Contesting a Will

Challenging a Will in NSW

Treated unfairly?

What is a family provision claim?

Have you been unfairly left out of a Will, received less than your fair share of a deceased estate, or received nothing from an estate?

Sometimes a family dispute becomes so heated that a person cuts a family member out of their Will.

Family provision in the Succession Act 2006 (NSW) throws a wrench into plans to disinherit a person by allowing eligible persons to apply for better provision.

If you are an eligible person who has been left out of a Will or you believe that you have not received your entitlement from a deceased estate and you have the requisite financial need, provided the estate has sufficient assets, you may be entitled to file a family provision claim against the estate.

You must satisfy the Supreme Court of New South Wales that the Will does not make adequate provision for their maintenance, education, or advancement in life.

Who can contest a Will?

A person may contest a Will if they are an eligible category of person (an eligible person) (Succession Act 2006 (NSW)).

Eligible persons are:

Spouses;
Former Spouses;
De facto partners living with the deceased when they passed away;
Children, including adult and adopted children (and step children who were dependent on the deceased);
Grandchildren and members of the deceased’s household who were dependent on the deceased (which may include the deceased’s parents); and
someone who lived in a ‘close personal relationship’ with the deceased when they passed away.

Location of Assets

Generally, to make a family provision claim in NSW the deceased must have lived either:-

in NSW at the date of their death and owned assets in NSW; or
elsewhere but have owned assets in NSW.

When can a Will be challenged?

A testator’s right to distribute their estate as they see fit is subject to legislation intended to protect those for whom the deceased had a ‘moral responsibility’ to provide. A Will may be challenged when an eligible person feels that the Will-maker (the testator) failed to meet this responsibility based on grounds recognized by law.

It’s preferable to challenge a Will before probate is granted, but it’s possible after a grant has been made.

What does the court consider?

Section 60(2) of the Succession Act 2006 provides that the Supreme Court of NSW sets out what the court may consider in determining whether to make a family provision order.

Is there a time limit?

A family provision claim must be filed within a year of the deceased’s passing unless there are special circumstances. It applies only to property that would have been legally included in the deceased estate at the time of death.

If an application is made out of time, the Supreme Court of NSW can grant an extension of time to apply if the applicant gives the court sufficient justification, excuse or explanation.

Do I have to go to court?

Whenever possible, family provision disputes are resolved through a settlement agreement or mediation. However, if mediation and negotiation fails, you must commence court proceedings.

What might I receive if my challenge succeeds?

If you successfully contest a Will, the court will set it aside.

Legally it will be as if the Will never existed and the estate will be distributed according to the second-to-last Will.

If no other Will can be found, the estate is divided according to the intestacy rules in the Succession Act 2006 (NSW). In that event, the provision made for relatives and dependents is determined by who survived the deceased.

Who pays for my legal costs?

The Judge ultimately decides who pays the legal costs in family provision proceedings. If your challenge succeeds, the Judge normally orders that the estate pays your legal costs.

If, however, the Judge makes no order for provision for the applicant, the applicant may be ordered to pay the executor’s costs in defending the estate.

What is Notional Estate?

What is a notional estate claim?

A notional estate claim is an application to the Supreme Court of NSW by an eligible person to re-acquire into the estate assets that the deceased disposed of in the three years before their death. The intent is to prevent someone from trying to circumvent a family provision order by gifting their assets away before their death.

The Succession Act 2006 (NSW) allows the court to designate an asset that is not currently part of the deceased estate as “notionally” part of the deceased estate. Notional estate encompasses all types of assets, including life insurance and superannuation.

A notional estate claim is only possible if a family provision order has already been made. A notional estate order can be made after probate has been granted and the estate distributed (sec 79 Succession Act 2006).

The estate must have insufficient assets, or there must be other eligible claimants to a family provision order, or “special circumstances”.

The property must have been transferred to someone else without appropriate financial recompense.

An asset may also be notional if it is held in a structure that is not included in the estate because of the deceased’s omission or failure to act but is still effectively controlled by the deceased.

