I’ve been intending to write about Wills, and that area of law known as “Testator’s Family Maintenance” (TFM for short) for a while now, but I put it off until now because the Victorian Parliament was in the process of changing this area of the law, and there was no point my writing about it until the changes were finalised and made law.
Those changes to the law have now been made by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014, which received Royal assent on 21 October 2014 and will come into effect on the 1st January 2015, and will only apply in respect of the estate of any person who dies on or after the commencement date. Accordingly, current applications and estates will not be affected by the changes.
It makes changes to Part IV of the Administration and Probate Act 1958, in particular to the categories of people eligible to make claims for provision from a deceased estate, and the considerations the Court must have regard to when determining applications.
Testators Family Maintenance, or “Family Provision” to use modern terminology, laws basically say that when a person is making their Will they may have a “moral obligation” to make “adequate provision” in their Will for certain people and that, if they do not make such adequate provision for such people, then the Court has the power to vary the bequests in the Will so as to make adequate provision for those people. In other words if you don’t leave enough, or anything at all, in your Will to someone that you should have, then the Courts can change the distribution of your assets in your Will so that these people receive what the Court considers to be their fair share of your estate. TFM laws often provoke a strong response from my clients when they come to see me to make their Will, and I explain this to them. Often clients say to me that the law has no right to interfere, and that their Last Will should be treated as sacrosanct.
While on the face of it this might seem fair enough, the fact is that people are not always rational, fair or just when they make their Wills, and sometimes they fail in their obligations to their family when doing so. That people can do some pretty unfair, and sometimes downright odd, things in their Wills is demonstrated by the Wills of people like:
William Shakespeare, who in his Will left his wife his “second best” bed;
a Mr. Zink, who was a lawyer in America who died in 1930, and made a Will that left $50,000 in trust for 75 years, by which time he hoped it would have grown to $3 million, in order to create “The Zink Womanless Library”. In his Will he directed that the words “No Women Admitted” were to mark all the entrances to the library and that no books, works of art, or decorations by women were to be permitted in the library. “My intense hatred of women,” he explained in the will, “is not of recent origin or development nor based upon any personal differences I ever had with them but is the result of my experiences with women, observations of them, and study of all literatures and philosophical works.” Not surprisingly his family were able to successfully challenge the will;
William Randolph Hearst, the American newspaper billionaire, who died leaving behind five sons but in his Will said that anyone who could prove “that he or she is a child of mine [receive] the sum of one dollar. I hereby declare that any such asserted claim … would be utterly false.”
While these are extreme examples they do show that even smart and famous people can be irrational, and even cruel, when making their Will. When that causes financial hardship to people who do not deserve to be treated like that, then the law can step in to create a just and fair outcome.
Until the recent changes to the law however there was a lot of criticism that the law had gone too far in the other direction, in that almost anyone, whether family or not, who could show that they were in some way dependant on a deceased, or otherwise deserving, could make a TFM claim if they felt they were not adequately provided for in the Will.
The new changes to the TFM laws will:
1. Restrict the type of person who is eligible to make a claim for family provision to:
a)
- A spouse or domestic partner of the deceased at the time of the deceased’s death;
- A former spouse or domestic partner in a situation where a property settlement was not reached following their separation;
- A child, step child, or adopted child of the deceased who at the time of death was under the age of 18 years, or a fulltime student between the ages of 18 and 25 or who is under a disability;
- A person who believed the deceased was their parent for a substantial period of their life and was treated by the deceased as their natural child an “assumed child”);
- A registered caring partner;
- A grandchild of the deceased who was wholly or partly financially dependant on the deceased ;
- A spouse or domestic partner of a child of the deceased if the child dies within 1 year of the deceased’s deathwho was wholly or partly financially dependant on the deceased ;
- A member of the household of the deceased, or a former member who would have resumed being a member of the household but for the deceased’s death, who was wholly or partly financially dependant on the deceased
- other family mewmbers such as parents, nices, nephews, siblings, cousins, unregistered non-partner carers etc. are only eligible to make a claim if they fall into one of the other above categories, i.e. household member or assumed child.
2. Require that for applicants falling within categories listed in (e) to (h) in paragraph 1, the Court must be satisfied that the person was wholly or partly dependent on the deceased for their proper maintenance and support.
3. Specify when determining the amount of provision, the Court must have regard to:
a) the degree to which, at the time of death, the deceased had a moral duty to provide;
b) the degree to which the distribution of the estate fails to make adequate provision;
c) the degree to which the eligible person is not capable, by reasonable means, of providing adequately for the eligible person’s proper maintenance and support (only in relation to adult children under category (d) above);
d) the degree to which the eligible person was wholly or partly dependent on the deceased at the time of the deceased’s death (only for applicants falling within (e) to (h) above).
4. Limit the amount of provision by reference to the amount necessary for the applicant’s proper maintenance and support; and requires (for applicants falling within (e) to (h) above) the amount to be proportionate to the degree of dependency at the time of the deceased’s death.
5. Change the nature of the Court’s considerations in making a family provision order:
a) the Court must to have regard to the deceased’s will, any evidence of the reasons for making the dispositions in the will and any other evidence of the deceased’s intentions in relation to providing for the applicant;
b) the Court may, rather than must, have regard to the criteria currently outlined in s91(4)(e)-(p);
c) adds an additional criteria: the Court may have regard to the effect an order would have on the amounts received by other eligible persons.
Hopefully the new laws will ensure that those deserving of assistance from the Courts will be able to obtain justice, while at the same time reducing the strain on the Court system, which was becoming burdened by the increase in the number of claims experienced under the old laws.
As mentioned though the new laws won’t come into effect until 1st January 2015 (if not proclaimed earlier), and will only apply in respect of the estate of any person who dies on or after the commencement date. Accordingly, current applications and estates will not be affected by the changes, however in most cases any such claim must be made within 6 months of the date of a Grant of Probate of the Last Will of the deceased.
Anyone who feels they may have a right to make a Testators Family Maintenance claim is welcome to come and see me to discuss the matter on a “no obligation, first half hour free” basis.
Peter McLeod.