On 21 October 2014 the Justice Legislation Amendment (Succession and Surrogacy) Bill 2014 Act (the Act) received assent – it is now official, the landscape for Estate litigation has changed.
What is the impact?
The Act changes the law as to who can challenge an Estate in Victoria (Estate claim). The Act came into effect from 1 January 2015 and will apply to:
- an estate of any person who dies on or after this date; and
- any claims made after this date.
Who can claim?
There are essentially two categories of persons who can claim. Only those who are ‘eligible’ and who fit into a defined category can claim, they are:
Group one – related/immediate family member:
- a spouse or domestic partner;
- a child or stepchild of any age with or without a disability;
- a person who for a substantial period during the life of the deceased believed that the deceased was his/her parent and was treated by the deceased as a natural child of any age; and
- a former spouse or domestic partner (only if no property settlement reached).
Group two – others:
- a grandchild;
- a registered caring partner;
- a spouse or domestic partner of a child of the deceased (including a step child or person who for a substantial period during the life of the deceased believed that the deceased was his/her parent) if the relevant child of the deceased dies within one year of the deceased’s death; and
- a person who, at the deceased’s death is a member of the household in which the deceased was also a member (or had been in the past and would have been likely again in near future have the deceased not died).
The tests for bringing a claim
The Act sets out certain tests must be satisfied before a court can make a family provision including that:
- the person is an eligible person;
- that at the time of death the deceased had a moral duty to provide for the eligible person’s proper maintenance and support;
- the distributions of the deceased’s estate fail to make adequate provision for the proper maintenance and support (whether by Will or intestacy laws); and
- if the eligible person falls into Group two that person must be wholly or partly dependent on the deceased for proper maintenance and support.
Factors a Court will take into account
In determining what provision should be made for an eligible claimant, the Court will look at:
- the degree of the deceased’s moral duty;
- the degree to which the deceased’s estate fails to make adequate provision for the proper maintenance and support;
- for a person who falls into Group two, the Court must assess whether or not that person is capable, by reasonable means of providing adequately for their own proper maintenance and support.
Other factors the Court will take into account include:
- the nature of the relationship and duration;
- the obligations and responsibilities of the deceased to the eligible person, any other eligible person or beneficiaries of the estate;
- the size of estate;
- the financial resources of the eligible person, any other eligible person or beneficiaries of the estate, any physical or medical or intellectual disabilities, the age of the claimant;
- the liability of any other person to maintain the eligible person;
- character and conduct of the eligible person;
- the effects of a family provision order on the amounts received by other beneficiaries; and
- any other matter that the Court considers relevant.
What is a disability?
The definition of disability has been amended and includes:
- an intellectual, cognitive, physical or psychiatric impairment (which is likely to be permanent); and
- the impairment results in substantially reduced capacity to communicate, socially interact, learn, move around or provide self-care or self-management.
Adult children can bring a claim against the Estate, irrespective of whether or not they were dependant on the deceased at the time of the deceased’s death however the Act casts an obligation upon the Court to assess that person’s ability to, by reasonable means, provide for their own proper maintenance and support.
It is likely there will be a significant increase in the number of persons who become a registered carer, with Births, Deaths and Marriages. Those persons who can be registered as a ‘registered caring partner’ do not need to be a direct family member.
The positive outcome is that a Willmaker’s fundamental rights to leave their estate as they see fit is strengthened and deceased estates will be less susceptible to opportunistic claims.
For more information, please contact a member of our Estate Group on (03) 8600 8885.
Note: This update is a guide only and is not intended to constitute legal advice.