Estate Planning and Avoiding Family Provision Claims.
One of the biggest concerns for many people when making an estate plan is the possibility of a family provision application (“FPA”). An FPA refers to an eligible person (such as a spouse, child or dependent) contests a will, seeking a larger share of the deceased’s estate if they feel they have not been adequately provided for. FPAs can be stressful, time-consuming, and costly for all parties involved.
In Queensland, these claims are governed by the Succession Act 1981, and while it is impossible to totally remove the risk of a claim, there are several steps you can take to reduce the likelihood of your estate being challenged such as making a clear and ‘fair’ will, communicating with your family and potential beneficiaries, reviewing your estate planning arrangements and considering a ‘no contest’ clause.
Appropriate will
The foundation of any successful estate plan is a well-drafted and clear will. The more detailed and specific your will is, the less room there is for ambiguity or dispute. If your will lacks clarity or fails to adequately explain your decisions, it could lead to challenges by confused or disgruntled family.
It is important to be mindful of the people who might be (or feel) entitled to a portion of your estate, especially children, spouses, or any person who may have relied on you financially. Excluding any of these people without a clear reason could prompt them to make a family provision claim.
Communication and review
One of the most effective ways to avoid family disputes is to communicate your wishes to your family and dependents while you are still alive. If you have a good relationship with these people, talking openly about your will can help avoid misunderstandings and hurt feelings after your death.
In the event that you are not able to appropriately discuss your intentions during your lifetime or you do not feel you are able to clearly state your reasons for your estate plan, a memorandum of wishes may assist to clarify your intentions and explain the reasoning behind your decisions. Although not legally binding, a memorandum of wishes may be especially helpful if you are excluding someone from your will or providing them with a smaller share than others.
Life is unpredictable and circumstances change, which is why the ultimate protection from FPAs is to regularly review your estate planning arrangements to ensure they remain relevant to your current circumstances and wishes.
‘No-contest’ clauses
A ‘no contest’ clause can be a useful tool to discourage potential FPAs in your estate. ‘No contest’ clauses typically (though not necessarily) state that if a person contests the will, they will forfeit part or all of their inheritance.
It is important to note, however, that in Australia broadly, you cannot limit a person’s right under the relevant State or Territory legislation to bring a FPA even if a ‘no contest’ clause is present. As such, clauses such as these are not binding but may be helpful to demonstrate your wish that no claim be brought in your estate.
To conclude
While it is impossible to completely prevent FPAs, taking proactive steps to make your estate planning is as clear, and transparent as possible will significantly reduce the chance of disputes. If you are concerned about potential claims bring brought against your estate, consulting with one of our experienced estate planning lawyers may bring you peace of mind and support to implement the best and most robust strategy for you and your circumstances.
By following these strategies and consulting with de Groots wills and estate lawyers, you can help safeguard your legacy and ensure that your estate is distributed in accordance with your wishes, without unnecessary conflict and expenditure.
By Dannielle Wood – Solicitor
More on Wills and Estate Planning, Defending a Family Provision, Releasing rights to make a family provision claim
