your Will Regularly
Review and update your Will when life circumstances change. Major events, such as marriage, divorce, the birth of a child, or acquiring substantial assets, are good times to review your Will.
Check Your Superannuation
Superannuation benefits usually do not form part of your estate. The super fund trustee decides how to distribute the funds unless you have a binding death benefit nomination. Regularly check your super to confirm your desired beneficiaries and binding nominations. Financial advice on tax implications for beneficiaries is also recommended.
Check Property Ownership
Consider how co-owners hold property when planning your estate. Joint tenants hold interests as a whole. Survivorship rules apply: if a co-owner dies, the survivor automatically receives the deceased’s share. Tenants in common can specify individual shares that do not need to be equal. They may transfer, sell, or leave their share to a beneficiary in a Will.
Use Trusts
Trusts are separate legal structures that hold your assets. Different trusts achieve different goals, such as preserving assets, providing for minors or vulnerable individuals, and tax planning. Seek professional advice before setting up a trust due to legal, financial, and tax implications.
Communicate with Your Family
Open and honest communication about your estate plan can help manage expectations and reduce disputes. Explaining your decisions helps family members understand and accept your wishes.
Conclusion
Failing to address potential family provision claims can leave your estate vulnerable to costly legal disputes. You cannot guarantee a claim will not occur, but proactive steps can reduce the risk. Seeking professional advice tailored to your circumstances helps safeguard your legacy and ensures your final wishes are honoured.
This information is general only. Obtain professional advice relevant to your circumstances. For more information or help, call 02 6621 2481 or email [email protected].