In New South Wales (NSW), individuals have the ability to outline the distribution of their assets upon death through a legally binding will. However, the Succession Act 2006 (NSW) allows eligible individuals to make a family provision claim against a deceased person’s estate if they believe they have not been adequately provided for.

This article will explore the concept of family provision claims in NSW and delve into various legal strategies that can be employed to protect your estate and ensure your wishes are upheld. We will also emphasise the importance of seeking professional legal advice to navigate this complex area of law.

Understanding Family Provision Claims in NSW

A family provision claim, also known as a claim for further provision, is an application made to the court to challenge a deceased person’s will in New South Wales. This type of claim arises when an eligible person believes they have not been adequately provided for in the deceased’s will. The legal basis for family provision claims in NSW is found in the Succession Act 2006 (NSW).

Who is Eligible to Make a Family Provision Claim?

The Succession Act 2006 (NSW) outlines specific categories of people who are eligible to make a family provision claim. These include:

• The spouse or de facto partner of the deceased at the time of their death.
• Children of the deceased, including adopted children.
• Grandchildren of the deceased.
• A person who was wholly or partly dependent on the deceased.
• A person with whom the deceased was living in a close personal relationship at the time of their death.

It’s important to note that not everyone who falls within these categories is automatically entitled to a share of the estate. The court will consider various factors when determining eligibility and the validity of a claim.

Time Limits for Making a Family Provision Claim

In NSW, there are strict time limits for making a family provision claim. Generally, a claim must be made within 12 months from the date of the deceased’s death. However, the court has the discretion to extend this time limit in certain circumstances. For example, if an eligible person was unaware of the deceased’s death or if there were exceptional circumstances that prevented them from making a claim within the standard timeframe.

Learn more about family provision claims in our detailed article here.

How Common are Will Contests in NSW?

Many people believe that will contests are rare occurrences, only seen in movies or sensationalised news stories. However, the reality is that challenging wills is more common than one might think, especially in New South Wales.

Data from the NSW Supreme Court reveals that a significant number of family provision claims are filed each year. While a large percentage of these cases are resolved before reaching trial, the statistics highlight the importance of understanding the prevalence of will contests. For instance, in 2021, 872 family provision applications were lodged with the court. This data underscores the importance of proactive estate planning to mitigate the risk of potential disputes.

The frequency of such disputes in NSW is influenced by various factors, including complex family dynamics, blended families, and the high value of estates, particularly real estate, in the state. Understanding the likelihood of will contests can prompt individuals to take necessary steps to protect their estate and ensure their wishes are honoured.

Essential Strategies to Protect Your Estate

Protecting your estate from potential family provision claims in NSW requires careful planning and a thorough understanding of the relevant laws. While a will is a fundamental part of estate planning, it’s not always enough to prevent claims. Here are some strategies to consider:

Proper Estate Planning with Legal Advice

Seeking legal advice from an experienced estate planning solicitor is crucial. They can help you understand the intricacies of family provision laws in NSW and tailor your estate plan to your specific circumstances. A solicitor can advise you on:

• Eligibility criteria for potential claimants: Identifying potential claimants and their eligibility is crucial to developing effective estate protection strategies.
• Structuring your will: A well-drafted will is the foundation of a solid estate plan. Your solicitor can help you clearly articulate your wishes and minimise ambiguities that could lead to disputes.
• Addressing potential claims: Your solicitor can help you address potential claims proactively by including clauses in your will that explain the reasoning behind your decisions.
• Exploring alternative distribution methods: Depending on your circumstances, your solicitor may suggest alternative distribution methods, such as testamentary trusts or family trust arrangements, to safeguard your assets.

Using Joint Tenancy Ownership

Holding assets as joint tenants can be an effective way to bypass your will and ensure they pass directly to the surviving joint owner. This can be particularly useful for assets like the family home. However, it’s crucial to consider the implications of joint tenancy carefully, as it may not be suitable for all situations.

Utilising Trusts in Estate Planning

Trusts can be powerful tools for estate protection. By placing assets in a trust, you transfer ownership to the trustee, who manages them according to your instructions outlined in the trust deed. This can help:

• Control asset distribution: You can specify how and when assets are distributed to beneficiaries, potentially protecting them from creditors or relationship breakdowns.
• Provide for vulnerable beneficiaries: Trusts can ensure that assets are used for the benefit of beneficiaries who may not be able to manage their finances independently.
• Minimise tax liabilities: Depending on the type of trust and its structure, there may be potential tax benefits.

Strategic Use of Superannuation and Insurance Policies

Superannuation and life insurance policies generally do not form part of your estate, making them valuable tools for estate planning.

• Superannuation nominations: Ensure your superannuation fund has a valid and binding death benefit nomination that clearly states your chosen beneficiaries.
• Life insurance beneficiaries: Designate specific beneficiaries for your life insurance policies to ensure the proceeds are paid directly to them, bypassing your estate.

It’s important to remember that laws surrounding superannuation and insurance can be complex. Seeking professional advice is essential to ensure your intentions are carried out correctly.

The Role of the Executor in Defending Claims

The executor plays a crucial role in defending the estate against family provision claims in New South Wales. Their responsibilities are significant and require careful navigation of legal and ethical obligations.

When a family provision claim is made, the executor is tasked with “defending” the estate, essentially upholding the wishes outlined in the will. This responsibility involves:

• Understanding the Claim: The executor must thoroughly understand the nature of the claim, the applicant’s relationship to the deceased, and the grounds on which they are seeking further provision.
• Gathering Information: The executor is responsible for gathering all relevant information about the deceased’s assets, liabilities, and the beneficiaries named in the will. This information is crucial for the court to assess the validity of the claim.
• Seeking Legal Advice: It’s essential for the executor to seek legal advice from a solicitor specialising in estate litigation. A solicitor can provide guidance on the merits of the claim, potential legal strategies, and the best course of action to protect the estate’s interests.
• Acting Impartially: Even if the executor is a beneficiary of the will, they must remain impartial and act in the best interests of the estate as a whole. Their personal interests should not influence their decisions or actions during the claim process.
• Negotiating and Mediating: The executor may be required to participate in negotiations and mediation with the claimant to explore the possibility of an amicable settlement. This process can help avoid costly and time-consuming court proceedings.
• Representing the Estate in Court: If the claim proceeds to court, the executor may be required to represent the estate and present evidence to support the deceased’s wishes as outlined in the will.

The executor’s role in defending a family provision claim is demanding and requires a delicate balance of legal obligations, ethical considerations, and sensitivity to the emotional complexities of the situation.

Limitations of Estate Protection Strategies

While the strategies outlined in this article can be effective in protecting your estate from family provision claims, it’s important to understand their limitations. The law recognises that circumstances can change, and aims to balance testamentary freedom with the need to ensure fairness for those who were dependent on the deceased.

One key limitation is the concept of “notional estate” in NSW. Under certain circumstances, the court can consider assets that are not legally part of the deceased’s estate when assessing a family provision claim. This means that even if you’ve strategically placed assets into trusts or joint ownership, the court may still consider them when determining if adequate provision has been made for eligible claimants.

Conclusion

Protecting your estate from potential family provision claims in NSW requires careful planning and a thorough understanding of the relevant laws. Implementing strategies like joint tenancy ownership, establishing trusts, and leveraging superannuation and insurance policies can significantly safeguard your assets.

However, it’s crucial to remember that no strategy is foolproof, and the law surrounding family provision claims can be complex. Seeking professional legal advice is paramount to ensure your estate plan aligns with your wishes and minimises the risk of future disputes.

Your peace of mind is a call away. Speak to our legal experts now.

Frequently Asked Questions