How much freedom do you really have when making a Will?
By Felicity Simpson
25 March 2014
You spend a lifetime working hard to accumulate your assets and during this time you acquire certain rights, allowing you to sell, lease and give these assets away as you see fit. It is only natural that most clients expect that they can distribute their assets in any manner they like in their Will, be it passing down the inheritance to their family or donating it to a charity.
Many are surprised to learn that whilst the law recognises that Willmakers have freedom to dispose of their estate as they see fit, there is nevertheless recourse through the Court system for those who can prove that the testator breached their moral duty to make provision for them.
How does it work?
The Administration and Probate Act 1958 sets out that after the Willmaker’s death, a person who thinks they did not receive a sufficient share of the estate may bring a Court action against the estate. They need to show:
- That the Willmaker had responsibility to make provision to that person for the person’s proper maintenance and support;
- Adequate provision for the proper maintenance was not made; and
- The amount of further provision is warranted.
The Court will have regard to a number of factors, including the nature of the relationship, whether the applicant was dependent on the deceased, the size of the estate, the competing claims on the estate, etc.
Who can apply?
Anyone may bring an application as long as they can convince the Court that they satisfy the criteria. In practice, this would generally involve children and spouses, although, as each situation depends on its facts this could involve other claimants (such as grandchildren, de facto spouses residing separately, etc).
What does that mean for willmakers?
Coming back to the topic of this blog, yes you are at liberty to make a Will as you see fit. However when you pass away, claims may be brought against your estate (which delays distribution to the beneficiaries and inevitably eats up funds in the estate).
Situations where some thought should be given to these provisions may be:
- When you have been in a long term relationship but are not leaving a substantial part of your estate to your spouse. The courts are generally sympathetic to partners who have insufficient funds for maintenance or have received a life interest in a property which does not allow them to sell the property and use the proceeds.
- In a blended family situation. It can be difficult to find a balance between making provision for children from a first marriage, ensuring the current spouse will be cared for in old age and possibly leaving something for children/step-children from the second relationship.
- Where one child is deliberately omitted. The law does not require that all children be given equal distributions, however it is wise to discuss the reasons carefully with your solicitor.
What can you do if you think someone may make a claim on your estate?
- Discuss this with your solicitor. A solicitor familiar with this area will assist you to make an informed risk assessment.
- Articulate in writing the reasons for leaving that person out. This record can be kept together with the Will and be used as evidence where a relationship breakdown has occurred.
- Consider leaving the potential applicant a small portion rather than nothing if the risk of them claiming is high.
- Pass on your estate to your intended beneficiaries during your lifetime or set up a family trust.
For more information please contact Felicity Simpson or a member of our Wills and Estates Team.