Where there’s a will there is a beneficiary
The following is for general information only. It is not intended to be, nor should it be relied upon as, legal advice.
Most of us understand the importance of having a valid, up to date will, even if we don’t actually have one. If someone dies without a will, there are rules determining who gets the estate and in what proportions, known as the rules of intestacy. Many people are surprised to learn that, in certain circumstances certain people can challenge a valid will and ask the court (that is, a judge) to essentially re-write it; and that if a person dies without a will (in other words dies intestate), certain people can ask the court to vary the distribution that would have occurred under the rules of intestacy. Such an application is often called an application for provision, a TFM claim (short for Testator’s Family Maintenance), or a Part 4 claim (as the power to make provision orders comes from Part 4 of the relevant Act).
As of 1 January 2015 the rules governing who may dispute a will or ask to vary the rules of intestacy in Victoria and in what circumstances have changed.
What do you mean a judge can re-write my will?
Part 4 of the Administration and Probate Act 1958 (“the Act”) gives Victorian courts the power to award funds from the estate of a deceased person for the proper maintenance and support of an eligible person – more on ‘eligible persons’ shortly, for now I will refer to the party disputing the will and making a claim against the estate as ‘the person’ or ‘the claimant’.
There are many factors that the judge must take into consideration before making an order for provision. These factors are set out in the new section 91A of the Act, and are quite extensive. They include:
- the nature and length of the relationship between the person and the deceased,
- the deceased’s intentions as expressed in their will (if any);
- the size and nature of the deceased’s estate;
- the person’s own financial capacity and needs, their age and any disability they may have;
- the financial capacity, needs, age and any disability of any other beneficiaries to the estate;
- whether the person made any contribution to the deceased’s estate, the deceased’s welfare, or the welfare of the deceased’s family;
- any benefits previously given by the deceased to the person;
- the effects a provision order would have on the amounts received by other beneficiaries; and
- any other matter the court considers relevant.
The factors set out in the new section 91A of the Act are comparable to the factors prescribed in the previous version of the Act, and as such, claimants and courts alike should feel confidant drawing on case law that examined these concepts in the past. The main differences surround the definition of ‘eligible person’.
Who is an eligible person?
The changes to the Act introduce the term ‘eligible person’. In the previous iterations, the Act referred to ‘a person for whom the deceased had responsibility to make provision’. The court would determine whether or not the deceased had such a responsibility towards the claimant by taking into account the factors discussed above.
Under the new provisions, only an ‘eligible person’ person may apply for a provision order*, and the court must be satisfied that the applicant is an ‘eligible person’ before considering whether to make an order for provision, and if so, in what amount. If you are not an ‘eligible person’ you are not allowed to apply at all – a major shift away from the previous regime.
Eligible person is defined as:
- the spouse or domestic partner of the deceased at the time of the deceased’s death, where ‘domestic partner’ includes same-sex and same-gender partners;
- a child of the deceased (biological or adopted), stepchild of the deceased, or a person who believed themselves to be and was treated as the deceased’s natural child, and who, at the time of the deceased’s death, was
- under the age of 18 years; or
- a full-time student aged between 18 – 25 years; or
- a child/stepchild with a disability as defined in the Act;
- a former spouse or former domestic partner of the deceased who would have been able to take proceedings under the Commonwealth Family Law Act 1975 and is prevented from taking or finalising those proceedings because of the death of the deceased;
- a child, step-child, or person who believed themselves to be a natural child of the deceased not referred to above;
- a registered caring partner of the deceased**;
- a grandchild of the deceased;
- a spouse or domestic partner of a child, step-child, or person who believed themselves to be a natural child of the deceased only if the child/step-child died within one year of the deceased’s death; or
- a person who was at the time of the deceased’s death a member of the deceased’s household (or had been and would have likely been again in the near future had the deceased not died).
What does ‘proper maintenance and support’ mean?
Well, that depends. In determining the amount required for the person’s proper maintenance and support, the court must take into account a range of factors including:
- The degree to which the deceased had a moral duty to provider for the person at the time of the deceased’s death;
- The degree to which the distribution of the estate fails to make adequate provision for the person’s proper maintenance and support;
- If the claimant is an adult who was a child or step-child or believed themselves to be the child of the deceased, and is neither a full-time student aged between 18 – 25 years nor have a disability, the claimant’s capacity to provide for themselves ‘by reasonable means’;
- If the claimant is a registered caring partner, grandchild, spouse of a deceased child/step-child, or member of the deceased’s household, the degree to which the claimant was dependant on the deceased at the time of death.
The amount of provision ordered by the court must not provide more than is necessary for the person’s proper maintenance and support.
If the claimant is a registered caring partner, grandchild, spouse of a deceased child/step-child, or member of the deceased’s household, the amount of provision must be proportionate to the person’s degree of dependency on the deceased at the time of death.
*where the eligible person is under a legal disability and application may be made on her or his behalf by a legally appointed attorney, administrator or other representative. A legal disability may mean being less than 18 years of age, having an intellectual, cognitive, neurological, sensory or physical impairment, or impairment(s) attributable to a psychiatric condition, where such impairments render the eligible person incapable of communication, social interaction, learning, mobility, self-care, or self-management. Legal disability and the appointment of a legal attorney, administrator or other representative will be discussed in upcoming posts.
** “registered caring partner” of a person who dies means a person who, at the time of the person’s death, was in a registered caring relationship with the person within the meaning of the Relationships Act 2008
What does all this mean?
The new rules only apply to cases where the deceased died on or after 1 January 2015. As yet, no cases have been heard by the court, so we can only speculate as to how they will be interpreted and applied.
While no one can ‘rule beyond the grave’ (not even The Doctor), you can takes steps to prevent your family fighting over your earthly wares by talking to them about your wishes now. Some families find a Facilitated Family Conference useful to discuss the difficult subjects of death, inheritance and expectations. Just like in mediation, a Family Conference provides a safe, structured process in which everyone has the chance to speak and to listen.
Call me now on 0411770125 for a free, confidential chat to see if a Family Conference is right for you.
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