Family Provision Claims by Adult Stepchildren
In the recent Victorian Supreme Court decision of James v Rost; Langan v Rost  VSC 98, two adult stepchildren were awarded provision from their late stepmother’s estate. The claimants in the matter were competing against the adult daughter of the deceased. This article summarises that decision and its implications for Family Provision Claims by adult stepchildren.
Family Provision Claims: James v Rost; Langan v Rost
In the matter of James v Rost; Langan v Rost, the deceased passed away leaving one adult daughter, two adult stepchildren and one grandson. The sole asset of the estate was a property valued at approximately $920,000. This property was originally purchased by the deceased, however, during her marriage of 40 years to her late husband, it was transferred into both of their names. After her husband’s death in 2006, the deceased inherited the property by survivorship.
The deceased left a handwritten will which provided that her property and its contents were to be given to her daughter and her grandson jointly, and all of her jewellery was to be given to her daughter, bar one ring which was gifted to her grandson. No provision in the handwritten will was made for the deceased’s two step-children.
Probate was granted on the handwritten will to the deceased’s daughter in her capacity as named executor.
Applicable Principles for Family Provision Claims
This case considered the legal principles governing Family Provision Claims as they were summarised by McMillan J in Re Christu  VSC 162, which confirmed that in order for a person to be given provision from an estate the following needs to be satisfied.
- The applicant is an eligible person;
- That at the time of death, the deceased had a moral duty to provide for the eligible person’s proper maintenance and support; and
- That the distribution of the deceased’s estate fails to make adequate provision for the proper maintenance and support of the eligible person.
In the present case, there was no question that both of the plaintiffs were eligible persons, and that if a moral duty could be established, the deceased would not have made adequate provision for them. The most critical issue to be ascertained by the court was whether the deceased did have a moral duty to her stepchildren.
Inn circumstances where the stepchildren’s biological parent has been the source of part of the deceased’s estate assets, the deceased has historically been found to have had a moral duty.
Once these factors are considered and a moral duty is established, there are also a number of discretionary factors which are considered to determine the quantum which should be awarded to a plaintiff from an estate.
Plaintiff 1’s Family Provision Claim
Plaintiff 1 sought a lump sum payment from the estate of $150,000.
At the time of the trial, Plaintiff 1 was aged 70 and unemployed. Plaintiff 1 had a net asset position jointly with their spouse of $810,000 and $196,883 in superannuation. Plaintiff 1’s income comprised of a pension paid from their superannuation and Centrelink benefits totalling $31,823. Their net asset position was arguably larger than the estate, however they had minimal liquid assets.
While Plaintiff 1 did live with the deceased and his father for 3 years as a teenager, in 1999 a rift developed and Plaintiff 1 had limited contact with the deceased and his father until 2006 when his father got ill. After his father’s passing, Plaintiff 1 did not maintain a relationship with the deceased and was estranged from her at the date of her death.
Plaintiff 1 also gave evidence that while the original purchase of the property was financed by the deceased, his biological father made significant contributions to the sole estate assets including mortgage repayments and renovations.
Plaintiff 2’s Family Provision Claim
Plaintiff 2 also wanted a lump sum payment of $150,000 from the estate.
At the time of Trial, Plaintiff 2 was 74 years old, had a net asset position of $616,467.74 and $75,000 in superannuation. Plaintiff 2 was the full-time carer for her spouse and their combined annual income was $48,870.71.
Plaintiff 2 also had several health issues including bursitis, carpal tunnel syndrome, arthritis and ischaemic heart disease amongst others. Plaintiff 2’s spouse was paralysed from the neck down with limited hand function.
Plaintiff 2 attested that while her relationship with the deceased was not always a close one, in 1995 she strengthened her relationship with the deceased and viewed her as a substitute mother, who looked out for her. The defendant disputed Plaintiff 2’s position about her relationship with the deceased.
The defendant maintained the position throughout the proceeding that neither Plaintiff 1 or Plaintiff 2 were entitled to any provision from the estate, and there was no moral duty owed to them by the deceased.
The defendant, as well as being the executor of the estate, was one of the major beneficiaries. She was 70 years of age and lived in a rented property with her son, the other major beneficiary of the estate. The defendant’s taxable income was $26,006 and she has assets and superannuation totalling $7,571.44 and $6,291.41 respectively. The defendant had great concerns about her housing security and argued that she had much greater financial needs than the plaintiffs.
The defendant had a strong relationship with both the deceased and her late stepfather and provided support to both of them in their later years.
The court’s decision
It was found that the deceased did owe both the plaintiffs a moral duty, by reason of the estate property being comprised of their biological father’s share of the property, the plaintiffs having not made a claim against their late father’s estate and their degree of financial need as it is relative to the size of the estate. While the plaintiffs did not have as much of a financial need as the defendant, they were in some financial need and it was held that the plaintiffs do not need to prove they are destitute or in urgent need of financial assistance, a financial need in itself is sufficient.
Taking into account the degree to which both of the plaintiffs were capable for providing adequately for their own maintenance and support, the following was determined.
- Plaintiff 1 was modestly comfortable rather than affluent, and a modest legacy would make a difference to his financial wellbeing and security.
- Plaintiff 2 had a stronger financial need than Plaintiff 1, and as such a modest legacy would provide her with financial security.
- A Provision of $65,000 be awarded to Plaintiff 1.
- A Provision of $105,000 be awarded to Plaintiff 2.
This case highlights that even where a plaintiff is more comfortable financially than the defendant, this does not preclude them from being awarded a legacy from the estate via a family provision claim, and further supports the historical position of testators having a moral duty to their stepchildren.
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