What if gifts to adult children are not equal?

One of the main ways to challenge a Will is by making what is known as a family provision claim. The recent case of Scott v Scott is an example of a successful claim being made by an adult child in New South Wales where that child received less than her sibling.

 

What is a Family Provision Claim?

A family provision claim can be made by an eligible person if they believe that the deceased’s Will has not made an adequate provision for their “proper maintenance, education or advancement in life” (see e.g. Succession Act 2006 (NSW) s 59 and Family Provision Act 1969 (ACT) s 8)

Who qualifies as an ‘eligible person’ depends on the State or Territory that you are in. In New South Wales, it includes a spouse, de facto partner, a child, a former spouse in certain circumstances, and someone who was dependent on the deceased or living in a close personal relationship with them at the time of their death. This can include dependent step-children and even grandchildren.

A court will consider several factors when determining whether the applicant was ‘adequately provided’ for in the will. These factors include, but are not limited to, the following –

• The nature and duration of the relationship between the deceased and the person making the claim (known as the applicant or claimant);
• The nature and extent of the deceased’s estate, including assets and liabilities of the estate;
• The earning capacity and financial needs, present and future, of the applicant;
• Any financial or other contributions of the applicant to the acquisition, maintenance, or improvement of the deceased’s estate or to the welfare of the deceased person;
• Evidence of testamentary intentions, including statements made by the deceased person; and
• The character and conduct of the applicant before and after the death of the deceased.

 

A recent Court decision; Scott v Scott [2021] NSWSC 1619; [2022] NSWSCA 182

In 2021, Coralynne Scott made an application for family provision against the estate of her late mother, Coral Scott, who died in July 2019. Coral left 3 children; two daughters and one son.

Two months before her death, Coral Scott executed a new Will. The 2019 Will appointed Charlene, her youngest daughter, as her sole executor and trustee. The Will left Coral’s house in Fairfield (the main asset of the estate) to Charlene and gifts of $40,000 each to Coralynne and the deceased’s son, with the rest of the estate divided equally among the three children.

Coral and her two daughters had lived in the Fairfield property for significant periods of time. Coralynne had lived at the home for most of her life, except for a period between 1977-1979, and until the deceased’s death. Charlene had also lived in the home most of her life.

Coralynne had built up cash savings including from compensation claims from injuries she suffered from multiple car accidents. Before that, she was employed full-time and lived frugally. She had several health conditions and demonstrated present and future needs.

She provided assistance to her parents over the years, including –

• in 1992 where she assisted her father to pay off the mortgage through taking out a personal loan; and
• paying for renovation work (without reimbursement) to the home to make it more accessible for the deceased.

In 2019, Charlene contacted a lawyer to prepare an updated Will and testamentary statement for the deceased. Both Charlene and Coral were in contact with the lawyer regarding the terms of the documents. In giving evidence, Charlene stated that she had “drafted up” some of her mother’s testamentary statement. The Court did not look upon this favourably.

The trial judge weighed the following factors in determining whether or not an adequate provision for Coralynne had been made –

• The considerable assistance Coralynne provided to her parents, including financial support, care and emotional assistance; and
• The fact that the deceased inherited the Fairfield property herself from the estate of her late husband pursuant to mirror wills made in 2015.

This combination of factors, and the unfavourable circumstances under which Coral’s 2019 will were made, led to Justice Parker concluding that the provision for Coralynne was not adequate and he awarded her additional provision. Charlene appealed this decision in the NSW Court of Appeal, but her grounds of appeal were dismissed with costs.

You might be eligible to make a family provision claim to challenge a Will if you have not been adequately provided for in a loved one’s Will. Our estate litigation specialists in the Private Wealth Law team at Chamberlains can assist you.