Farm Guide VIC : 2008 - 2009
106 Succession Planning Will Challenges • any obligations or responsibilities of the deceased person to the applicant; • any other applicant and the beneficiaries of the estate; • the size and nature of the estate of the deceased person; • the financial resources (including earning capacity) and the financial needs of the applicant, of any other applicant and of any beneficiary of the estate at the time of the hearing and in the foreseeable future; and • any benefits previously given by the deceased to any applicant or beneficiary. In the last few years the Courts have handed down a number of judgments that provide guidance in the interpretation and application of the amendments and, in particular, the attitude of the Courts to the various classes of persons making a TFM claim. Following is a list of examples of cases which illustrate the approach adopted by the Courts in dealing with the wider category of potential claims: 1. A younger brother succeeded in a claim against his older sister’s estate as the deceased had raised her younger brother as a “defacto son” from a young age and the younger brother had acted as a dutiful son would have done. (Marshall v Spillane (2001) VSC 371) In recent years changes to the law have greatly widened the potential for claims to be made against a deceased person’s estate and for Wills to be contested. The amendments to Part IV of the Administration and Probate Act 1958 (“the Act”) commenced on 20 July 1998. One of the most significant changes to the legislation was to widen the categories of people eligible to make a claim for provision out of the estate of a deceased person. Such claims are commonly referred to as a Testator’s Family Maintenance claim (“TFM claim”). The categories are no longer limited to family members and are not restricted to financial dependence. Literally, “….. any person…..for whom the testator had responsibility to make provision” may make a claim, so long as the testator had a moral obligation to the claimant. The Court must be satisfied that the Will “does not make adequate provisions” for the applicant and that the deceased had a “responsibility to make provision for their proper maintenance and support”. In determining whether or not provision should be made for a particular applicant, the Court must have regard to a list of factors, including: • any family or other relationship between the deceased person and the applicant; • the nature of the relationship and where relevant, the length of the relationship; 2. An estranged wife of the deceased failed in her claim as the Court found that she had already received a substantial property settlement. (Armstrong v Sloan (2002) VSC 229) 3. Stepchildren were successful in their claim as the deceased had derived her estate from their father and for that reason the stepmother had a responsibility to provide for his children. ( James v Day (2004) VSC 290) 4. A niece by marriage of the deceased’s intestate estate succeeded as the deceased herself was of the view that the plaintiff should receive her benefaction and their relationship was such as to warrant recognition by the deceased. (Iwasivka v State Trustees Limited (2005) VSC 323) 5. A 73 year old foster daughter who was raised by the deceased as her daughter and sole child was successful in her claim. The plaintiff’s relationship with the deceased became strained a few years prior to her death and this led to the deceased’s change of attitude towards the plaintiff. However, the Court viewed this as irrational and decided that provision should be made for the plaintiff. (Sellers v Hyde (2005) VSC 382) These decided cases show that, in amending the Act as it has, the Parliament has left it to the Court to decide on a case by case basis whether provision should be made for a particular applicant. However, the Court must respect freedom of testation except in those cases where that freedom has been abused by a failure by the deceased to fulfil his or her responsibility to such a claimant. By Renishka Naidoo, Managing Partner of Slidders Lawyers.
2009 - 2010