How to Stop Someone Contesting a Will in Australia
In NSW, a person may contest a will by bringing a claim against a deceased estate for provision or further provision from the estate. This is known as a ‘family provision claim.’
Family provision claims may be well founded and have good prospects of success, or may be frivolous with no prospects of success brought by aggrieved yet hopeful friends or family. The strength of a claim will depend on the facts and circumstances of the case.
As a family provision claim is a claim against the deceased estate, the executor of the deceased estate is often the person who defends a family provision claim. Usually, a person will notify the executor of their intention to bring a claim before they commence proceedings.
There are several steps that an executor can take to best defend the estate from both well-founded and frivolous claims.
Once a person notifies the executor of their intention to bring a claim, the first step for the executor to take is to seek legal advice from a lawyer who has experience in defending claims on estates.
If the executor has sound reasons to defend the claim, the next step often involves writing to the claimant setting out the legal reasons why their claim is likely to fail including a detailed reference to any factors in section 60(2) of the Succession Act 2006 (NSW) that appear to weaken the claimant’s claim. The claimant should also be put on notice of the potential cost consequences of taking the matter further, should they prove unsuccessful.
If the executor does not have sound reasons to defend the claim, the executor may decide to engage in negotiations in consultation with the named beneficiaries. Often negotiations can result in favourable outcomes to the executor and the named beneficiaries.
Can I stop someone from contesting a will in Australia?
Whether or not you can stop someone from contesting a will depends on your role or position in respect of the deceased estate.
If you are the executor and you would like to stop someone from contesting a will, there are several steps you may take to best protect the estate from a claim.
The first step often involves writing to the claimant setting out the legal reasons why their claim is likely to fail including a detailed reference to any factors in section 60(2) of the Succession Act 2006 (NSW) that weaken the claimant’s claim.
The claimant should also be put on notice of the potential cost consequences of taking the matter further and losing.
The negotiations may continue for several months and may result in the claim being abandoned, settled or heard in court.
A named beneficiary but not executor
If you are named as a beneficiary in the deceased’s will but are not the executor, you may become aware of a claim through the executor.
Given the claim is against the estate and not you personally it is the estate who is left to defend the claim. However, a successful claim against the estate can impact the amount that you receive.
If a named beneficiary becomes aware of a claim against the estate they should obtain legal advice on steps they can take to best protect their share. In some cases this may include bringing their own claim against the estate.
Neither named beneficiary or executor
If you have been left out of a will and are not the executor, you may become aware of a claim through friends or family.
We recommend that you seek legal advice as you may be able to bring your own claim against the estate. A claim may be a family provision claim, or you may have grounds to challenge the will on the basis of suspicious circumstances, undue influence or lack of testamentary capacity.
A claim by you may have the effect of reducing the prospects of the original claimant’s claim or reducing the claimant’s potential benefit in the event that they are successful.
What It Means to Contest a Will
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.’
Under What Circumstances Can a Will be Contested
A person may contest a will if they can prove:
- They are an eligible person; and
- At the time of the court considering the application, adequate provision for the person’s proper maintenance, education and advancement in life has not been made by the will of the deceased person.
Section 57 of the Succession Act 2006 (NSW) defines ‘eligible person’ as a spouse, de facto spouse, and child, a former spouse, a wholly or partly dependent grandchild or member of the deceased’s household, or those with whom the deceased person was living in a close personal relationship at the time of the deceased’s death. However, a former spouse, a wholly or partly dependent grandchild or member of the deceased’s household, or those with whom the deceased person was living in a close personal relationship at the time of the deceased’s death will need to show that there are ‘factors which warrant the making of the application’ for family provision.
When considering whether a person has been left with adequate provision, the court will have regard to the 16 factors in section 60(2) of the Succession Act 2006 (NSW).
Who is Eligible to Contest a Will
- A spouse of the deceased
- A de facto of the deceased
- A child of the deceased
- A former spouse of the deceased
- A grandchild of the deceased who is wholly or partly dependent on the deceased
- A member of the deceased’s household who is wholly or partly dependent on the deceased
- A person with whom the deceased was living in a close personal relationship at the time of the deceased’s death
In the case of a former spouse, a wholly or partly dependent grandchild or member of the deceased’s household, or those with whom the deceased person was living in a close personal relationship at the time of the deceased’s death, the person must also show that there are ‘factors which warrant the making of the application’. In other words, there is an additional threshold that applies to these applicants who can contest a will.
How to Prevent a Will From Being Contested
Engage Legal Advice When Drafting Your Will
There are steps that you can take before you die to best protect your estate from claims.
First and foremost we recommend that you have a will that is clear, precise and current. If you are concerned that your will is ambiguous or outdated we recommend that you contact a lawyer who practises solely in wills and estates or will and estate disputes to prepare a new will.
When preparing a client’s will, an experienced will and estate lawyer will have the skills to identify whether there are any obvious risks of claims against the estate, advise you of the nature of those potential claims, and advise you of the steps that you can take to best protect your estate against those potential claims.
For example, this may include preparing additional documents such as a statutory declaration explaining your reasons for distributing your estate in the manner you have or the reasons for leaving a particular person out of the will. Your executor may then be able to rely on these documents to defend a future claim, should the need arise. Whilst these documents may not provide absolute protection, they will go some way in helping to defend a future claim.
