01/03/2012

Trevor tells you he has made a Will leaving everything to his wife and their young teenage son.  This is his second marriage; he has two adult children from his first marriage and his former wife has not remarried.

Can Trevor's will be challenged by his former wife?  And what is the time limit on such applications?

A person making a will generally has testamentary freedom to leave their assets to whomever they want. Unfortunately this is only partly true and the court may change the provisions of a person's will in certain circumstances.

Under various statutes throughout Australia potentially disappointed former spouses may be able to bring a so-called 'family provision' claim against the estate. Such applications have potential to be successful if the applicant is eligible to apply and the person has not been, in the court's view, adequately provided for under the distribution of the estate.

Who is a 'former spouse'?

There are subtle differences between the States in the language used to define who is eligible as a "former spouse" for provision under the deceased’s estate.

In Qld and SA, the person had to have been divorced from the deceased to be eligible to apply, while Tasmanian legislation specifies the person's marriage to the deceased must have been dissolved or annulled.

NSW legislation specifies that a former wife or husband may apply, while WA and NT permits former spouses or de facto partners to apply for benefits under the estate.

The ACT legislation focuses on partners who were domestic partners of the deceased at any time and were either spouses or civil partners at any time, domestic partners continuously for two or more years at any time, or partners who are parents of a child of the deceased.

The Victorian legislation is different to all of these in that the court has the power to order provision in favour of any person for whom the deceased had "responsibility" to make provision and to whom proper maintenance and support had not been provided.

Is there a 'maintenance' requirement?

There is greater uniformity among the States on the requirement that former spouses receive, or be entitled to receive, maintenance from the deceased at the date of the deceased’s death in order to be eligible to make a claim under the estate.

This requirement for maintenance from the deceased at the time of their death applies in QLD, WA, TAS, VIC and NT. In addition to this maintenance provision, in QLD there is also a requirement that the former spouse has not remarried.

While the maintenance requirement is not strictly placed on the eligibility of former spouses in NSW, SA and ACT, in these States the Court considers this factor in their determination and has to be satisfied of a variety of matters concerning dependence between the parties, whether there was a genuine domestic partnership and need of the persons for entitlement under the estate. 

Hence, maintenance and dependency on the deceased immediately before his or her death, whether it was financial, material or emotional dependence, is a key factor in the success of any claim.

What is meant by 'proper and adequate provision'?

Current legislation describing adequate provision varies from state to state. 

The legislation in QLD, TAS and VIC refers to 'proper maintenance and support'. 

In NSW, SA, NT and ACT, the legislators have used the term 'proper maintenance, education and advancement in life' while WA legislation has the term 'proper maintenance, support, education or advancement in life'. 

Regardless of these apparent differences, the courts aim to be uniform in their approach to what is 'proper' under the circumstances of each case, including the character and conduct of the applicant as well as the financial means and needs of the applicant relative to the size of the estate.

Time for commencing proceedings

An application for provision must be made within the time specified in each State's Act. The court can extend or reduce the period if it considers it necessary to do so after hearing from the affected parties.

How to limit such claims

Where the will maker is determined to exclude a beneficiary, the use of Statutory Declarations by the deceased before their death can be useful. Such statements need to be carefully prepared, expressed rationally and not be exaggerated or inaccurate. Generally if the statement amounts to an emotional outpouring it can have the opposite effect. 

It is effectively used as evidence by the will maker as to why they believe their former spouse should not receive part of their estate. It will be considered by the Court along with all the other evidence.

Another way to limit family provision claims is to ensure that an agreement to release rights under both parties’ estates has been made between the former spouses as part of their separation or divorce arrangements.

Legislation in NSW permits potentially eligible family provision applicants (including former spouses) to 'contract out' of a claim on each other’s estate in a Deed of Release. This may be done in the lifetime of the person for whole or part of the estate, but the NSW Supreme Court must in all cases determine that it is fair and prudent for both parties to do so and approve the release. 

In other States, a signed Deed of Release can be a useful addition to settlement agreements and orders between separating parties to provide intention of the parties to the Deed at a particular time should one of them apply for provision out of the deceased party's estate. Again such a Deed would be considered as part of the total evidence put forward by both sides.

To return to Trevor's situation, his former wife would likely be eligible to make a claim for family provision. She has some chance of success if Trevor was still making a financial contribution to her welfare. However, in NSW she would be less likely to succeed if property division arrangements between them included an agreement to release their rights under the estate, and the NSW Supreme Court had approved that release agreement.

If you have any questions in relation to this article, please contact TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 8296 6222.