Generally, there are two types estate disputes:
- challenges to the validity of a will; and
- contests regarding the proposed distribution of an estate.
Challenges to the validity of a will concern assertions that the will is void for lack of formality (for example, not correctly signed or witnessed), or that the testator lacked mental capacity or signed the will under duress or in fraudulent circumstances.
More commonly, estate disputes involve a contest regarding the fairness of the terms of a will, known as a family provision claim.
An executor (or administrator in the case of an intestate estate) is the estate’s legal personal representative and has a primary duty to uphold or defend the will and preserve estate assets.
An executor facing a family provision will need to carefully consider his or her position and be guided by appropriate legal advice.
About family provision claims
Family provision claims involve conflict and are usually highly emotive. They can often complicate the administration of an estate, add stress and anxiety to an already difficult time and can become very expensive for everyone involved.
A family provision claim enables an eligible person to claim provision from an estate. A successful claim will alter the terms of the will in favour of the applicant, leaving less for the beneficiaries named in the will.
An eligible person includes:
- the spouse, former spouse, or de facto partner of the deceased;
- a child of the deceased;
- a person who was wholly or partly dependent on the deceased and who is the deceased’s grandchild or was a member of the deceased’s household at the time of his or her death;
- a person who was living in a close personal relationship with the deceased at the time of his or her death.
The applicant must show that the deceased person failed to make adequate provision for his or her proper maintenance, education and advancement in life.
A Court considers several factors when assessing a claim including:
- the financial position of the applicant,
- the circumstances, financial position and needs of other beneficiaries,
- the size of the estate;
- the relationship between the deceased person and the applicant; and
- the moral duty and obligation for the deceased to provide for the applicant in light of generally-accepted community standards.
The role of the executor
The role of the executor is challenging when faced with a family provision claim.
Although the primary duty will be to defend the claim, an executor may need to consider resolving a claim that is likely to succeed should it proceed to Court. Settling a claim may be in the interests of the estate and beneficiaries and avoid costly litigation that would deplete estate assets.
Some claims are morally justified and a decision to settle needs to be balanced with the duty to uphold the terms of the will. Such decisions are best made with the advice of a lawyer who will assess the merits of a claim and the likely outcome should the matter become litigated.
We will review the evidence available to defend or reject the claim, the size of the estate and the likely outcomes. We will explain the available options so an informed decision can be made as to whether the claim should be settled, negotiated or defended.
Defending the claim in Court
If a claim proceeds, an executor must assist in obtaining the evidence relevant to defend the claim including any evidence required from the beneficiaries. The estate assets and liabilities and the estimated net amount available for distribution must be disclosed to all parties.
To avoid personal liability, the executor should not distribute any part of the estate, unless extenuating circumstances apply. The executor should obtain legal advice if there is an urgent need for a partial distribution.
The claim can be settled at any stage prior to the Court hearing. Mediation is generally ordered by the Court which can assist in resolving the dispute without further legal cost, or at least narrowing the issues in dispute. Most cases are resolved at mediation and terms of settlement prepared to document the agreement reached.
The estate will usually be liable for the legal costs if a family provision claim is successful.
Most executors are appointed because they are a close relative or trusted friend of the deceased. Estate disputes are therefore not only legally challenging but emotionally draining.
We have assisted many clients in disputed estate matters by providing thoughtful and timely advice. Our focus is on defending or resolving the claim in the most practical way possible, whilst preserving the estate and protecting the executor from liability.
Call us now on 08 8276 7955 if you’re involved in a deceased estate dispute and wanting some direction.
This blog published is published by Di Rosa Lawyers for informational purposes only and is not considered legal advice on any subject matter. By reading and re-publishing the blog, you acknowledge that there is no solicitior-client relationship between you and Di Rosa Lawyers. The blog should not be used as a substitute for legal advice from a legal practitioner who specialises in the area and you are urged to consult us or seek your own independent legal advice on any specific issue or matter.