Introduction

Contesting a will is a legal process that allows eligible individuals to challenge the distribution of a deceased person’s estate. In New South Wales, this is governed by the Succession Act 2006 (NSW), which provides a framework for resolving such disputes. While it is impossible to completely prevent someone from contesting a will, there are strategic steps you can take to minimise the likelihood of a successful challenge and protect your estate according to your wishes.

This guide provides essential information and practical strategies to help you understand the legal landscape of will contests in NSW. It covers key aspects such as estate planning, asset structuring, and the importance of legal advice to ensure your estate is distributed as intended. By implementing these strategies, you can reduce the risk of disputes and safeguard your legacy for your loved ones.

Understanding Will Contesting in NSW

What is a Will Contest & Family Provision Claim?

Contesting a will in NSW, specifically under the Succession Act 2006 (NSW), refers to making a family provision claim. This occurs when an eligible person challenges the will, claiming they did not receive adequate provision from the deceased estate.

The court carefully assesses whether the will provides sufficiently for the claimant’s:

• Maintenance
• Education
• Advancement in life

In this process, the legal system aims to ensure fairness by balancing testamentary freedom with moral obligations to dependents.

Who Can Contest a Will in NSW?

Eligibility to contest a will in NSW is limited to specific individuals, as outlined in the Succession Act 2006 (NSW). These include:

Category of Claimant	Description / Condition
Spouses & de facto partners	Eligible by relationship status.
Children	Includes biological, adopted, or step-children.
Former spouses	Eligible under certain circumstances.
Grandchildren	Must be wholly or partly dependent on the deceased.
Members of the deceased’s household	Must be dependent on the deceased.
Individuals in a close personal relationship	Relationship must exist at the time of death; additional factors may be required.

For some categories, such as former spouses or those in a close personal relationship, additional factors must be present to warrant a claim. When determining eligibility and the adequacy of provision, the court considers various aspects, including the claimant’s financial situation and the deceased’s moral obligations.

Effective Estate Planning to Minimise Contest Risk

Engage Legal Advice While Drafting Your Will

Engaging legal advice when drafting your will is a cornerstone of effective estate planning. A wills and estates lawyer can ensure your will is clear, precise, and legally sound, significantly reducing the likelihood of ambiguities that could lead to disputes.

Professional legal guidance provides several key benefits:

Benefit	Description
Clarity & Precision	Ensuring your will is free from ambiguities that could be exploited in a contest.
Risk Identification	Spotting potential issues that might lead to challenges.
Strategic Recommendations	Tailoring your will to address specific family dynamics or asset distributions.

Additionally, lawyers can help prepare statutory declarations to explain your decisions. This documentation can be invaluable if your will is contested, as it demonstrates your intentions and thought process.

Using Trusts & Strategic Ownership to Protect Assets

Restructuring asset ownership is a powerful strategy to protect your estate from contests. By utilising trusts and strategic ownership arrangements, you can keep critical assets out of your estate, making them less susceptible to claims.

There are several effective approaches to consider:

Strategy	Type / Arrangement	Description
Trusts	Discretionary Trust	Allows a trustee to distribute income and capital among various beneficiaries.
Trusts	Testamentary Trust	Created through your will for the benefit of specific beneficiaries.
Ownership Arrangements	Tenancy in Common	Allows each owner to will their share, providing control over asset distribution.
Ownership Arrangements	Joint Tenancy	Assets automatically pass to the surviving owner (can be severed to convert to tenancy in common).

Understanding Notional Estate Risks & Asset Transfers

Notional estate claims allow certain assets to be treated as part of your estate, even if they are no longer owned at death. Understanding these risks is crucial for effective planning.

Key considerations include:

Consideration	Key Detail
Time Limits	Transfers made within three years of death may be clawed back into the estate.
Moral Obligation	Transfers made within one year of death may be targeted if the deceased had a moral obligation to the claimant.
Asset Protection	To be effective, transfers must be absolute and not reversible.

This is particularly important for assets transferred within three years before death, especially if done to defeat claims.

Using Inter Vivos Transfers for Asset Protection

Transferring assets during your lifetime (inter vivos transfers) can reduce the estate’s size, making it less attractive for contests. However, this strategy requires careful planning to be effective.

Important factors to consider include:

Factor	Consideration
Absolute Transfers	Assets must be transferred without the original owner retaining control or the ability to reclaim them.
Tax & Benefit Implications	Consider potential capital gains tax and impacts on government benefits for the recipient.
Notional Estate Risks	Assets may still be included in the notional estate if the transfer is deemed to have been made to defeat claims.

Keep Life Insurance Outside Your Estate

Naming a beneficiary for life insurance ensures proceeds are paid directly to them, bypassing the estate and avoiding contests. This strategy offers significant advantages:

Advantage	Description
Direct Distribution	Proceeds are not part of the estate, protecting them from claims.
Tax Benefits	Life insurance proceeds are generally not subject to income tax.

This approach creates a clean separation between insurance proceeds and estate assets.

Create a Binding Death Benefit Nomination for Super

A binding death benefit nomination directs how superannuation benefits are distributed, keeping them out of the estate and providing several benefits:

Feature	Description
Control & Flexibility	You decide who receives your benefits; nominations are typically valid for three years before requiring renewal.
Exclusion from Estate	Benefits are paid directly to nominated beneficiaries, thereby avoiding estate contests.
Legal Requirements	The nomination must comply with all legal standards to be considered valid and binding.

By implementing these strategies, you can significantly reduce the likelihood of your will being contested, ensuring your estate is distributed according to your wishes. Consulting with an experienced wills and estates lawyer is essential to navigate these complex areas effectively.

Conclusion

Estate planning is a critical process that requires careful consideration and professional guidance to minimise the risk of disputes. By implementing strategies such as creating a clear and precise will, restructuring assets, and utilising binding death benefit nominations, you can protect your estate and ensure your wishes are respected. Seeking advice from experienced wills and estates lawyers is essential to navigate the complexities of succession law and safeguard your legacy.

If you have concerns about potential contests or need assistance with estate planning, contact PBL Law Group’s specialist will drafting lawyers. Our experienced lawyers will help you create a robust estate plan that reflects your intentions and protects your loved ones. 

Frequently Asked Questions