Trusts / Asset Planning

Who do you have to provide for when you die?

 

Family Protection Act

For the most part, while you are alive, you can choose what you do with your property. However, people often do not realise that when you die, the law recognises a ‘moral duty’ to certain family members. It also offers remedies for those family members if you do not sufficiently provide for them on your death.

Potential Claimants

The Family Protection Act 1955 specifies who can make a claim for provision from a deceased’s estate. These people are:

  • A spouse or civil union partner of the deceased.
  • A de facto partner who was living in a de facto relationship with the deceased at the date of his or her death. [Note that in a recent case, the Court found that parties were in a de facto relationship despite living together for less than three years and having no shared finances, going on to make an award to the surviving partner under the Family Protection Act.]
  • The children of the deceased.
  • The grandchildren of the deceased living at his or her death.
  • The stepchildren of the deceased who were being maintained wholly or partly, by the deceased immediately before his or her death.
  • The parents of the deceased.

The purpose of this provision is to protect children or other family members from:

  • being disinherited;
  • one child being favoured over another;
  • a de facto partner or spouse being left with no or insufficient funds to continue the life they would have had while the deceased was alive.

While this can provide useful protection for some, every family circumstance is different and there is sometimes good reason to provide unequally to your family, or to leave someone out altogether. For example, a parent may wish to leave more to one child because their needs are greater; or they may have provided more generously for one child during their lifetime and intend to even things out in the distribution of their estate. Or it may be that there has been a serious falling out with a certain family member, and a will maker may simply not want to provide for that person.

All these reasons can be valid but how do you protect your wishes after your death?

What happens in the event of a claim against your estate?

The Court will consider a range of circumstances when reviewing a Family Protection Act claim, including, but not limited to:

  • The size of the estate.
  • The economic circumstances of the claimant.
  • The state of the relationship between the claimant and the deceased.
  • The circumstances of competing moral claims (ie other people who are entitled to claim) and even the behaviour of the claimant.

Even if the Court considers that a moral duty owed to the claimant has not been fulfilled, it retains a discretion as to what, if any, award to make.

How to secure your intentions

With all of that in mind, there are certain things you can do to protect your estate from such claims. For example:

  • When thinking about what you would like to happen with your property when you die, consider the needs of each of your family members and their degree of financial reliance upon you.
  • Talk to your family and discuss with them your intentions before making your will.
  • When you meet with your solicitor to make your will, discuss these issues with them and explain why you have made the decisions you have reached.
  • If you have made a decision that you think may be subject to a claim, it can be wise to leave a letter in your solicitors will file, which sets out the reasons for the decisions you have made.

 

 

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