DISINHERITED AND DISAPPOINTED? ESTATE CLAIMS BY ADULT CHILDREN

What does the Supreme Court consider when an adult makes a claim for family provision from their parent’s estate where they have either been excluded from a Will, or left what they consider to be an inadequate inheritance?

In any family provision claim, the role of the Court is not to achieve overall fairness in the inheritance of the deceased’s estate.

The Court’s role is not to correct a sense of wrong or hurt feelings where a claimant considers that he or she has been treated unfairly, or to reward any meritorious conduct.

The Court’s role is not to ask “how would I have made a Will had I been the deceased?

The Court’s role is only to make “adequate” provision for “proper” maintenance, education and advancement in life of an applicant if the Court finds that adequate provision has not been made in the Will. The Court does not “remake” the Will.

What matters does the Court take into account?

There are no special rules that apply to adult children, whether they have been excluded from the Will altogether, or have received an inheritance which they consider to be inadequate.

However, the Courts recognise that the consideration of relevant facts may be different having regard the differing nature of the relationship between that of a minor child/parent and an adult child/parent.

The adult child’s own disappointed or hurt feelings at being excluded from a Will are not relevant to the Court’s determination.

In determining the adult child’s claim, the Court will take into account a wide variety of circumstances, including:

  • The adult child’s financial and health needs. An adult child who is already of substantial financial means will not necessarily prevent a successful claim
  • The financial and health needs of any competing claimants, and of those who have inherited under the Will
  • The deceased’s moral obligations to provide for other people, including to the exclusion of the adult child
  • The size of the estate (as determined at the date of hearing, and not when the Will was made, the date of death or the date of commencement of legal proceedings)
  • The relationship between the adult child and the deceased, including reasons for any estrangement or an explanation for the adult child’s exclusion from the Will
  • Whether the adult child has had the benefit of provision during their lifetime from the deceased (for example, paying for university qualifications, providing employment or other financial support)
  • Whether the adult child has contributed to the deceased’s assets (for example, working in the deceased’s business for little or no reward)
  • The deceased’s freedom to generally leave their property in their Will as they wish. In considering any claim for family provision, the Court accepts that the deceased must be regarded as the best judge of the significance of lifetime events leading to how the deceased’s estate should be distributed[I]

The deceased’s own statements for explaining the Will

  • Commonly, a deceased person will prepare written reasons regarding their decision to exclude an adult child from their Will. This can be done within the Will itself, or as a separate document.
  • The Court may take into account, in determining a claim, the deceased’s own reasons why they have disposed of their estate in a particular way.
  • The written reasons may “cast light on the relationship” between the person and the deceased, at least from the deceased’s perspective.”[ii]
  • However, the Court is not required to accept the written reasons unquestionably or uncritically as true[iii].
  • It is often difficult for a Court to determine whether an estrangement between an adult child and the deceased is solely the fault of either. The Court is less concerned with “fault”, but rather whether the adult child has been left with “adequate” provision in all the circumstances for their “proper” maintenance, education and advancement in life.

Piercy v Douras [2019] NSWSC 1013 (9 August 2019)

  • A recent Supreme Court family provision claim, Piercy v Douras, concerned a claim by an adult son, who had been excluded from the Will, and was estranged from the deceased. The estate has been left entirely to the deceased’s widow who was his second wife.
  • The Court found that the statement of reasons, written when the adult child and the deceased were completely estranged, appeared to attempt to justify excluding the adult child from the Will and did not represent an accurate reflection of their relationship over the years.
  • The Court described the statement of reasons as “emotive and vitriolic” and confirming “the desire of the deceased to fully provide for [the widow] to the exclusion of [the adult son] and the deceased’s view of his relationship with [the adult son] at the time it was made. It is of no weight as evidence of [the adult son’s] conduct and character over the years.
  • The Court found this was not a case where the estrangement with the deceased disentitled the adult son from making a claim for provision.
  • However, in circumstances where the value of the estate had diminished significantly since the deceased’s death, and the widow had low prospects of future employment and very few assets, the deceased had a good reason for excluding the adult son from his Will.
  • No provision for the adult son was made by the Court, with the Court finding he was able-bodied, healthy, owned his own business which was providing a stable income, and providing a comfortable lifestyle for his family.
  • The Court noted the outcome may well have been different if the value of the estate had not diminished significantly since the date of death.
  • The Court also decided that the overall justice of the case required that no order should be made for the adult son to bear the burden of the estate’s considerable legal costs, even though his claim had been unsuccessful.

Judicial statements concerning estate claims by adult children

  • Community views almost certainly differ as to whether parents have “a moral or natural obligation” to provide for able-bodied adult children[iv].
  • The community does not expect a parent to look after an adult child for the rest of that child’s life and into retirement.
  • If an adult child remains a dependent of a parent, the community usually expects the parent to make provision to fulfil that ongoing dependency after death.
  • Where a child, even an adult child, falls on hard times and where there are assets available, then the community may expect parents to provide a buffer against contingencies.
  • Where a child has been unable to accumulate superannuation or make other provision for their retirement, something to assist in retirement where otherwise they would be left destitute.
  • An adult child does not need to establish a “special need” before obtaining provision from the estate of a deceased parent.[v]
  • The adult child’s lack of reserves to meet demands, particularly of ill health, which become more likely with advancing years, is a relevant consideration.[vi]
  • Estrangement or even hostility between the deceased and a claimant does not terminate the obligation on the deceased to provide for the claimant.[vii]

How we can help

Samantha Peterson, Partner, has extensive litigation experience in all types of estate litigation on behalf of executors, beneficiaries and claimants.

Peter McLachlan, Partner, and Suzanne Young, Special Counsel, are experienced in all aspects of estate planning, trusts and estate administration as well as estate litigation.

If you would like more information, please contact us on (02) 9229 2222 or

speterson@mtpartners.com.au

pmclachlan@mtpartners.com.au

syoung@mtpartners.com.au 

[i] McDonald v O’Connor [2019] NSWSC 261 at [220]
[ii] McDonald v O’Connor [2019] NSWSC 261 at [173]
[iii] Benham v Benham [2004] NSWSC 416 at [81]
[iv] Hastings v Hastings [2010] NSWCA 197 at [20]
[v] Taylor v Farrugia [2009] NSWSC 801 at [58]
[vi] McDonald v O’Connor [2019] NSWSC 261 at [283(e)]
[vii] Foley v Ellis [2008] NSWSC 288 at [101]
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