Can I Leave a Child out of My Will?
What does it mean to disinherit a child?
When drafting a will, circumstances may arise where you feel you want to disinherit one or more of your adult children from your will. This means the child or children you wish to leave out would not be entitled to any inheritance under the terms of your will.
However, it’s also important to note that just because you disinherit one or more children from your will, does not mean they won’t be able to make a claim on your estate after you pass away. There is a risk that a disinherited child may have a legal claim to the assets under the laws of the relevant state and territory, and may end up receiving an inheritance (even if this is against your wishes) if the court finds in their favour.
This article provides an overview of the implications of excluding or reducing a child’s share, and what steps to take to reduce the risk of a disinherited child making a claim against the estate.
Reasons People Choose To Exclude A Child From the Will
While it is usually common for children to receive an inheritance from their parents, this is not always the case.
A parent may choose to disinherit one or more children for a number of reasons, the most common being:
- Estrangement. Where there has been a long estrangement, the parent may feel the estranged child should receive a smaller share of the estate than other children. Though genuine attempts to repair the relationship by the child may operate in the child’s favour.
- Disapproval of lifestyle choices. A parent may disapprove of the way their child has conducted their life, perhaps due to their choice of relationship, religion, profession, or the way they spend their money, and therefore decide to leave that child nothing or a smaller portion of the estate to reduce the risk of money being wasted.
- Conflict: In some cases, the relationship between parent and child can be strained or full of conflict, causing a parent to feel they don’t want to leave anything for that particular child.
- Abuse: In more serious cases, the parent may feel as though they have been the subject of abuse (i.e emotional, physical, or financial) at the hands of the child and may wish to exclude that child.
- Preference to leave the estate to others. Where a parent feels their are more worthy beneficiaries. This can often arise when both parents disinherit the same child or children because they have prepared mirror wills giving their estate to other beneficiaries or for charitable purposes.
Legal Implications of Disinheritance in NSW
Disinheriting a child in NSW can have ongoing, complex, and time-consuming legal implications. Although in New South Wales, a person can leave their estate to anyone they choose (this is known as testamentary freedom), there are laws that allow the will to be overridden in specific cases, effectively rewriting the terms of the will and altering the distribution of the deceased estate.
To contest a will in NSW means to bring a claim against a deceased estate under Section 59 of the Succession Act 2006 (NSW) seeking provision (or further provision) from the deceased estate.
A claim of this nature is known as a ‘family provision claim.’ It is the job of an executor of a will to defend the estate against family provision claims.
Whether or not a particular child has a claim will depend on the facts and circumstances of the particular case. Just because a child has been wholly or substantially disinherited does not mean the child has a strong claim. There are many cases where a child who has been wholly disinherited will have low prospects of success because of the facts and circumstances, and it is important to seek advice from a specialist wills and estate lawyer if you are considering bringing a claim.
Can my child contest my will in NSW?
Claims are often brought by adult children who were expecting to receive something in their parent’s will, but upon the parent’s death learn they are not a beneficiary.
In NSW, an application for a family provision order must be made within 12 months from the date of death of the deceased person.
Only an ‘eligible person‘ as defined in the Succession Act 2006 (NSW) can make a family provision claim. Eligibility arises primarily from the nature of the relationship between the deceased and claimant.
In NSW, close relatives such as a spouse, a de facto partner, and child are eligible persons for the purposes of the Succession Act 2006 (NSW) but step-children do not fall within the definition of “child”. Other relatives and non-relatives of the deceased may also fall within the definition of an eligible person, but it depends on the facts and circumstances of each case.
In the case of a child, the court will consider whether the deceased person’s will has made adequate provision for the child’s proper maintenance, education, or advancement in life. In considering this assessment, the court may have regard to the 16 factors in Section 60(2) of the Succession Act 2006 (NSW), which includes but is not limited to the child’s relationship with the testator, the child’s financial resources, any contributions to the parent’s estate, and the conduct and character of the child. In cases involving children, the court will often consider the extent of the parent’s moral duty to provide adequate provision for the child. When it comes to moral obligations, generally speaking, a spouse, de facto partner, and children are given the greatest priority.
Claims by children may be well-founded and have good prospects of success where, for instance, the child is facing dire financial circumstances, where the child was financially dependent on the deceased at the date of death, or where, because of other circumstances, the child was entitled to receive more than they did.
On the other hand, claims may be frivolous and have no prospects of success.