Disadvantage requirements

There must be evidence that:

the transfer disadvantaged the deceased, the claimant, or a principal party to the transaction; or
someone’s action or inaction prevented the claimant, deceased or a principal party from benefiting.

Other considerations

Once the court designates an asset as notional estate property, it will be dealt with as if it is actual estate property. A notional estate order extinguishes the rights of the former property owner to the extent outlined in the order.

Time limits

A notional estate claim can only apply to a transaction:

in the last year of the deceased’s life, when the deceased’s moral obligation to adequately provide for the claimant was more significant than the moral obligation to engage in the transaction; or
within three years before the deceased’s death, with the intent to limit provision for eligible claimants; or
after the deceased’s death.

How do I get a copy of the Will?

Your first port of call for a copy of a Will should be the executor or the solicitor acting for the estate.

Persons entitled to inspect or be given a copy of a Will are:-

Anyone entitled to a share if the deceased died intestate;
Any parent or guardian of a minor referred to in the Will or who would be entitled to a share if the deceased died intestate;
The deceased’s parent or guardian;
Anyone who may have a claim against the deceased;
The deceased’s surviving spouse, de-facto or issue;
Anyone with management of the deceased’s personal estate immediately before death;
Anyone named or referred to in an earlier Will as a beneficiary;
An attorney under the deceased’s enduring power of attorney;
Anyone named or referred to in the Will; and
Anyone belonging to a class of persons prescribed by regulations.

What is disentitling conduct?

Disentitling conduct and family provision claims in NSW

Family provision claims can be resisted on the grounds of moral wrongdoing by the applicant.

The court can consider a broad range of conduct and character traits. It may refuse to award a person a benefit or reduce the benefit received.

Any exclusion or reduction will depend on:

the extent of the person’s financial need;
the severity of the disentitling conduct; and
whether the general public would consider such conduct unreasonable.

Statements in the Will

A Will-maker (a testator) can state in the Will that they wish to have a child removed from provision under the Will. Or they can make a statement held with their Will explaining their lack of provision for a person.

Signal of dementia

Testators in the early stages of dementia often allege disentitling conduct shortly before being formally diagnosed with dementia. Analysis can reveal such an allegation to be unreasonable. The testator may still possess the legal capacity to make a Will but their dementia may discount an allegation of disentitling conduct.

What are the effects of disentitling conduct?

Even if disentitling conduct is proven, it may be insufficient for the court to refuse to make provision for an applicant. Disentitling conduct may be insufficient to entirely remove provision for the applicant, but may be taken into account in determining an adequate and proper provision for the applicant.

Financial Needs (NSW)

One criteria against which the Supreme Court of NSW assesses family provision claims is the claimant’s financial need. It is important that a claimant prove financial need: it is not enough to simply claim that they are experiencing financial need. A claimant should be able to account for their finances, income and expenses, and these circumstances should show a need for greater financial provision.

Family provision claims in NSW

A claimant needs to establish that there is inadequate provision in the Will for their proper maintenance, education and advancement.

They must provide proof of their financial need to enable the court to determine the adequacy of the provision for them in the Will.

Financial Need

The court may only award an amount commensurate with the claimant’s proper support and maintenance (Succession Act 2006). A claimant must establish financial need by disclosing their assets, liabilities, sources of income, expenses and financial resources .

The court relies heavily on independent evidence of finances, such as bank statements.

Financial need is both relative (i.e. different claimants’ competing needs) and objective (i.e. whether the claimant can meet their daily needs).

If a claimant does not provide evidence of financial need, their claim is unlikely to succeed.

What is client legal privilege?

Client legal privilege (also known as legal professional privilege) is a common law right that allows you to obtain confidential legal advice. The privilege:-

protects communications about potential litigation (litigation privilege) and legal advice (advice privilege);
protects clients’ rights; and
facilitates the administration of justice.

Client legal privilege belongs to the client. Information covered by client legal privilege may only be disclosed if the client instructs the lawyer to do so.

Clients’ rights

Lawyer-client privilege is based on the right to privacy and protection from the state.

Administration of justice

The administration of justice requires clients to be able to speak freely to their lawyer and to disclose everything relevant to the advice they seek.

