Can a Beneficiary Contest a Will in Victoria?
There are many misconceptions about the law governing inheritance in Australia. A common example is the belief that someone making a will (a testator) can bequeath their estate in any way they choose. In Australia, the law requires that testators make provision for their dependents to the extent that is reasonable given the assets of the estate. In the state of Victoria, the Wills Act 1997 gives beneficiaries the legal right to contest a will that fails to make such adequate provision for them. Under this legislation, a beneficiary can use a Testators Family Maintenance Claim (or TFM claim) to contest a will. They can argue that the testator had a moral responsibility to make a provision that adequately provides for their financial needs. This article looks at common mistakes testators make while drafting a will, the particular circumstances when a beneficiary can contest a will in Victoria, and key aspects of the process.
Eligibility to Contest an Estate
Victoria introduced the Justice Legislation Amendment (Succession and Surrogacy) Act in 2015 to prevent “fringe dwellers” from making frivolous claims against a deceased estate. Prior to this amendment, anyone could apply to the court to contest a will and claim that the testator had a responsibility to make provision for him or her in their will. Following the amendments, the only people eligible to contest the will are the deceased’s spouse (including de facto partners and former spouses), a child (including a step-child and adopted child), grandchild, and registered caring partner. The amendments also recognised that anyone living in the deceased’s household at the time of death had a basis to contest the will.
To make a successful claim, the claimant must prove that the testator had a moral duty to provide for them to an extent not already fulfilled by the terms of the will. Siblings and nieces and nephews are generally not eligible to contest a will unless they are a financial dependent of the deceased who was living with them at the time of death.
Obtaining a Copy of the Will
The first step for a beneficiary who intends to contest a will is to obtain a copy of the will. In Victoria, certain people are entitled to a copy of a will, including any beneficiary of the will (or of an earlier will), and the spouse, parent and child of the testator. In addition, anyone who would be entitled to a share of the estate if the deceased had died intestate (that is, without a valid will) can request a copy of the will, as can any creditor who has a verifiable claim against the estate. Any of these individuals can obtain a copy of a will from the executor or administrator of the estate.
Can a Beneficiary Contest a Will in Victoria? Time Limitations
A beneficiary must make a TFM claim within six months of the grant of probate and before the estate has been distributed to beneficiaries. The Supreme Court can make a special order allowing for a claim out of time, but the claimant must prove that there is a convincing reason for the delay and that the action would not prejudice the estate.
Factors Relevant in Contesting a Will
The courts consider a list of factors when assessing the merits of a TFM claim against a deceased estate. A TFM claim is evaluated primarily on the basis of the size of the estate minus any liabilities, and the question of whether the beneficiary received adequate provision under the will. The court will consider the finances of the claimant and other beneficiaries, including their earning potential, and current and future financial needs. They will take note of the age, character and conduct of the claimant, and any mental, physical or intellectual disability. In addition, the courts will consider whether the claimant substantially supported the testator during their lifetime or materially contributed to any of the estate’s assets.
The Fallacy of the Nominal Provision
Testators will sometimes include a nominal provision for a close relative or dependent in their will assuming that this will prevent the person from contesting their estate. It is important to understand that this strategy will not be effective in Victoria, even though it is an accepted practice in other countries.
In Victoria, if a testator leaves a thousand dollars to one of their children and a million dollars to the other, then the child receiving the nominal provision has standing to contest this will. Indeed, there is a strong case for the court to order that adequate provision has not been made for the first child, in light of the assets of the estate. In such a hypothetical situation, the court may order that the children share the estate and each inherit half a million dollars. Alternatively, the favoured child may retain the greater share of the estate due to other factors, such as having made greater contributions to the testator or the estate. Equally, the less favoured child may inherit a larger share because they are able to demonstrate greater financial need than their sibling.
Preventing a Beneficiary from Contesting a Will in Victoria
A will needs to be carefully drafted to avoid legal contests that may overrule the wishes of the testator. Although no amount of drafting can fully prevent a beneficiary contesting the estate, a solicitor is able to take steps that limit the chances of a successful claim. For instance, a will can be written to show that the testator gave careful thought to the financial needs of each dependent, and the document might offer rationales for why the deceased made provisions in certain ways. A solicitor can also advise a testator to take actions prior to their death, such as personally gifting assets to their preferred beneficiary. Alternatively, if a testator has concerns about the ability of a dependent to manage their inheritance, they can establish a trust to hold assets safely for the benefit of a beneficiary.
WHERE TO NEXT?
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