In reality, many claims are brought by adult children who didn’t receive anything or feel they were unfairly left out of the will. However, the strength of a claim will depend on the facts and circumstances of each individual case and the claimant will need to prove their case.
Most disputes can be resolved through negotiations and mediation.
If a matter proceeds to court, where the court is satisfied that adequate provision has not been made for the child, the judge may decide in favour of the child and order that such provision effectively rewriting the terms of the will.
How can a parent reduce the likelihood of their will being contested?
A parent wanting to exclude one or more children from their will can take several steps to reduce the risk of a claim after they pass away.
1. Engage legal advice when drafting your will
An expert wills and estate solicitor will be able to assist in preparing a will that is clear, precise, and current. A solicitor is best placed to advise whether there are any obvious risks of claims and outline the steps that the client can take to best protect their assets against those potential claims.
2. Provide reasons for the testamentary intentions
Where a parent explicitly excludes one or more children, a lawyer may also recommend that they prepare additional documentation (usually in the form of a statutory declaration) detailing the reason why a particular person was disinherited. This document may be relied upon as evidence of the testator’s testamentary intentions as to why the will excludes them as a beneficiary.
While a statutory declaration does not prevent a claim, it may help defend a claim.
3. Ensure that those eligible to contest your will are reasonably accounted for
Another way to potentially reduce the risk of a claim is to make the minimum ‘adequate provision’ for the beneficiary in the will by leaving them the smallest portion of the estate, which might constitute adequate provision for the purposes of the legislation. The court will take into account the provision that was made when determining whether that provision was adequate.
By leaving minimum adequate provision, this can also help deter a claim, as the claimant might consider that the risk of bringing a claim outweighs any potential benefit of a successful claim.
However, the challenge lies in determining what might constitute minimum ‘adequate provision’ as this is only ever something that a court can determine at the time of determining an application. It is not something that a lawyer can calculate or forecast with any precision at the time of making a will.
4. Structure assets in your estate in a different way
One of the best ways to protect against family provision claims is through asset structuring, which results in a person holding assets in trusts or similar structures that place them outside the reach of family provision legislation.
Estate assets such as family homes and investment properties held in the deceased’s name are usually the assets most at risk of a claim after death.
On the other hand, some assets held in trust do not fall into a deceased’s estate such as property or shares held in a discretionary family trust. Similarly, superannuation will not fall into a deceased’s estate unless there is a valid binding nomination form nominating the ‘legal representative’ as the beneficiary.
However, it is important to note that in NSW the law contains ‘notional estate’ provisions that can operate to widen the pool of assets that may be made available to satisfy a family provision order.
5. Transfer some or all of your assets before your death
Some people choose to distribute assets before they die by giving them to beneficiaries of their choosing while they are alive.
However, this should be carefully considered because it does not provide complete protection against claims being brought against the estate after death, as in some cases, assets that are transferred before death may be ‘clawed-back’ into the estate under the ‘notional estate’ provisions and made available to satisfy a family provision order. An experienced wills and estates lawyer will be best placed to provide advice in relation to ‘notional estates’ and advise when an asset may be ‘clawed-back’ into the estate.
Transferring part of your estate before you die may also have other financial implications, including tax consequences and impacts on government benefits and aged care arrangements, among other potential consequences, and we recommend that a person obtain advice before transferring any assets before death.
The only way to avoid a family provision claim after you die is to die with no estate or notional estate. However, this is a drastic approach that may have other disadvantages, such as reduced control over your assets or tax consequences. In most cases, a wills and estate lawyer will be able to significantly reduce the risk of a claim through tailored estate planning.
The Importance of Estate Planning & Consulting With an Estate Lawyer
People often ask if they are legally allowed to exclude a child from their will. If you are considering leaving a child out of your will, we recommend that you seek advice from an experienced wills and estate solicitor and obtain advice in relation to the potential risks of disinheriting a child from your estate.
Inadequate estate planning can have devastating financial consequences for the intended beneficiaries of your estate if a disinherited child brings a successful claim whereby they obtain a share of your estate, so paying for professional estate planning services can help avoid legal mistakes and prove a far less costly exercise for you and your loved ones in the long term.
Ensure Your Wishes are Honoured. Speak with Our Estate Lawyers Today
If you have an inquiry about disinheritance or are curious to know how to make the process more effective, don’t hesitate to contact our team of experienced estate planning solicitors today on 1300 414 844.
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Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources which are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.