Challenges to Wills?
The notes under this heading are based on an interview on Radio National between Susanna Lobez and Victorian barrister Richard Boaden.
Although the interview was some years back some high profile cases in 2011 illustrated some of what Mr Boaden said.
The ABC published the full transcript on its website for many years but since it is no longer there we include below a heavily abbreviated summary of Richard Boaden's comments. Do not view it as advice - just "food for the brain" (as the ABC used to say).
People can contest or challenge a will in two ways:
- claim the will is invalid because the willmaker was not of sound mind
- claim that the will did not make provision for them when it should have.
Grounds of claims might include:
- The estate has gone to an inappropriate person or
- it was given to someone else who’s died, or
- people who supported the willmaker after the will was made have been left out.
Claims are judged on two fundamental criteria
- financial need. (This financial need not be immediate. Older claimants might say they’ve got insufficient money to retire on. The court often likes to see if it can pay off a mortgage for the plaintiff).
- the quality of the relationship between the person who’s died and the applicant.
If neither of above conditions exists, people have freedom to make wills that leave their money to anyone they like.
A common problem area. Where a twice-married person leaves children of the first marriage and a surviving second spouse, they have obligations to both sides.
The two sides may have got on together before, but disputes about money are common after the willmaker has died, and relations tend to break down.
If a surviving spouse with children was the sole beneficiary of a Will they go on living normally. If they re-marry, everything could end up in the name of the new partner and their family, to the exclusion of the children of the previous relationship.
There is potential for fighting about the money and the estate, and the relationship between the two families is put under great strain and it often leads to litigation.
In Victoria (at the time of this interview in 2000) an average estate was worth $250,000 (but now much more of course), and if it is divided between a surviving spouse and the former family there won’t be enough to provide for either side. Options for willmakers are:
- divide it in equal proportions.
- give the whole estate to a surviving spouse for life and then when that spouse dies, give it to the children .
Best advice is to be open about it - discuss it with both sides before you die.
Frequency of claims
Between half a per cent and one per cent of the cases of people who die. Very few of them go to trial – about half a dozen in the Supreme Court each year.
Legislation was extended recently to cover defacto spouses and people who aren’t either a spouse or a child. Even though that legislation’s been in force now for about 21 months, no claims under that legislation have actually gone to trial. But many claims have been made, and many of them settled with mediation. (Note: the term "domestic partner" tends to be used these days).
Outcomes are hard to predict
If the case proceeds to court the outcome can depend on which Judge. Some Judges tend to think will-makers should be free to do whatever they like with their assets – while other judges tend to be more liberal and consider that the deceased person ought to have made financial provision for the plaintiff.
If beneficiaries helped parents buy a home
Sometimes a child assists aged parents to buy a home for their retirement. The child makes a big financial contribution on the understanding the elderly parents will benefit the child in their Will. Such an agreement is enforceable as a contract, but the contract must be seen to exist. Have the agreement prepared professionally and in writing, so you can see what was agreed. Informal agreements are a common source of litigation. Think through the consequences and make a Will that makes allowance for agreement.
(An alternative consideration not included in the interview but added in 2017 because it might become significant:
The explosive rise in housing prices in Australia, coupled with slow income growth and the inability of some/many young people to raise a deposit on a house, could increase the likelihood of beneficiaries (or missed-out beneficiaries) to challenge a Will).
Provision for Carers
Courts sometimes deal with claims where someone might have been caring for an elderly friend or relative, or someone who is young and ill (perhaps with a disease like AIDS). The basic principles are reasonably uniform across the country, but in the 1990’s the extensions to the range of people who can make a claim has led to divergence across the States.
Helping your Inheritance along
Some people accelerate the willmaker into the next world so they can benefit from the Will. There’s a basic principle of law that a person can’t benefit from their own criminal actions. The principle runs into difficulty with the case of battered wives who have been abused so much that they kill their husbands in self-defence.
There was a principle that would enable the courts to negate a benefit from the Will in such cases, but that principle cannot be relied on since a recent decision in NSW.