When a Will Falls Short on Providing Adequately For You

Thoughtful young lady reading while traveling by train.

It is by no means a rare case that a Will falls short of making proper provision for one or more of the beneficiaries.

In this audio podcast, experienced estate litigation lawyer, Edward Finn discusses the relevant area of law, Part IV claims.

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Interviewer:  Edward, thanks for joining me.

Edward:  You are welcome, Dan.

Interviewer:  Edward, what are Part IV Claims? 

Edward:  A Part 4 Claim is a Claim brought by someone who has either been excluded or inadequately provided for by a deceased Will. 

The term Part 4 arises from the section of the Administration and Probate Act, which expressly deals with its Claims.  Now, it is often referred to as an Estate or Will Challenge. 

Interviewer:  Okay, so who is eligible to bring one of these claims?

Edward:  Well, when the date of death is prior to the 1st of January 2015, any person to whom the deceased had a responsibility to make provision for may bring a claim.  Now, that is not defined by any particular category of claimant. 

Whereas for estates where the date of death is on or after the 1st of January 2015.  There are defined categories of eligible persons who can bring a claim.  Now, these categories include a spouse or domestic partner of the deceased at the time of the deceased death.  A child or a step-child of the deceased.  A child or step-child who at the time of the deceased death was under 18.  A full-time student, age between 18 and 25 or under a Disability.

There are also some other categories such as former spouses and domestic partners, a registered caring partner, and members of the deceased household. 

Now, there are some additional requirements on certain categories of claimants.  I would be happy to go through those in more detail later in the podcast with you, Dan.

Interviewer:  Great.  It is sort of an emotional driver I suppose that underpins many of these types of claims.  Is there like a sense of entitlement or a sense of being missed out, or what is it? 

Edward:  Yeah, there can be.  There is certainly an emotional obligation that a lot of claimants feel.  They might feel unjustly done by, or they might feel that the relationship that they had with the deceased merits some sort of entitlement.

Often, we see adult children of the deceased who have been inadequately provided for.  In particular we quite regularly see elderly Testators who change their will later in life in order to exclude 1 or more of their adult children.  This is probably the main trigger for Estate Claims. 

Interviewer:  Right.  When you use the term Testator that is a person who is constructed the will. 

Edward:  Yeah, that’s right.  Yeah, that’s exactly right.

Interviewer:  How does the law assist Part 4 Claims?

Edward:  The law takes into consideration a range of family relationship and financial circumstances.  These include the relationship between the claimant and the deceased.  As we touched on earlier after the 1st of January 2015 that relationship needs to fall into a certain category. 

The other consideration that are deemed relevant by the court are the size of the estate, as well as the health and financial circumstances of the claimants.  All other things being equal, if a claimant can demonstrate strong financial and/or medical need.  Then their claim will be assessed more favorably. 

The court may also take into consideration the degree to which the claimant is unable to provide adequately for their own maintenance and support. 

For certain categories of the eligible claimants the court must also consider the degree to which a claimant was either wholly or partly dependent upon the deceased. 

Interviewer:  How is this all changed since the introduction of the new legislation earlier this year?

Edward:  Well, the new legislation with the intention of the new legislation was to narrow the potential categories of claimants.  It was really in response to a sizeable increase in the number of claims that the courts were dealing with that were largely fanciful claims.  Those are really  claims on the edges by people who perhaps only remotely knew the deceased and were in an opportunistic fashion.  Bringing a claim to try and access some part of their estate. 

With the new legislation that came in 1st of January that narrowed category of claimants who are entitled to bring a claim.  It also added some additional requirements such as dependency and a requirement that the claimants show that the deceased had a moral obligation  to provide for them.

Interviewer:  Oh, I see okay.  The fact is that a court will consider intercession of claim.

Edward:  Mm-hmm.

Interviewer:  What are those?

Edward:  The court will look into things such as the family relationship, whether it was a close and loving relationship or whether there was  any example of what the court might term disentitling behaviors.  Whether that is abuse or some sort of disconnect between the claimant and the deceased. 

The court may also look at things like obligations or responsibilities of the deceased.  The size and the nature of the estate.  Any mental, physical, or intellectual disability of the claimant.  The age of the claimant.  Their capacity to care for themselves or to provide for themselves. 

