The Succession Act 2006 (NSW) is the piece if legislation that deals fundamentally with the affairs of an individual surrounding the act of succession, that is passing of property to another.
The critical document that most people know is what is commonly called a ‘Will’. The Will dictates how property or interests of the deceased are to be dealt with, or what lawyers call the “testamentary intentions”.
It is not uncommon for people to have a Will that is out of date. Maybe the property has increased dramatically in value or the property no longer exists, or maybe a beneficiary (someone who will benefit from the property of the Will) was given more or less than they should have or are. There are also occasions where family fights or estrangements mean that people are left out of Wills. In these circumstances, an application can be made to the Supreme Court of NSW for an order that would essentially amend the distribution of assets as recorded under the Will. This is called a Family Provision Order (FPO).
A FPO is defined as: an order made by the Court under Chapter 3 in relation to the estate or notional estate of a deceased person to provide from that estate for the maintenance, education or advancement in life of an eligible person.
For an FPO to happen, the aggrieved individual must be an eligible person in accordance with section 57 of the Succession Act. An eligible person is defined as:
- a person who was the spouse of the deceased person at the time of the deceased person’s death,
- a person with whom the deceased person was living in a de facto relationship at the time of the deceased person’s death,
- a child of the deceased person,
- a former spouse of the deceased person,
- a person:
- who was, at any particular time, wholly or partly dependent on the deceased person, and
- who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member,
- a person with whom the deceased person was living in a close personal relationship at the time of the deceased person’s death
There is further nuance around the definition of an eligible person, as the definition of a 'child' is very broad by reference to the Children and Young Persons (Care and Protection Act) 1998.
Once it is apparent that an individual is an eligible person, then an application must be made within 12 months of the death of the deceased unless the court grants otherwise.
The court will then examine the application, including any defences raised and evidence brought before the court and seek to determine the application in accordance with section 59 and 60 of the Succession Act 2006.
Section 59 sets out when FPO may be made and section 60 sets out matters to be considered by the Court. These matters include:
- any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship,
- the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person’s estate,
- the nature and extent of the deceased person’s estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered,
- the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person’s estate,
- if the applicant is cohabiting with another person—the financial circumstances of the other person,
- any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person’s estate that is in existence when the application is being considered or that may reasonably be anticipated,
- the age of the applicant when the application is being considered,
- any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person’s family, whether made before or after the deceased person’s death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant,
- any provision made for the applicant by the deceased person, either during the deceased person’s lifetime or made from the deceased person’s estate,
- any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person,
- whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person’s death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so,
- whether any other person is liable to support the applicant,
- the character and conduct of the applicant before and after the date of the death of the deceased person,
- the conduct of any other person before and after the date of the death of the deceased person,
- any relevant Aboriginal or Torres Strait Islander customary law,
- any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered.
A recent case determined late last year is a great example where the above matters were considered resulting in the court making an order that a further provision be made out of the Will.
Megerditchian v Khatchadourian  NSWSC 1870 is a first instance decision where the court made orders that a further amount of money in the form of real property be transferred to the application in lieu of the inadequate provision under the Will.
The details of the matter are as follows:
- Distributable Estate of deceased consisted of properties and $5000 in two bank accounts.
- Deceased's last Will left $10,000 legacy to applicant daughter and rest of Estate to respondent son.
- Applicant sought order designating half share of property as notional Estate.
- The Applicant was a Widow with children, 70-years-old, with pension, car and personal effects estimated at $6000.
- Relationship with deceased was rifted.
- The court found that:
- the deceased's Will failed to make adequate provision for maintenance, education and advancement of applicant.
- An amount of provision ought to be made was legacy of $100,000.
- The legacy with costs could be met by designating half share in one property as notional state.
It is critical that individuals who believe that are entitled to more or Executors who may have a claim made against the estate receive legal advice urgently.
Frank Law has a well-established and lengthy history of running and defending Family Provision matters, acting for both the Estate and the Applicant.
If you, or a client of yours, would like advice on Wills and entitlements, we offer a free first conference to discuss your unique situation. Please click here to book.
This is not legal advice.