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Carer inherits to the detriment of children of deceased

Author: Graeme Heckenberg from Heckenberg Associates Solicitors

The deceased left $100,000 to her carer, $50,000 to a friend who shared her in interest in Tarot cards, and only $15,000 each to her children. She left the rest of her estate to a number of charities.

The carer received the carer's pension and had lived rent free in the deceased’s home for many years. The friend had known the deceased for 5 years and visited the deceased from time to time. The children commenced proceedings under the Family Provision Act 1984 seeking orders that further provision be made for them from their mother’s estate.

In the court case, they were the plaintiffs, and the executor of the deceased estate was the defendant. Importantly, the children had retained solicitors, and commenced their application within the time prescribed by the Act. Also, they were eligible persons as defined by the Act. The principles the Court applies in applications under the Family Provision Act have been articulated by the High Court of Australia as encompassing a “two-stage approach”: First, the Court must determine if the deceased made any provision for the applicant in the will, and whether that provision was inadequate for their proper maintenance, education and advancement in life. The difference between ‘adequate’ and ‘inadequate’ provision are to be determined on established legal principles. Among other things, the Court has regard to the applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and any other persons who have legitimate claims upon his or her “bounty”. The second stage occurs if the Court decides that further provision should be made for the applicant, and it becomes necessary to determine the nature and amount of that provision. It should be remembered, however, that there are circumstances where an applicant could be found to have been left without adequate provision yet a court could refuse to make an order, for example, where there were no assets from which an order could reasonably be made, or making an order could disturb the testator’s arrangements to pay creditors. In this case, the Court considered the family history, the financial positions of the applicant, carer, and friend, and the deceased’s connection with the charities, before making any order. The Court also had to decide on the truthfulness of competing witnesses’ evidence regarding the relationship of the deceased with her children.

Another issue raised was conduct by the children that was said to disentitle them to any increase in their share under the will. The Court found that: The children had been left without adequate provision. The estate was large enough to increase the children’s share without disturbing the amounts to go to the carer and the friend. There was no reason why the carer and the friend should receive such large amounts. The Court ordered that: Each of the children receive $40,000 (being an increase of $25,000 each) together with interest. The children’s legal costs, and the costs of the defendant estate, be paid from the amounts to go to the carer and the friend. This case illustrates the principles applied by the Court in Family Provision Act cases and the factors which it may take into account, including complex competing evidence, the truthfulness of witnesses, the conduct of eligible persons, and the needs of applicants, to determine the appropriate provision that should be made.

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