Estate disputes are surprisingly common in Australia. Laws across different jurisdictions allow eligible individuals to challenge a deceased’s Will if they believe they have not been adequately provided for. In such cases, a successful claim may result in the terms of the Will being adjusted in favour of the claimant. However, there are steps you can take to help protect your estate from a family provision claim. These steps can help ensure your final wishes are respected.
What is a Family Provision Claim and Who Can Make One?
A family provision claim (also called a testator’s family maintenance claim) is a legal application made by an eligible person. The person seeks a share, or a larger share, of a deceased person’s estate.
In essence, the claimant argues that the deceased did not make adequate provision in the Will for their proper maintenance and support.
The eligibility criteria for a family provision claim varies across Australia. Therefore, it is important to consider the legislation in your specific jurisdiction.
Generally, eligible people include close family members such as a spouse, de facto partner, and biological or adopted children. In some jurisdictions, stepchildren, former spouses, and financially dependent individuals may also be eligible in certain circumstances.
Reasons Estate Disputes Arise
To reduce the risk of claims, it is important to understand why estate disputes arise. In many cases, emotional and family dynamics play a significant role.
Family relationships often become more complex after a death. As a result, grief can intensify existing tensions between family members.
Disputes commonly occur in blended families or where relationships were estranged. In these situations, disagreements about the deceased’s intentions can arise more easily.
Family provision claims may also arise when someone believes the distribution of assets is unfair. For example, one child may have provided long-term care for a parent while others were less involved.
In these cases, the carer may have incurred financial costs or lost opportunities. However, the Will may not always reflect those contributions.
Additionally, outdated Wills can create disputes. This may occur after marriage, divorce, or the birth of children. Similarly, unclear wording in a Will can lead to confusion and disagreement.
Steps to Help Minimise Family Provision Claims
Prepare an Effective Will
One of the most important ways to reduce risk is to prepare a clear and effective Will. A well-drafted Will clearly sets out your intentions for asset distribution.
This reduces ambiguity and lowers the risk of misinterpretation. In addition, your Will should reflect your financial position, family structure, and any potential areas of conflict.
Consider Potential Claimants
Although you can distribute your estate freely, it is important to consider eligible individuals who may make a claim.
In some cases, providing limited provision may help demonstrate that you considered their needs. As a result, this may reduce the likelihood of a dispute.
Review your Will Regularly
Your Will should be reviewed regularly to reflect life changes. For example, marriage, divorce, the birth of children, or changes in financial circumstances should trigger a review.
Keeping your Will updated ensures it continues to reflect your intentions accurately.
Check your Superannuation
Superannuation is generally not included in your estate. Instead, the super fund trustee decides how to distribute funds unless a binding death benefit nomination exists.
Therefore, it is important to regularly check your superannuation nominations. You should ensure your nominated beneficiaries are up to date.
In addition, obtaining financial advice can help you understand any tax implications for beneficiaries.
Check Property Ownership
Property ownership structure plays an important role in estate planning. For example, joint tenants own property together as a whole.
Under joint tenancy, ownership automatically passes to the surviving co-owner. In contrast, tenants in common hold separate shares in the property.
These shares do not need to be equal. Each owner can transfer or leave their share to a beneficiary in their Will.
Trusts
A trust is a legal structure used to hold and manage assets. Different types of trusts can provide different benefits.
For example, trusts may help protect assets, provide for minor children or vulnerable individuals, and assist with tax planning.
Because trusts can be complex, it is important to obtain professional legal and financial advice before establishing one.
Communicate with your Family
Open communication with family members can help reduce misunderstandings. Where appropriate, explaining your decisions may help manage expectations.
This can also reduce the likelihood of future disputes. In some cases, it may help family members better understand your intentions.
Conclusion
If you do not address potential family provision claims, your estate may become involved in costly and time-consuming disputes. While it is not possible to completely prevent a claim, you can take proactive steps to reduce the risk.
Seeking professional advice can help protect your estate and ensure your wishes are properly documented and respected.
This information is general only and we strongly recommend seeking assistance from a qualified professional when preparing your Will and planning your estate. If you or someone you know wants more information or needs help or advice, please contact us on 07 5576 9999 or email [email protected].
