Claims Against Estates and the Inheritance (Family Provision) Act
There are basically three different ways in which the estate of a deceased person might have a claim made against it.
The different types of claim are not mutually exclusive i.e. the one dispute might involve some combination of the three types of claim, perhaps brought in the alternative.
Claims that already existed before Death
It is important to understand that any claims that could have been made against the deceased person while they were alive can, usually, still be made against their estate.
So, for example, if the deceased had entered into a binding contract prior to their death, their estate will be bound by that contract and the estate is obliged to meet any outstanding liabilities of the deceased including for expenses like medical treatment.
Some existing claims might not be so obvious. An example might be where a person has an equitable claim against the deceased where there has not been any formal contract entered into. The most common situation is where a representation was made by the deceased to another person and that person then acted to their detriment in reliance on that representation, which representation was not fulfilled.
One obvious example of this might be a person who works for another person’s business on the basis that they will be gifted the business (or offered it on favourable terms) on the other person’s retirement or death. This can often happen in the case of farming properties where one family member works long hours for little immediate financial reward on the understanding that, if they look after the deceased in their old age, the farm will eventually go to them.
Such claims can also be brought following death and, in some cases, might be brought as an alternative to one of the other types of claim – particularly a claim under the Inheritance (Family Provision) Act.
Contesting the validity of the Will
For a Will to be valid there are certain statutory requirements that have to be complied with including that it is in writing, dated and signed by the deceased and two adult witnesses.
In some cases, where not all of these matters have been properly attended to, it is still possible to have a Will accepted by the Court as being valid but the process is by no means straight forward. “Home-made” wills can cause particular problems (and expense)!
Even where the Will otherwise appears to be valid on its face, its validity can still be potentially contested on a number of different bases, including:-
- That the testator did not have adequate medical capacity to understand the nature and effect of the Will (i.e.they “lacked testamentary capacity”).
- That the deceased was subject to undue influence so that the document was not the exercise of the deceased’s free will.
- That the Will was procured by fraud.
- That the Will is a forgery or that the deceased did not know and approve the contents of the purported Will.
The law in this area is extremely complex and allegations of this type are often (but not always) difficult to prove.
Inheritance (Family Provision) Act Claims
This tends to be the most common basis for a claim to be made against an estate.
Essentially the Inheritance (Family Provision) Act allows certain specified close family members to make a claim for a share, or a larger share, or someone’s estate on the basis that proper provision in all the circumstances has not been made for them by the testator.
It is important to understand that a testator cannot remove the risk of any such claim by leaving someone a token gift in the will. The suggestion that you can avoid the claim by “just leaving them $5” is an urban myth.
You might be surprised to know that claims can be potentially made not only by spouses and children but also by ex-spouses, de-facto spouses, grandchildren and siblings.
However, claims cannot be made against step – parents, except in limited circumstances.
This causes particular problems in the case of second relationships where a parent has left everything to their second partner in the expectation that the second partner will ultimately leave some or all of their estate to the deceased’s children. If the second partner then changes their will to exclude the deceased’s children they cannot usually retrieve their position under this legislation.
This is one reason why we emphasise that you have your will professionally drawn i.e. so as to arrange your affairs to deal with this sort of issue.
To have rights in relation to a disputed Will, it is important that you obtain legal advice and act on that advice as soon as possible. Time limits apply and delay could result in an otherwise good claim failing.
The question of costs can be complex and something which needs to be discussed fully with your solicitor.
Contrary to popular myth, not all of the parties’ costs are necessarily paid from the estate in all cases. A successful applicant will invariably have a contribution to their costs made from the estate but an unsuccessful party may not. The matter might be one that is appropriate for either deferred billing or a "No Win - No Fee" arrangement.