The traditional family planning approach to inheritance is to cascade through the generations. A grandparent’s estate will generally be entirely left to their spouse, or if their husband or wife has passed away before them, to their children. The children are expected eventually to leave their inheritance to the deceased’s grandchildren, great-grandchildren and so on. This approach can be challenged in New South Wales by a Family Provision Claim by grandchildren, in certain circumstances, to cut short the cascade.
The case of Wilcox v Wilcox (No 2)  NSWSC 88 (Wilcox) decided in February 2014, saw His Honour Justice Pembroke deliver a vitriolic judgment when he found in favour of the grandchild. The court provided the grandchild with a proportion of his grandfather’s considerable estate, over the claim by the child’s mother, the deceased’s child, to whom he left his entire estate with the intention that it would be provided to his grandsons in time, after their mother passed away.
What are Family Provision Claims?
Under the Succession Act 2006 (NSW), specific categories of people are permitted to make a claim against the deceased’s estate for adequate provision for the proper maintenance, education or advancement in life. The claims are made on the premise that “proper” provision was not made in the deceased’s last Will.
The rationale for the legislation is that the person making the Will should be wise, just and provide for those who are dependant upon them. Gone are the days when a wealthy eccentric with dependants can leave everything to the RSPCA unchallenged.
Of course not anyone can make a claim. There are a number of hurdles for a potential claimant, namely:
1. They must be within a specific category of person (known as “eligible persons”) with a relationship with the deceased;
2. There are factors which warrant the making of the application; and
3. They must be in financial need for provision from the Estate.
Grandchildren are eligible persons to make a claim against a grandparent’s estate if they were, at any time, wholly or partly dependent on the deceased person.
In the Wilcox case, the grandchildren were dependant because their grandfather paid for their private schooling at The King’s School, for further education at Longreach Pastoral College and provided them with paid work and accommodation on his properties. This is a clear example of dependence, where the grandchildren required their grandfather’s financial support to meet their costs of living, even as adults. The grandchild was awarded $387,000.
Other cases demonstrate that partly dependant grandchildren with less financial contribution from the grandparent can also claim against the estate, however it must be more than occasional gifts.
What Does This Mean for Estate Planning?
A practical consideration for all individuals planning their estates is:
1. Have they provided for anyone who might be an eligible person?
2. Have they provided for anyone dependant upon them at the time of making their Will?
3. Is the provision reasonable, given the size of their potential estate?
Our Estates and Estate Litigation Team frequently provide advice on these issues and act in numerous Family Provision Claims. Please contact us if you are updating your will or you are dealing with the Estate of a loved one who has recently passed away.