Legislation

Section 118 of the Evidence Act 1995 (Cth) sets out the common law right to client legal privilege. It provides that evidence is not to be given if adducing it would result in disclosure of:

a confidential communication between lawyers acting for clients; or
a confidential communication between a client and a lawyer; or
the contents of a confidential document prepared by the client or the lawyer

for the dominant purpose of a lawyer providing legal advice to a client.

Section 119 of the Evidence Act provides that a client may object to evidence being adduced if it would result in any of the above being disclosed.

What does client legal privilege mean?

Client legal privilege means that:

confidential communications between clients and lawyers cannot be compulsorily produced in court or in response to a subpoena; and
a lawyer may only disclose privileged information to a third party if the client has specifically authorised them to, or if privilege has been waived, lost, or does not apply.

A client can implicitly or expressly waive client legal privilege.

Illegal purposes

Client legal privilege does not cover communications made for improper or illegal purposes.

Statutory exclusions

Legislation can alter or remove client legal privilege.

What is a deed of family arrangement (NSW)?

A deed of family arrangement is a document that legally changes the way a deceased person’s assets are divided amongst beneficiaries. It can either change the terms of a Will or change the distribution of a deceased person’s assets if there is no Will.

It can also provide the legal personal representative of the estate (the executor or administrator) with protection from any future claims.

For a deed of family arrangement to be valid, it must be:

signed by the legal personal representative; and
signed by and have the consent of all the beneficiaries (over 18 years of age) entitled under the original Will or the rules of intestacy.

When would I need a deed of family arrangement?

Circumstances in which a deed of family arrangement may be useful include:

When the beneficiaries wish to change the terms of the Will.

A deceased person’s Will may sometimes need to be changed to suit the beneficiaries’ circumstances. A deed of family arrangement allows the beneficiaries to change the distribution of assets to better suit their needs.

When someone dies without a Will, the distribution of their assets is determined by a formula set out in the Succession Act 2006 (the rules of intestacy).

In NSW, the deceased’s spouse entitlement includes money from the estate gifted to the spouse (a ‘CPI adjusted legacy’). This is an automatic entitlement, regardless of how much the estate is worth.

If the deceased had adult children with families of their own, a deed of family arrangement could be used to reach an agreement where all of the deceased’s immediate family could be left something.

When an ‘eligible person’ wishes to challenge a Will

If a spouse, child, former spouse or a dependent has not received anything or feels that they have not received enough from the Will, they may be able to launch a family provision claim in court. This can take years to resolve and can be extremely expensive.

A deed of family arrangement can avoid court proceedings by allowing the aggrieved people together with the other beneficiaries to design a new plan for the distribution of the assets that everyone is happy with.

When can a deed of family arrangement not be used?

A deed of family arrangement cannot be used to reduce the entitlement of someone under 18 years, or for a person lacking mental capacity (e.g. with an intellectual disability): this would require a Court order.

Is Capital Gains Tax (CGT) Payable?

Section 128.20 of the Income Tax Assessment Act 1997 (Cth) exempts the passing of an asset to a beneficiary of a deceased estate from payment of capital gains tax (CGT).

A deed of family arrangement is covered by this exemption only if it is used to settle a claim to participate in the estate (such as a family provision claim). If the deed does not meet the requirements of the ATO ruling TR 2006/14, CGT may apply.

Is stamp duty payable?

There may also be stamp duty issues to consider when writing a deed of family arrangement.

Generally, an estate asset is either exempt from stamp duty, or the duty payable is very low (e.g. $100 in NSW).

In NSW, stamp duty liability as a consequence of transferring assets using a deed of family arrangement is only on the amount by which those assets exceed the value of assets the beneficiary would have received under the Will or the intestacy rules. (s63 of the Duties Act 1997 (NSW))

Where to now?

if you are eligible to challenge a Will
the likelihood of a challenge succeeding,
a range of the likely costs of a challenge, and
the likely range to be awarded.

We can represent you in initiating a family provision application in the Supreme Court of NSW.

Challenging a Will in NSW

On this page:

Treated unfairly?

What is a family provision claim?