Contested Wills Access Business Lawyers is a specialist business law firm providing high quality, personalised legal services to a range of businesses and corporations both large and small. The team of experienced solicitors and legal support staff specialise in the following areas: • Business and Corporate Law • Succession Planning, Estate Planning and Probate • Business Insolvency and Reconstruction • Property Law • Commercial Dispute Resolution – negotiation, mediation and litigation Rod Cunich Challenging Wills It is becoming common place for the validity of Wills to be challenged. Whether considering a challenge to a Will or defending such a challenege, the purpose of this guide is to provide a basic understanding of the issues involved. Do not however act upon the information without first obtaining expert legal advice from a lawyer practising in the field as it is a complex area of law. Access Business Lawyers conducts public seminars and private sessions regarding this interesting area of law. Please contact us if you are interested in either. Formal Requirements for a valid Will Regardless of any challenge to a Will, sometimes the validity of a Will becomes a serious issue due to its failure to comply with legal formalities. The Wills Probate and Administration Act sets out the formal requirements for Wills. There are many, including rules governing how a Will must be signed, the number of witnesses and the relationship of the witnesses to the deceased. The Act also contains a mechanism for dealing with informal Wills – that is, those that do not comply with the formal requirements. An example of an informal Will is a formal document which was not signed correctly on each page, is not witnessed correctly or fails to clearly state the deceased wishes. At the other extreme, an informal Will may be a simple letter left by the deceased which sets out their intentions. An irregularity (non compliance with the formal requirements set out in the Act) may prove to be problematic to a Will however some Wills may still be binding notwithstanding an irregularity. Each case varies on the circumstances surrounding the creation of the Will. Often family members are left in difficult situations where documents are found which may or may not embody the testamentary intentions of the deceased or where there is a real question regarding the capacity of the deceased to have made a Will. If there are issues of concern, then urgent legal advice should be sought. Mike Dyson Graham Lancaster Challenges to Wills - Family Provisions Act Commonly, Wills are contested in the Courts under the Family Provisions Act (FPA). The FPA provides a mechanism for certain classes of people to make claims against an estate, where it is alleged that insufficient provision was made for a particular person. The legislation is complex. A brief overview is set Contact Access Business Lawyers on 1300 850 280 or email one of the solicitors on: Rod Cunich Mike Dyson Graham Lancaster David Swan Tom Ellicott firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com firstname.lastname@example.org David Swan Wollongong Level 4, 310 Crown St Sydney Level 12, St James Centre, 111 Elizabeth St Parramatta Level 5, 460 Church St Tom Ellicott All correspondence PO Box 337 Wollongong 2520. DX 5176 Wollongong Information we need and the Areas we look at Who can claim? Only “eligible persons” as defined by Section 6 of the FPA are able to make a claim. The following categories are considered to be “eligible persons” for the purposes of the FPA: a) Spouse (including de facto spouse), a person living the domestic relationship with the deceased and can include homosexual partners. b) Children of the deceased (including adopted children but not step children). c) Persons who have lived with the deceased and provided domestic support and personal care. d) A former spouse of a deceased can claim where there may have been a divorce but not a property settlement. The existence of a property settlement under the Family Law Act will usually preclude a claim. A claim might also be defeated if it can be shown the deceased had already made provision for the former spouse. e) People may be classed as “other dependant persons” for the purposes of the FPA. Sometimes grandchildren, a member of the deceased’s household or even people who are unrelated to the deceased such as foster children and persons in a homosexual relationship can make a claim providing the following can be established: (i.) The Claimant (unless a grandchild) must prove that they were a member of the “household” of the deceased. This means that it is important for that person to prove “a degree of continuity and permanency of mutual living” for example, weekend visits not sufficient. (ii.) The Claimant must prove that he or she was “wholly or partly dependent upon the deceased”, this includes financial material need. More commonly than not, Claimants will leave evidence before the Court about their financial circumstances, for example, they have a mortgage, they are supporting children and the like. (iii.) The degree of dependence requires very careful consideration as it presents a substantial hurdle to these types of cases. What property can be affected by an order? The Court can make orders affecting property, which is located in, or outside on NSW. If the deceased lived outside of NSW, then the Court can not make orders in relation to property located out of the state. In addition, the FPA allows the Supreme Court to make orders in respect of the deceased’s “notional estate”, that is, discretionary power to make orders relative to property (land, shares, other property), for example, which was disposed of prior to the deceased’s death. It is very common to find that before death the deceased entered into a contract on less than commercial terms for the sale of the family home to a family member or the like. Commonly, in these situations children and/or close relatives can be left out of Wills. The FPA in defining whether or not, property falls into “the notional estate” will take into account that the property is owned by another person (whether or not a trustee) and what was said at the relevant times. Various court decisions have examined incidents dealing with the disposal of various types of property including shares and other personal property. Requirement to prove inadequate provision Section 7 of the Family Provisions Act provides that the Supreme Court can make provision out of the estate or notional estate (or both), of the deceased person for the maintenance, education and advancement of life for the eligible person. Essentially, the current law requires a detailed investigation of the relationship between a claimant and the deceased person. This means that all of the claimant’s contributions to the life of the deceased, whether financial or non-financial are considered. The Court has established that to apply the language used in the legislation correctly that it is not just a case of proving that you are “eligible” to claim. It is important to determine on a factual basis whether the community would require an order to be made to adjust the provision made in the estate by the deceased person. Planning Whether preparing a Will, challenging or defending a Will, Access Business Lawyers deal with these issues on a daily basis. We often see Wills that don’t carefully take into account the financial standing of the Will maker, in particular, where the Will fails to make adequate provision for the transfer of estate assets, (eg; the family business to one or more children), or a separation of investments held for example in superannuation or life policies. It is essential that people preparing Wills or professional advisers (such as accountants) who discuss with their clients the necessity of preparing a Will understand what assets are held by the Will maker. Often some assets for example, superannuation or joint bank accounts will not vest in accordance with the provisions of a Will and often intended beneficiaries can miss out. Access Business Lawyers advises widely in the restructure of companies to provide for a transition of shares or upon the transfer of the business assets on the death the business owner. Succession planning can include the preparation of a Succession Agreement (commonly known as a buy/sell agreement) between shareholders where funding can be obtained from various sources and various types of life policies. Please call us if you would like to know more about the above issues or if you would like to attend an estate planning seminar.