Negotiations In Deceased Estate Matters: Family Provision Claims

What is a family provision claim?

A family provision claim is a dispute of the Will of a deceased person, on the basis that the Will-maker did not adequately provide for a person for whom they had a moral obligation to make proper provision. This may be because they were left out of a Will or left a smaller provision than expected. There are limitations on who can apply, and the timeframe in which they can make a claim.

Who can make a family provision claim?

Who can apply depends on the law of the State of Territory where the claim is considered. Each jurisdiction has its own definition of an ‘eligible person’ for a claim. This can be found, for example, in:

• Sections 57 and 59 of the Succession Act 2006 for NSW
• Sections 7 and 8 of the Family Provision Act 1969 for the ACT

Generally, eligible people include partners and children. Sometimes they also include ex‑partners, grandchildren or stepchildren of the deceased depending on the factual circumstances and nature of the relationship.

When can you make a family provision claim?

There are also time limitations on making a family provision claim, which differ between the States and Territories. In New South Wales, a claim must be filed within twelve months from the death of the deceased, unless the Court permits an extension of time which is rare. In the Australian Capital Territory, an application must be made within six months from Probate being granted, unless the Court permits it out of time.

What does the Court consider?

When a family provision claim is put to a court, it considers a range of factors to establish if the deceased had a moral obligation to provide for the person making the claim. These commonly include:

• The relationship between the applicant and the deceased
• The nature of any obligation owed to the applicant
• The nature of the estate
• The circumstances, including financial, of the applicant and all beneficiaries
• The adequacy of any provision made in the Will
• The testamentary intentions of the deceased
• What contributions the applicant made to the estate of the deceased person

None of these factors, on their own, is going to determine a claim. You should always get competent legal advice about the prospects of your claim when considering the factors above.

 

Why should I mediate a claim?

All family provision claims are likely to go through alternative dispute resolution before the claim is heard by the Court. This is usually in the form of a mediation. Mediation refers to a facilitated discussion where an independent third party, the mediator, assists the parties to find a solution to the dispute through discussion and questioning.

There are many benefits of settling a family provision claim in mediation:

• Mediation is cost-effective, and quicker than the courts because the parties know with certainty what the outcome is immediately;
• Settlement of the dispute permits the finalisation of the administration of the estate without the wait for a contested Court hearing;
• Reaching a negotiated resolution could maintain relationships between the parties, who are often family members – avoiding the pain of a Court hearing with cross-examination and a public judgment about your family;
• When negotiating, you have greater flexibility to fashion a solution as the court is bound by what is in the legislation as to how it can resolve the matter, whereas there might be alternatives that are acceptable to everyone to resolve the matter when dealt with at mediation.

 

What Is the Process?

In the case of a family provision claim, initial negotiations can begin as soon as the applicant gives notice to the administrator/executor of the estate that they intend to make a claim for provision or further provision. Though not considered mediation, exchanging offers at this early stage can help parties understand the other’s position.

Once an applicant has commenced court proceedings, they are required to put on evidence which summarises their claim on the estate – which requires their circumstances (including their financial position) to be set out. The administrator also has to set out in evidence what the estate contains so the parties know what there is to negotiate over.

Many courts require that the parties then attempt a mediation, or informal settlement conference, before the matter can proceed further:

• In the ACT the parties must attempt to resolve their dispute through mediation before they can set a date for a court hearing.
• In NSW, the Court has stated that “Unless ordered otherwise, all proceedings involving a family provision application will be referred to mediation”.[1]

The parties agree on a time, place and location for the mediation. Some mediations are conducted on Zoom or Microsoft Teams or Skype – for convenience, or because the parties do not want to be in the same room. This is another advantage of mediation – the parties do not have to confront each other if that will just cause more difficulty reaching agreement.

They also agree on a mediator (or to not have a mediator). Sometimes the Court will permit a “Court-annexed mediation” where a registrar of the Court acts as the mediator to facilitate the discussion.  There are also “judicial settlement conferences” where a judge, who will not hear the matter at final hearing, will assist the parties to try to resolve their differences.

 

How does it work on the day?

On the day of the mediation, the opening session will usually involve the mediator explaining the process, and their role as facilitator: crucially, the mediator is there to help the parties consider options, not make a decision. Each party can then make an opening comment. Following that, there are structured negotiations led by the mediator, going between the parties and their representatives.

 

What happens then?

If the parties come to an agreement, the next step is to sign a formal settlement agreement. This is a written agreement that sets out the terms agreed during the mediation. In order to finalise the settlement, the parties must provide their agreement and proposed orders to the court. The court then considers and approves these orders to end the court case and claim.

If the parties cannot reach an agreement, they must tell the court that they attempted to negotiate but were unsuccessful in finding a resolution. The court will then continue the conduct of the matter – further evidence, and setting a hearing date to proceed with the claim.

 

What this means for you

At Chamberlains we have specialist lawyers who have extensive experience contesting Wills, as well as defending estates, to ensure you are provided with effective and personalised estate litigation advice.

[1] New South Wales Supreme Court, Practice Note SC EQ 07 – Family Provision, 2 December 2013, para 10.