When you hear people talking about how someone is ‘contesting a will’, they are generally referring to a claim under the Inheritance (Family Provision) Act 1972 (the IFP Act). The IFP Act is South Australian legislation but there is similar legislation interstate and overseas.
The IFP Act has received a lot of attention in recent years due to the ever-increasing number of claims being brought. A common reason given is the increased size of estates. Rising house prices and the introduction of superannuation mean that it is now not uncommon for an estate to exceed $500,000. For obvious reasons, the larger the estate, the more likely it is to be contested.
You may consider that a claim under the IFP Act is an infringement on a testator’s right to dispose of their property as they wish. However, the IFP Act serves an important function in protecting beneficiaries who have not been adequately provided for. A recent review by the South Australian Law Reform Institute has recommended that the IFP Act should remain with some minor amendments to limit some of its scope.
The stories that make news headlines and cause public outrage often tend to emphasise seemingly unmeritorious claims, particularly in relation to very large estates. As a result, there are a number of myths circulating about the IFP Act and when a will can be contested. Unfortunately, these sorts of stories also seem to have left some people questioning the value of even making a will. Many of the myths are plainly wrong. We bust some of them below.
This seems to be a particularly common myth that has no basis in the legislation. The IFP Act is fairly simple. It provides that a person is ‘entitled to make a claim’ if they are the spouse, child or grandchild of the deceased. Parents and siblings can also make a claim if they prove to the court they cared for, or contributed to the maintenance of, the deceased person during his or her lifetime.
If someone is on the list of ‘people entitled’, they can bring a claim. If they’re not, they can’t. It doesn’t matter whether they’ve been left anything or not. It’s that simple.
Of course, whether any claim will be successful depends on a number of factors, including the size of the inheritance a person has been left. But the fact is that a claim will not be prevented simply because the claimant received a notional bequest.
As explained above, unless someone is a ‘person entitled’ to seek further provision, they cannot make a claim. That remains the case, irrespective of whether someone receives a bequest or not.
This myth is the biggest offender and one we hear frequently. Everyone should make a will, but it is particularly important for people who are concerned their estate may be contested.
Firstly, most estates are not contested, and in most cases the assets will be distributed in accordance with the testator’s wishes. If you die without a valid will the estate will be distributed according to legislation that deals with that scenario, which may result in an unintended or inappropriate outcome. Further, having a will – whether it is contested or not – makes the administration of your estate a more straightforward and less costly process for your loved ones.
Even if your estate is contested, the Court does not simply throw away the will and start again. The Court determines whether the claimant has been left without ‘adequate provision for their education, advancement and welfare in life’. This process involves a consideration of what the claimant has received under the will, if anything. If the Court considers the claimant has been left with ‘adequate’ provision, no adjustments will be made and the estate will be distributed in accordance with the will.
Should the Court consider that the claimant has not been properly provided for (and therefore adjustments must be made to the will), the Court must determine where that additional provision will come from (ie. who is losing out to increase the share of the claimant). Again, the will provides the starting point for this process. In many cases, even when further provision is made for a claimant, the majority of the estate will still be distributed in accordance with the will, subject to an adjustment in favour of the claimant.
Regardless of whether you believe there is a chance your will could be contested, it is important that you have a current will which accurately reflects your wishes. If a contest is likely, we can assist you to create strategies to remove assets from your estate and protect them from potential future claimants.
Should there be people entitled to bring a claim about under the IFP Act that you wish to exclude, having your will drafted by a suitably qualified legal professional who also keeps detailed notes of your wishes will help if your estate is contested
If you would like to make an appointment with a member of our Wills and Estates team to review or update your will, please contact us on (08) 8414 3400.
This article was written by Senior Associate, Victoria Gilliland, who is a member of our Estate Litigation team.