31/03/2014

Here are some simple examples of claims against an estate and some of the important factors to consider:

 

Case 1

The facts

Sheila’s only real asset when she died was her superannuation. The death benefit from the fund totalled $65,000.00. The fund told Sheila’s domestic partner of 15 years that the trustee of the fund intended to pay the whole death benefit to Sheila’s two adult daughters.

The law

Sheila’s domestic partner almost certainly meets the definition of a de facto spouse and as such is an eligible recipient of Sheila’s superannuation death benefit.  The trustee of the fund has to exercise their discretion carefully in deciding how Sheila’s death benefit should be distributed.  It would have been better had Sheila prepared a binding death benefit nomination which could have avoided the uncertainty and family anguish.  Depending on the de facto spouse’s financial position they would likely be able to negotiate with the trustee of the fund to receive a material part of the death benefit.

 

Case 2

The facts

Jonathon was left a share of his late grandmother’s estate in her Will. Grandma’s executors failed to give Jonathon his complete entitlement under the terms of the Will. Instead, they gave him a small amount they thought was appropriate for him.

The law

Upon the death of a testator the beneficiaries mentioned in the Will have an equitable interest in their inheritance.  The executor holds the estate on trust for those beneficiaries as set out in the Will.  The executors breach that trust by giving Jonathon only some of the amount he was given by Grandma.  Jonathon can sue to enforce his equitable interest.  The executors could be personally liable for their breach of trust.

 

Case 3

The facts

Jack and Jill were excluded from their deceased father’s Will. Father was a domineering person who physically and emotionally abused them. Jack and Jill both suffer anxiety and depression as a result of the treatment they received from Father. Both are in financial need.

The law

Jack and Jill are eligible to challenge their Father’s estate because they are his children.  They would claim against the estate by asserting their relationship and showing their financial need.  Family provision laws are based on the principal that the State has an interest in ensuring that family members are looked after by their deceased close relatives and do not become an unnecessary burden on the State.

 

Case 4

The facts

Charles left his entire estate to his second wife, Soo-lin. When Soo-lin died a few years later, she left the whole of her estate to her two biological children from a previous marriage, Ro-lin and Tumb-lin.  Charles two children from his first marriage, Bob and Dylan, were excluded from their father’s estate. Soo-lin’s main asset was a house that had been purchased by her and Charles. This house was purchased using the proceeds of sale of a house that Charles had inherited from his mother, Elizabeth.

The law

The time limit to bring an action against an estate under family provisions legislation is normally 1 year after the death of the deceased.  Bob and Dylan could challenge their father’s estate if they were not outside that period.  Even if they were outside that period they could apply to the court for permission to challenge but would have to show good reason for the delay.  Bob and Dylan may not be able to bring a claim against Soo-lin’s estate in their capacity as step-children of Soo-lin because step-children as such are not within the definition of ‘child’ in the uniform succession legislation. If they had been financially dependent on and living with Soo-lin at any time they would be eligible to claim on her estate.

 

Case 5

The facts

Victor had been ill for a long time.  His wife died years ago and eventually he married his nurse.  About a month later his health deteriorated seriously. Specifically, he was partially paralysed and had difficulty communicating and speaking.

When Victor finally died five months later his children were shocked to discover that he had signed a new Will only one month before his death. His old Will left the bulk of his estate to his children whereas his new Will left the estate to his new wife of only six months and only a small amount to his children.

The law

Victor’s old Will ceased to have any legal effect following his marriage.  Wills are automatically revoked by later marriage.  Victor’s children have two alternatives in challenging his estate.  They can claim part of his estate on the basis of the family provisions legislation and or they can challenge the Will by questioning whether Victor was legally competent to make a new Will at the time he did. There is no clear test of legal competence and it would be up to his children to prove that at the time he made the Will he did not understand the nature and effect of what he was doing.  If they were successful it would leave Victor intestate (his earlier Will was revoked by his later marriage) and his estate would be distributed according to the rules of intestacy.  Even in intestacy a family provision claim can be made by an eligible person on the estate.

If you believe you have a claim against an estate or want to prepare your testamentary documents to minimise the chances of such a claim please call us at TOWNSENDS BUSINESS & CORPORATE LAWYERS on (02) 829 66 222.