More and more people are becoming aware that a Will can be contested, and as each year goes by, there are more and more applications of that nature being made to the Courts. Not everyone is aware of the basic principles that apply and the procedure that must be followed. This lack of awareness can result in such applications being unsuccessful.
This article covers some of those basic principles and the procedure. The comments which now follow apply only to Queensland and relate to where an eligible person has not been adequately provided for in a Will.
Each State and Territory in Australia has its own particular laws, practices and procedures and while there is some similarity between the different jurisdictions, there are a number of important differences, in particular, who is eligible to apply and relevant limitation periods.
An application for provision (or further provision) from the estate of a deceased person is commonly known as a Family Provision Application (FPA). An eligible person’s right to make an FPA is set out in section 41 of the Succession Act 1981 (Qld). In essence, this section permits a deceased’s person’s spouse, child and dependant to apply to the Court and if the Court decides, in its discretion, that adequate provision has not been made in the deceased person’s Will for the proper maintenance and support of the eligible applicant, the Court can then order that such provision as the Court thinks is appropriate be made out of the estate for the eligible applicant.
Addressing some of the basics:
1. Who can apply?
- As noted above, section 41 refers to a deceased person’s spouse, child or dependant as being eligible to apply.
- “Spouse” includes not only the deceased person’s husband or wife, but also the deceased person’s de facto partner and registered partner. To qualify as a de facto partner, the applicant and the deceased must have lived together as a couple on a genuine domestic basis for a continuous period of at least two years ending on the deceased’s death. Disputes can arise as to whether or not a person qualifies as a de facto partner, particularly when many aspects of the relationship are of a private nature.
- “Child” includes both persons under and over the age of 18 years and also includes stepchildren.
- Only limited categories of dependants can apply.
2. Time periods
There are two time periods to be aware of:
- Court proceedings must be commenced within a period of nine months from the deceased’s death. Written notice of such commencement must also be given to the executor within that time period.
- If the Court proceedings have not been commenced within six months of the deceased’s death or written notice of a person’s intention to commence proceedings has not been given to the executor within that period of six months, the executor is then able to distribute the estate pursuant to the Will and once the estate is so distributed, it does not then matter if the Court proceedings are subsequently commenced still within that period of nine months as there is no estate left for the Court to deal with.
Therefore, it is essential that an intended applicant gives written notice as soon as possible after the deceased’s death and within the period of six months from the deceased’s death. Doing so ensures that the intended applicant has up until the period of nine months from the deceased’s death to commence proceedings.
3. What can a Court deal with?
- In an FPA, all that the Court can deal with is what comprises the deceased’s estate at the date of death, together with any assets that are paid or transferred to the estate after the date of death.
- There are a number of assets that either may or may not form part of the estate. These include an interest held by the deceased person in a jointly owned asset, superannuation proceeds (including any associated life insurance) payable as a consequence of the deceased’s death and assets owned by a company or trust.
- It is essential to ascertain (at an early point in time) what the assets and liabilities of the estate are and their respective values, as they can have a major bearing on the proposed FPA. While the deceased may have appeared to be wealthy, they may not hold much, if any, in their own name.
4. Costs
- A very common misconception is that, irrespective of the outcome of an FPA, all of the applicant’s costs will be paid out of the estate. That is incorrect. An applicant must pay their own costs and will only have their costs paid (wholly or partly) out of the estate if that is agreed with the executor on behalf of the estate or if a Court orders that to happen. If the applicant is ultimately successful, it is often the case that their costs will be paid out of the estate. But, if the applicant is unsuccessful, not only is it possible, if not likely, that they will have to pay their own costs but they may also have to pay the estate’s costs in responding to the FPA.
- Where the estate is relatively small in value, even if the applicant is successful, the Court may not be prepared to order that the applicant’s costs be paid out of the estate. The awarding of costs is ultimately up to the discretion of the Court.
5. Evidence
- In an FPA, evidence-in-chief is given in affidavits. Both the applicant’s and the executor’s respective initial affidavits must contain prescribed information as set out in the Court’s Practice Direction.
- It is very important that the applicant’s affidavits be prepared properly and sufficiently. If they are not, it could impact the prospects of the FPA being successful and could even result in the FPA being dismissed at an early point in time.
6. Obtain early advice
- It is very important that a person who is unhappy with a Will obtain proper professional advice at an early point in time and as soon as conveniently possible after the deceased’s death.
- A substantial amount of information and documents are likely to be required and sufficient time should be allowed for that to happen.
- An intended applicant needs to be realistic as to their prospects of success and the costs to be incurred. Invariably, there will be a conflict in the evidence that is given and it can be difficult to obtain corroborative evidence.
- An intended applicant cannot assume that:
- it will simply be a question of how much they receive;
- at some point in time, the FPA will be settled in their favour. While it is required that the parties to an FPA participate in some form of alternative dispute resolution (often a mediation) before a final Court hearing and determination can take place, and while many FPAs are settled without the need for such final Court hearing and determination, no guarantee can be given that will be the case; and
- if things do not go to plan, it will be an easy process to “walk away” without any costs ramifications.
For more information or discussion, please contact Special Counsel, Greg Cox from our Estates and Succession team.