Ensure That Everyone Who Is Eligible To Contest Your Will is Reasonably Accounted For in Your Will
An eligible person will only succeed in contesting a will if they can prove that adequate provision for the proper maintenance, education or advancement in life has not been made by the will of the deceased person.
The result being that a person’s claim will fail if at the time of the court considering the application, the deceased person’s will provided adequate provision for the person’s proper maintenance, education or advancement in life.
Though it is not always the case, it is often the case that a testator can better protect against a future claim by leaving a potentially eligible claimant an amount of provision that constitutes ‘adequate provision,’ rather than nothing.
However, the challenge lies in determining what might constitute ‘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.
While a lawyer cannot advise a client how much to leave any particular beneficiary, a lawyer can advise a client of the risks of future claims against the estate and can advise a client whether the provision made for a particular beneficiary is likely to constitute ‘adequate provision’ for the purposes of section 59 of the Succession Act 2006 (NSW). The lawyer can give consideration to the factors in section 60(2) of the Succession Act 2006 (NSW) when providing this advice. The client can then determine whether to adjust the provision for any particular beneficiary.
Structure Your Assets
Another way you can protect against future claims on your estate is through asset structuring.
The assets that you own when you die are the assets that fall within your estate. Examples often include a family home, investment property, shares or money that a person owns solely or as tenants in common with someone else.
These assets are typically the most at risk of potential future claims against your estate after you die.
Assets that are held in a trust will not fall within your estate. This may include property or shares that are owned in a family trust. Similarly, superannuation will not fall within your estate unless there is a binding nomination form nominating the beneficiaries as the ‘legal representative.’
Assets that are held in a company will not fall within your estate. However, any shares that you hold in the company itself will fall into your estate when you die.
The need for more complex asset structures will generally increase with the size of the estate.
However, it is important to note that the Succession Act 2006 (NSW) contains provisions relating to ‘notional estates’ which can operate to widen the pool of assets that may be made available to satisfy a family provision order.
An experienced wills and estates lawyer will be best placed to advise you of your options and benefits of asset structuring having regard to your specific circumstances.
Transfer Some or All of Your Assets While You are Still Alive
The assets that you own when you die are the assets that fall within your estate.
If, after you die, a person brings a family provision claim against your estate and is successful, the court may change the terms of your will and alter what each beneficiary receives from your estate. Therefore, the assets that you own at death are the assets most at risk of being made available to meet a family provision order.
Another way to avoid the court changing what each beneficiary receives is to give away one or more assets during your life-time. In other words, advancing your inheritance to your chosen beneficiaries.
Transferring assets before you die does not provide complete protection against family provision claims against your estate after you die and in some cases the assets may be designated ‘notional estate’ and may still be 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 whether or not an asset may be ‘clawed back.’
Transferring an asset before you die may also have tax consequences and have an impact on government benefits and aged care arrangements, among other potential consequences, and we recommend that a person obtains legal advice before transferring any assets.
Create a Binding Death Benefit Nomination
When it comes to superannuation, it is an asset that is held in trust for you (as the beneficiary) for retirement.
Notwithstanding your ability to choose a particular superannuation fund and to choose specific assets, the money is effectively controlled by the trustee of the trust.
As a beneficiary (or member) of the trust, you have an opportunity to complete a binding death benefit nomination form within which you can nominate who you wish to receive your superannuation and any death benefit proceeds, when you die. This gives you substantial control over who you want to leave your money to.
When you die, the trustee of the trust is obliged to distribute the proceeds of the account (including any death benefit proceeds) in accordance with any current binding death benefit nomination.
A binding death benefit nomination lasts for three years and therefore requires regular review and updating.
It is also important to bear in mind that if you nominate ‘legal representative’ in your binding death benefit nomination, the benefit will fall within your estate and will be dealt with in accordance with the terms of your will.
Empower Wills and Estate Lawyers Case Study: Mother v Grandchild
The team at Empower Wills and Estate Lawyers recently dealt with a mother v grandchild case involved a dispute over a deceased estate worth $7.2m.
The deceased’s last will and testament divided the estate 50%, 30% and 20% to her son, daughter, and grandchild, respectively.
The mother was aggrieved at not receiving the same as her brother, and put the estate on notice of her intention to bring a family provision claim. Empower Wills and Estate Lawyers was retained by the grandchild to defend his mother’s claim and protect his interest.
We successfully negotiated the matter resulting in our client receiving the equivalent of 16% of the estate in property and cash. The agreement was formalised through a Deed of Family Arrangement thereby avoiding the delays and costs of court proceedings.
Notwithstanding being left 30% of what was a large estate, the mother foreshadowed a family provision claim. We engaged in firm and fearless negotiations setting out clear legal reasons why the mother’s family provision claim had weak prospects, effectively smothering a claim before it gained any momentum.
This matter was conducted on a conditional or ‘no win no fee’ costs agreement meaning our client was not required to pay our fees unless and until we reached a favourable outcome.
How Can Empower Wills and Estate Lawyers Help?
Our lawyers are experienced will and estate dispute lawyers based in Sydney who defend wills and estates on a daily basis.
There are several steps that can be taken to stop a person from contesting a will and the most appropriate course will depend on your role or position with regard to the will and/or the estate.
Want to learn more?
Read more about how to contest a will in NSW here.
Read more about who can contest a will in NSW here.
Disclaimer: the information in this article relates to NSW law and is general information only. It does not constitute legal advice and should not be relied upon. 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 and circumstances.