Fittings like the character and the conduct of the claimant may also be relevant.  If there has been some breakdown in the relationship between a deceased and a claimant.  The court may look at the reasons for that.  Break down in the relationship. 

The court also has discretion to look at other matters as well.

Edward:  It is .  It is a difficult assessment to make into determining what provision if any should be awarded to a claimant.  Because any provision awarded to someone who has been excluded from a will essentially overrides the will.  The claimant is seeing to  insert themselves as a beneficiary, and the court must assist the merits of their claim against the principles of Testator freedom whereby a Testator and a person making a will is entitled to leave their estate to whomever they choose.

Interviewer:  I see by the most recent research by the University of Queensland and the University of Victoria.  Around 73 percent of all claims are actually successful.

Edward:  The research that came out recently is probably indicative of the nature of the claims that have been brought.  With the recent decisions through the latter half of 2014, the early part of 2015 and the recent amendments.  Certainly been a shift to dissuade people from bringing unrealistic claims.  Perhaps that has had some bearing on the level of success that the claimants have had.

The claims brought by adult children ultimately make up the greatest proportion of the claims brought by claimants.  We see considerable success with claims brought by adult children. 

Interviewer:  Right.  The process to actually issue a claim is it a complicated process?

Edward:  Look.  It’s not particularly complicated.  There are certain considerations that people need to be mindful of.  Things like time frames.  In Victoria claims must be issued within 6 months. Letters of Administration is the process by which an Administrator would apply to Administer an Estate where the deceased dies without a Will. 

In general terms, in order to prepare a claim it is first necessary to prepare material in support of a claim.  That is in a form of either an Affidavit or Position Statement depending on the size of estate.  If the estate is worth less than $500,000 a Position Statement will be used in support of a claim.  Prefer the provision and if the estate is worth in excess of $500,000 then an Affidavit will be drawn.  Proceedings are issued in either the county of the Supreme Court.  We usually attempt to convene in early mediation in these matters in order to  resolve things at the earliest opportunity and to minimize the cost to both the claimant and the estate.

In the event that the estate or the Executor’s aren’t willing to agree to an early meeting.  I imagine the matter will be ultimately referred to a Court-ordered Mediation.  In our experience about 95 to 97 percent of these matters settle at mediation. 

Interviewer:  Yeah, I mean that’s an interesting point because I know many people often may hesitate in making a claim because they may think I don’t want to go to court.  I don’t want to be in the box et cetera.  They have got a perception that court isn’t always going to treat them that well.

Edward:  Yeah, that’s right.  Look, the courts are mindful that there are family relationships involved.  These are ultimately family disputes between family members, often siblings.  The most effective way for these matters to be resolved is usually by mediation.

Interviewer:  Edward, what are the costs associated with a Part 4 Claim?

Edward:  Traditionally costs of the Part 4 Claims have been largely born by the Estate.  There has been some shift away from that in recent cases.  If a claim has merit.  It is deemed to be meritorious then usually the costs will be paid out of the Estate. 

The costs up to and including mediation really depends on the complexity of the matter and the size of the Estate.  In very general terms the costs up to and including mediation might be somewhere between  $15,000 and $20,000.  Again, it really depends on the size of he Estate and the nature of the assets, and whether the matter can be resolved by mediation or needs to go to a full trial. 

Interviewer:  In a practical sense is there an example of a case for example you know that you can offer up that will perhaps you know shed light on how this all works?

Edward:  Sure.  We recently acted for a son of deceased.  He was expressly excluded from the will.  Where his brother was the Executor and the sole Beneficiary.  It was a relatively small Estate of approximately $250,000.  That matter ultimately resolved with our client receiving a substantial of the Estate.  He received in the vicinity of $100,000.  His costs were also paid by the Estate.  That’s an example of relatively common claim.  A claim brought by a child that has been expressly excluded from an Estate and who brings a claim against a sibling who receives the entire benefit of the Estate.  We regularly act in those matters and have seen considerable success in the last few months in several matters similar to that. 

Interviewer:  Great, thanks Edward.

Edward:  You are very welcome, Dan.  Thank you.      

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