Family Provision Orders
*Please note this is a general guide only and should not be used in place of obtaining our advice. Any references are relevant as of the date of posting.
How a person’s estate is distributed upon their death depends upon the contents of their will (if one exists). Typically, an executor is named in the will, and this person will carry the responsibility of ensuring that the estate is managed and distributed according to the wishes of the testator (deceased).
However, the testator does not have unfettered discretion to determine the distribution of his or her assets, and certain circumstances may give rise to a right to challenge the manner of this distribution in court.
One such scenario is where the will fails to make adequate provision for the proper maintenance and support of a person who was eligible and entitled to receive such compensation. In these cases, the eligible person may apply for a “family provision order” to be made in respect of the testator’s estate, wherein a court will order that provision be made out of the estate of the deceased person for the proper maintenance and support of the eligible person. Such an order may also be known as a Testator’s Family Maintenance Order or a Part IV Application.
Who may apply for a family provision order?
In Victoria, a court’s ability to grant a family provision order is governed by the Administration and Probate Act 1958 (Vic) (“the Act”). Prior to 2015, any person could apply for such an order; however, this was restricted by the Justice Legislation Amendment (Succession and Surrogacy) Act 2014 (Vic) which amended the Act and introduced the requirement that a person seeking the order must be an “eligible person”.
Who is an eligible person?
An eligible person must have had some relationship with the deceased, whether this was current at the time that the deceased died, or a former relationship of some kind.
According to the Act, categories of relationship that will automatically satisfy the definition of “eligible person” are:
a spouse or domestic partner of the deceased at the time of the deceased’s death;
a child of the deceased (natural or adopted); or stepchild of the deceased; or a person who believed they were a child and were treated that way during a substantial period of the deceased’s life; provided that at the time of the deceased’s death they were:
under the age of 18;
a full-time student between 18-25; or
a child with a disability; or
a former spouse or former domestic partner of the deceased who would have been able to commence proceedings under the Family Law Act 1975 (Cth) (subject to further requirements).
There are other categories of “eligible person” which require the court to be satisfied that the person was wholly or partly dependent on the deceased for proper maintenance and support. These are:
adult children, stepchildren, or an adult person who believed they were a child of the deceased;
a registered caring partner of the deceased;
a grandchild of the deceased;
a spouse or domestic partner of a child of the deceased; or
a member of the same household as the deceased.
What factors will the court consider in deciding whether to make a provision order?
According to the Act, the court must consider:
the deceased’s will (if any);
evidence of the deceased’s reasons for making the dispositions in the will; and
any other evidence of the deceased’s intentions.
The court may also consider (among other factors):
the nature and length of the relationship between the deceased and the applicant;
the size and nature of the deceased’s estate;
the financial resources, earning capacity and financial needs of the applicant;
any physical, mental or intellectual disability of the applicant;
the age of the applicant; and
the character and conduct of the applicant.
While the above considerations are helpful, they do not inform us of how courts will weigh each factor when making their decision, which is where case law can be of assistance.
Moral duty
As affirmed in a recent Victorian case (Brimelow v Alampi (2016) VR 219), the concept of the testator’s ‘moral duty’ to make provision for the applicant is still the primary focus of family provision cases, however the court must have regard to what the deceased provided in the will, stated in any reasons, or manifestly intended.
Testator’s intention
The court will generally be reluctant to diverge from the provision of assets as given in the will, particularly where there is evidence that the will was formulated after due consideration and the reasons for drafting the will in this manner were provided (see, e.g. Wengdal v Rawnsley [2019] NSWSC926). As such, there must be clear evidence of a failure by the testator to make adequate provision for the proper maintenance and support of the applicant.
Size and nature of the estate
A larger estate may provide greater scope for a court to grant provision to an applicant, however ultimately this discretion is limited to what is necessary for the applicant’s proper maintenance and support, and this measure cannot be pushed beyond its fair meaning (Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9).
What factors will the court not consider?
Moral duty owed to the applicant divorced from any evidence of need
An application based solely on moral duty, without demonstrating that the provision sought is necessary for the applicant’s proper maintenance and support, will fail. This is because in the absence of need, judicial intervention is not warranted (Vigolo v Bostin (2005) 221 CLR 191).
Fairness and equality of treatment of beneficiaries
A recent case in the Victorian Supreme Court (Firth v Reeves [2019] VSC 357) confirmed the long-established principle that equality in the treatment of siblings is not a necessary element of testamentary duty, and therefore does not provide sufficient grounds for a provision order claim.
Further to this, the provision given by a testator to one child is not a measure of how another child who seeks provision should be treated (Blore v Lang (1960) 104 CLR 124).
Moreover, the concept of fairness of distribution between beneficiaries is unlikely to be a relevant question, as this is only invoked to the extent that it bears upon the adequate provision of proper maintenance and support (Blair v Blair [2002] VSC 95).
These principles are consistent with the court’s willingness to give effect to the intention of the testator, particularly where reasons are given explaining the manner in which the estate is distributed.
How much may the court award?
Pursuant to s 91(5)(A) of the Act, the amount awarded must not exceed what is necessary for an applicant’s proper maintenance and support. This is a flexible concept which is adapted to conform to acceptable community standards (see, e.g. Camernik v Reholc [2012] NSWSC 1537), while it also goes beyond the mere alleviation of poverty, and takes into account the potential vicissitudes of life (Allardice v Allardice (1909) 29 NZLR 959).
When making an application for a provision order, it is important that the applicant is able to quantify the provision sought, and explain why this is an appropriate sum of provision for the proper maintenance and support of the applicant. Judges have looked negatively upon the formulation of claims based on a percentage of the estate in question, rather than a fixed dollar figure, as it is more difficult to argue that the amount sought is appropriate for proper maintenance and support where the exact amount is not specified (Firth v Reeves [2019] VSC 357).
How we can help
Despite the existence of a statutory regime governing family provision orders, there is still some uncertainty surrounding these claims.
Merton Lawyers has a wealth of knowledge and experience in this area, and can assist you in determining the merits of your potential application for a family provision order.
Contact us on (03) 9645 9500 or email our directors Anthony Curtin at anthony.curtin@mertonlawyers.com.au or David Rennex at david.rennex@mertonlawyers.com.au to find out more.
