When a parent passes away, disputes about how the estate is to be divided can arise between their children. Siblings are often unhappy about the share given to them under the will or about the fact they have been cut out entirely.
What can be done about this? Are siblings stuck with the terms of the will?
General Rule – Testamentary Freedom
The general rule is that parents are free to direct how their estate is to be divided in the will. They can, for example, direct an equal or unequal division between siblings, give their entire estate to their spouse or partner, or donate their estate to charity. This is known as “testamentary freedom”.
Parents have testamentary freedom unless there are issues of validity regarding the will itself, for example relating to undue influence, testamentary capacity, or non-compliance with technical requirements.
Exceptions
There are two important exceptions to testamentary freedom:
- The parent breached a moral duty to make adequate provision from their estate for a child’s maintenance and support. If there is a such a breach, the child can claim against the estate under the Family Protection Act 1955 (Family Protection Act).
- The child provided services or performed work for the parent based on an express or implied promised of a share of the estate. This can give rise to a claim against the estate under the Law Reform (Testamentary Promises) Act 1949 (Testamentary Promises Act).
The Family Protection Act and Testamentary Promises Act provide two different ways for siblings to get a higher share of their parent’s estate than the will directs. As such, they are common features of estate disputes.
Eligibility Under Family Protection Act
When considering a claim under the Family Protection Act, it is crucial to know if you are even eligible to contest.
For siblings, there are two simple rules:
- Children qualify if they are biological or legally adopted children of the deceased.
- For stepchildren, eligibility hinges on whether the parent was wholly or partly maintaining the stepchild, in the sense of providing financial support, immediately before death.
Breach of Moral Duty
The focus of claims under the Family Protection Act is whether the deceased breached a moral duty to provide for the claimant from the estate. While the legislation does not require this assessment, the courts have established it as the key test in Family Protection Act cases.
The courts judge if there has been a breach of moral duty by the standards of a “wise and just” will-maker. If such a breach is found, the will can be disturbed, but only to the extent necessary to remedy the breach.
You might think it is a bit strange that a court of law is required to consider issues of morality. We agree. In our view, it should not be for Judges to determine the moral obligations of individuals. That is for society at large. But alas, it is the law we have (for now).
Deciding if, and to what extent, a moral duty has been breached is intensely fact specific. Because every family is unique, the courts must assess the duty against all relevant factual circumstances. They consider the age and stage of the parties, relationship dynamics, emotional ties, financial needs, previous support, historical contexts, and anything else that might be relevant.
This can make it difficult to assess the prospects of success of any given Family Protection Act claim. Ultimately, and as with many areas of law, the outcome will turn on the facts.
Adequate Provision
What “adequate provision” means will depend on the circumstances. Case law has revealed the following principles:
- Adequate provision does not mean equal sharing between siblings. Even if a will provides that siblings will share equally, the Court can order that one sibling is to receive more than an equal share. In one case, a sibling received a 40% share of the estate, despite the will directing equal sharing between three siblings.
- A sibling may be entitled to provision from the estate even if they do not have any financial need for it. In one case, the Court of Appeal awarded a wealthy adult beneficiary 10% of an estate based purely on her belonging to the family.
- Genuine financial need can justify a higher award.
- Provision does not have to be direct. Adequate provision for the purposes of the Family Protection Act can be made via a protective trust, for example.
- The context of the claimant is important. For example, dependent minor children may be treated differently to independent adult children.
Limitation Periods
Claims under the Family Protection Act must generally be filed within 12 months of the date probate of the will is granted.
If a person is representing minors or mentally handicapped individuals, they may be eligible for an extension of up to two years, provided the estate has not been fully distributed.
While the Court has the power to extend these limitation periods, extensions are not granted lightly. The Court will need to be satisfied that there is a legitimate excuse for the late filing or that refusing to grant the extension would cause manifest injustice.
Claims under the Testamentary Promises Act
Under the Testamentary Promises Act, siblings can make a claim against the estate if the deceased parent promised to reward them for services or work, but did not include the promise in the will.
Children of the deceased can make claims under the Testamentary Promises Act, but they are not the only eligible claimants. Eligible claimants can also include spouses, partners, ex-partners, and even non-family members.
To make a claim, a claimant will need to establish:
- they provided services or work for the deceased while they were alive;
- the deceased promised to reward them through a provision in their will;
- there is a clear link between the services and the promise made; and
- the promised provision was not included in their will.
Types of Services
To succeed under the Testamentary Promises Act, a sibling must first show that they provided services or work for the deceased parent. Examples include personal care, housekeeping, financial assistance, assistance with properties or business, and support and companionship.
In a family context, the services must exceed what is reasonably expected within a familial relationship. For example, providing emotional support for a neighbour might be sufficient for a claim, while similar support to a parent might not qualify if it is considered simply an extension of the usual relationship.
Proving a Promise Was Made
To support a claim, a sibling must establish that the deceased parent made a promise. Proving that a promise was made can be challenging. However, there are some forms of evidence which may be used to show that a promise has been made. Oral or written evidence such as letters or texts could be sufficient to show that a promise has been made. Previous wills also might be useful in proving a promise, by demonstrating the deceased’s intentions.
Promises can be made impliedly or expressly. An express promise could be clearly stated, whereas an implied promise can be ascertained from the circumstances surrounding the alleged services and promise. The Court may accept a promise has been made, even if not recorded, by considering any relevant circumstances.
Considerations from the Court
The Court will consider all relevant circumstances of each case. This includes the circumstances in which the deceased parent made the promise, and in which the services or work was rendered, the value of the services or work, the value of what was promised, the amount of the estate, and the nature and amounts of the claims against the estate by other claimants.
If the Court is satisfied that a valid claim has been made, it may award a “reasonable” payment from the estate of the dead parent to honour the promise. When determining what a reasonable payment from the estate may be, the Court will consider all relevant circumstances noted above.
Filing a Claim
Under section 6 of the Testamentary Promises Act, claims must be filed in the Court within 12 months from the date that probate of the will is granted. It is possible for this timeframe to be extended, provided that the estate has not already been distributed.
The procedure for filing a claim under the Testamentary Promises Act is similar to the procedure for filing a claim under the Family Protection Act. We recommend you engage a lawyer to assist you.
Conclusion
When a parent passes away, they generally have testamentary freedom – the freedom to decide in their will how their estate will be distributed. This can sometimes lead to dissatisfaction from the surviving children, especially if the will makes an unequal provision for, or completely excludes, one sibling. It can be a source of bitter and protracted sibling disputes.
The Family Protection Act and Testamentary Promises Act provide two exceptions to the general rule of testamentary freedom. They give siblings some recourse to ensure they receive a fair provision from their deceased parent’s estate. Both paths are highly fact dependent. Whether a claim is made based on a breach of moral duty or a testamentary promise, the Court will assess the relevant circumstances in determining whether to make an award.
Claims under the Family Protection Act or Testamentary Promises Act are subject to strict time limits. It is therefore crucial that a claiming sibling acts quickly. In these instances, it is advisable that siblings obtain legal assistance in making or preparing a claim under either banner.
Whether you are making a claiming a breach of moral duty or looking to enforce a testamentary promise, Evolution Lawyers are here to help you. If you need assistance contesting a will, speak to our team today.