All jurisdictions in Australia provide statutory rights for certain eligible persons to contest the terms of a Will if they can show that they have been left without “adequate provision” by the willmaker.
These claims are commonly referred to as family provision claims.
In South Australia, an eligible person includes:
- a spouse, former spouse or domestic partner;
- a child of the deceased or a child of the deceased’s spouse or domestic partner if the child was being maintained or was entitled to be maintained by the deceased prior to his or her death;
- a grandchild of the deceased;
- a parent or sibling who can establish that they cared for or contributed to the maintenance of the deceased during his or her lifetime.
If a family provision claim is successful, the Court can order an adjustment to the terms of the Will in order to satisfy the claim.
When contesting a Will, a de facto partner must first establish the existence of the de facto relationship with the deceased, and then show that he or she has been left without adequate provision in all of the relevant circumstances. Claims are assessed based on a range of factors and the unique circumstances relevant to each case.
What is a de facto relationship?
It is generally expected that willmakers or testators have a moral duty to provide for the proper maintenance and support of their spouse or de facto partner. A de facto relationship exists where a couple of the same or opposite sex live together in a genuine domestic relationship although not legally married.
Factors considered in establishing whether a ‘genuine domestic relationship’ exists include the length of the relationship, the care and support of children, the nature and extent of a common residence, the existence of a sexual relationship, financial interdependence, property acquisition and ownership, mutual commitment to a shared life and the public perception of the relationship.
What must an applicant prove in a family provision claim?
An applicant must prove that, at the time of considering the application, he or she has been left without adequate provision for his or her proper maintenance, education and advancement in life. A claim may be made because the applicant was completely left out of the Will or that, in light of the applicant’s financial needs, the provision that was made for them in the Will is insufficient to support their needs.
The deceased’s moral obligation to provide for the applicant, the value of the estate and the competing financial needs of other entitled persons are all considerations taken into account by the Court.
Family provision claims often involve the contested interests between a de facto partner and the deceased’s child or children from a former relationship. Each and every case is different, however the typical matters that a Court considers in such claims include:
- the length of the de facto relationship;
- the respective financial and non-financial contributions of the applicant and the deceased to the estate assets;
- the personal circumstances of the applicant such as his or her education, employment, age, health and special needs;
- the financial position and financial needs of the applicant;
- the personal circumstances, financial position and financial needs of the deceased’s children or any other beneficiaries or applicants;
- whether there were joint assets that already transferred to the applicant after the deceased’s death;
- whether the applicant received any benefit from the deceased’s life insurance or superannuation payments.
Case study
Lawrence v Martin [2014] NSWSC 1506 considered a claim by a de facto partner who had been left out of the deceased’s Will. Although their relationship had lasted for 16 years, the deceased had not updated his Will since divorcing his former spouse in 1999. The Will left his entire estate to his former spouse, and in the event of her prior death then to his two sons of that marriage. The legal effect of the divorce was that the wife was precluded from benefiting under the Will. Consequently, his estate worth around $1.6 million, was left equally to his sons.
On the testator’s death, the applicant (the defacto spouse) received a life insurance benefit of $229,000 and the interest in their jointly-held family home was transferred into her sole name. The home was worth around $1.5 million with a mortgage of around $78,000.
The applicant claimed further provision of $660,000 from the estate and the Court took account of the following:
- that the applicant had already received a substantial life insurance benefit and the transfer of the family home into her name;
- that the applicant had made substantial financial contributions to the family home and assets of the deceased;
- that the applicant and the deceased were interdependent financially;
- that the relationship was genuine and long lasting with the applicant making substantial contributions towards the deceased’s welfare;
- that the applicant, aged 60, would likely cease employment over the ensuing years resulting in a substantial reduction in her income;
- although in reasonable health, the applicant suffered some physical limitations due to neck, back and shoulder issues;
- the intentions of the deceased which declared a desire to leave each of his sons a house;
- the financial position and needs of each son, one of whom suffered a bipolar condition making it difficult to sustain long-term employment, as well as other health issues.
In balancing the competing needs between the applicant and the sons and in consideration of all the circumstances, the Court awarded the applicant a sum of $350,000.
This case illustrates the factors unique to each claim that must be considered when balancing the competing needs of the applicant and other beneficiaries.
What if there is no Will?
When a person dies intestate (without leaving a Will), the estate is distributed according to a statutory formula prescribed by legislation in each State. The distribution follows the deceased person’s “next of kin” and the emphasis and priority is generally in favour of a spouse and minor children (if any). A ‘spouse’ includes a married or domestic partner. Accordingly, the non-existence of a Will does not prevent a de facto partner claiming further provision from an intestate estate.
Conclusion
A de facto partner may make a family provision claim if the proposed distribution under a Will or intestate estate does not make adequate provision for them. Strict time limits apply for bringing such claims and it is wise to obtain early legal advice.
Many family provision claims can be settled between the interested parties which can avoid costly Court proceedings.
To reduce the possibility of a family provision claim it is important to obtain appropriate legal advice when preparing your Will and to ensure that your Will is regularly reviewed.
If you or someone you know wants more information or needs help or advice, please contact us on (08) 8344 6422 or email [email protected].