Family matters and inheritance claims
Western Australia’s Family Provision Act legislation is often criticised as allowing for ‘litigious interference’ in a will maker’s final decisions about their estate. However, a recent decision by the Supreme Court of Western Australia has reaffirmed the benefits of this legislation in allowing the Court to ‘rebalance’ the effects of an unwise or unjustly made will.
The legislation is the Family Provision Act 1972 (WA) (“the Act”) and it allows for certain ‘classes’ of beneficiaries to make a claim for (further) provision from the estate. Eligible claimants include spouses, de factos, children, grandkids, parents and in some cases step-children.
Whether a claim will be successful or not is a complex answer and can depend on: the size of the estate, the financial need and circumstances of the claiming party, the needs of other competing beneficiaries and the relationship the claiming party had with the deceased.
The decision of the Court in BALLA -v- ROBERTO BEI as Executor of the Estate of The Late Giovanni BEI  WASC 348 (“Balla”), involved a claim by 2 daughters of the deceased who had been excluded from their father’s estate.
The estate was valued at just under $300,000 and by the deceased’s will was to be divided equally between the deceased’s son and a friend who had become a kind of ‘substitute daughter’ to the deceased. The deceased’s son was the executor of the estate.
This was considered a very small estate for litigation purposes, given the legal costs that are involved in such claims under the Act.
The relevant facts
The deceased and his wife had emigrated to Australia in the 1960s and had several children. The wife died several years before the husband. At the date of his death the deceased had 4 surviving adult children.
The executor son had suffered a head injury early in life and was unable to work after this. He received an injury compensation payment and provided the father with a sum of money from these funds to help pay off the father’s mortgage.
There was also much evidence that the daughters had worked unpaid in a family business with the parents for many years and had each provided their mother and father with care and assistance such as cooking and cleaning and also with financial assistance where they could.
There was also another child who was not included in the will and also did not take part in the litigation.
The evidence showed that the family was initially very close, and the parents had spent a significant amount of time with their grandchildren.
The daughters had ultimately become estranged from their late father following the death of their mother and the father’s decision to take up with a new partner (whom he later married) in what the daughter’s considered to be a very short space of time. This estrangement went to the extent that the deceased did not attend the christening of a new granddaughter.
The deceased first moved interstate to be with his new partner and then due to health concerns returned to Perth where he later married his new partner. Ultimately he ended up living next door to the ‘substitute daughter’ and there was some evidence that she then helped the deceased and his new wife with tasks such as taking their medications, cooking and cleaning (all allegedly unpaid).
The new wife was not a beneficiary and she was also not involved in the claim.
There were also many confusing allegations of funds being lent and gifted both by and to the deceased to the friend.
There are a lot of other facts and unfortunate events that go to the colour and character of the different parties involved and the evidence they gave during the trial, but the above is a simplified version of quite a complex family dynamic.
The daughters made a claim on the estate for provision for 20% and 30% of the estate each. The daughters were each under financial pressure and struggling with various health problems (for them and their spouses) and were only able to cover their monthly expenses by eating into their superannuation.
To make the claim, the daughters each had to file affidavits setting out their full financial circumstances detailing income, expenditure and assets and liabilities (including that of their spouses) and why they had a need for provision from the estate.
The son did not oppose the application but sought for the daughter’s provision to come from the half of the estate going to the father’s friend instead of his own half.
The deceased’s friend vigorously opposed the daughter’s application. This included the argument that one of the daughters was not a biological child of the deceased. Paternity can be a complex issue and, in this case, required expert evidence from a lawyer in Italy to confirm whether the daughter was a child of the deceased.
The friend also advanced the argument that the daughters had essential ‘forfeited’ their right to provision from the estate of the deceased given their estrangement from him in his later years.
The friend argued that she had a moral claim to the estate, given that she had provided so much care and assistance to the deceased before his death.
The Court ultimately found that:
- the daughter was a child of the deceased;
- both daughters’ financial circumstances meant that they were deserving of an inheritance from the estate;
- the estrangement was not particularly the fault of the daughters and in any case was not enough here to refuse their claim;
- despite some issues with the quality of the evidence given by the friend, she also deserved some provision from the estate; and
- the son, given his health circumstances also deserved some provision.
Here the Court divided the estate as follows:
- 20% and 30% to the daughters as claimed;
- 25% to the son; and
- 25% to the friend.
Further, the Court was clear that given the very small size of the estate, that the orders made were not to be seen as giving ‘sufficient provision’ to any party. If the estate was larger then different orders would likely have been made.
As yet we are not aware of any orders made as to costs and it is not clear how much of the shares of the estate ultimately awarded to each party will be chewed up by their respective legal costs. The legal bill for each party will certainly run into the tens of thousands.
What this means for you
Estate planning can be a complex exercise. The Balla case clearly demonstrates the many twists and turns that a family’s history can take and the many competing demands that a will maker can have in their mind when they are making their will.
The loss of a long-term spouse or partner can also deeply affect people in very different ways, and it is difficult standing on the outside, to blame a person for wanting to seek comfort and companionship following such a loss. Whatever your personal feelings about the appropriateness or otherwise of these actions, this is not an uncommon development in many families across Australia as we deal with the side effects of an ageing population.
In this case the family provision legislation was able to be used in a positive way so that objectively deserving claimants were able to share in their father’s estate.
In our opinion, this case also highlights the importance of having proper, considered advice about the effect of excluding a family member from your will and, if it is your wish to do so, then to investigate different strategies to achieve this objective. For example, if the deceased had held assets in a self-managed super fund, joint account or a family trust then the outcome here may have been very different.
Even in circumstances of a small estate the Court is willing to intervene and redistribute an estate if the claimants can demonstrate a clear financial need.
How we can help
At Lynn and Brown Lawyers we have a dedicated team of specialist estate lawyers able to advise you on the safest and most effective ways to manage your estate planning.
We are also well versed in making and defending claims for provision from an estate. Our advice in such matters is always guided by what the most cost-effective or commercial outcome will be for you and your family, keeping in mind the stress that such litigation can cause.
If any of the issues raised in the Balla case or this article are relevant to you or your family, please feel free to contact one of our team to see how we can help.
About the author: After completing a double degree Bachelor of Arts (Politics and International Relations) and a Bachelor of Law, Matthew was admitted into the Supreme Court of Western Australia in 2016.