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Settling Claims Against your Estate During Your Life

Wills & Probate

When advising our clients about their wills and other testamentary arrangements, a common concern we hear is that a step-child or other close relative might dispute the will in the future. Is there a way to guarantee that a particular person will not bring a claim against your estate after your passing?

In NSW, the answer is “yes”. The Succession Act permits the court to approve a release of a person’s claim against an estate at any time, including before the testator has died. Such a release was granted by the court in November 2014 in a matter of Oxley v Oxley, which involved a son giving up his right ever to bring a claim against his mother’s estate.

In Oxley, the son and his mother had been involved in litigation involving a house in Pagewood which the mother owned, but which the son had refused to vacate. The mother sought orders for possession of the property, and had a substantial claim against the son for unpaid rent and other entitlements. The mother had also incurred substantial legal fees trying to evict her son. Her losses including costs were over $100,000.

The court dispute over the property was settled on the basis that the son leave and never return to the house, each party bear its own costs, the mother forsake her claim for rent and other entitlements, and the son give up any right to challenge his mother’s estate after her death. The agreement that the son give up any right regarding his mother’s estate was only enforceable if the Supreme Court granted a formal release of that right under the Succession Act. The mother had a will that made equal provision to each of her children, including the son, and she undertook not to change that will in the future.

In granting the release, Justice Hallen held that is was a reasonable arrangement, given that the son was still guaranteed an equal third of his mother’s net estate, and had avoided a substantial liability to her in the manner in which the possession proceedings had been settled.

Each estate planning situation will be different, but it pays to be a little creative. For some, it may be worth considering whether a release of this sort might be a useful and valuable estate planning strategy.