Beware! Not all eligible persons have a valid Family Provision claim

Beware! Not all eligible person have a viable Family Provision claim!

The relevant law in New South Wales governing Family Provision Claims is the Succession Act 2006.

Eligible persons in Family Provision Claims in NSW

Section 57 of the Succession Act 2006 defines eligible persons who may apply for a family provision order from the deceased’s estate and includes:

 (1) --

(a) the spouse of the deceased person at the time of the deceased person's death,

(b) a person with whom the deceased person was living in a de facto relationship at the time of the deceased person's death,

(c) a child of the deceased person,

(d) a former spouse of the deceased person,

(e) a person--

(i) who was, at any particular time, wholly or partly dependent on the deceased person, and

(ii) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member,

(f) a person with whom the deceased person was living in a close personal relationship at the time of the deceased person's death.

 Having satisfied the eligibility criteria, according to section 59 of the Succession Act 2006, an applicant then needs to prove to the Court that:

(1)  (c) at the time when the Court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the person in whose favour the order is to be made has not been made by the will of the deceased person, or by the operation of the intestacy rules in relation to the estate of the deceased person, or both.

 (2) The Court may make such order for provision out of the estate of the deceased person as the Court thinks ought to be made for the maintenance, education or advancement in life of the eligible person, having regard to the facts known to the Court at the time the order is made.

 The Applicant’s Resources

Section 60 of the Succession Act 2006 sets out the matters that the Court may consider when determining whether to make a family provision order, and the nature of any such order.

 It is not enough to be an eligible person to make an application for a family provision order but the applicant must prove they have a need for provision from the estate. 

 The Court will consider, not only the value of the estate but:

Section 60(2)(d):

the financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate

 What this means is that an applicant, while being an eligible person, may have sufficient personal resources such that they do not need provision from the deceased’s estate.

 For example, the estate may have a net value of $1,500,000.  However, the applicant has personal assets of $4,500,000.  In this scenario, the applicant may be unsuccessful in applying for a family provision order.

Disclosure in Family Provision claims

Disclosure of personal resources is mandatory under section 60(2)(d) of the Succession Act 2006.

It is vital that an applicant disclose to their solicitor, at the start of a matter, all their personal assets and their values in order to receive correct advice on the viability of a claim. 

Assets are not limited to those in New South Wales but includes all assets in every jurisdiction. Failing to disclose all assets may result in receiving incorrect advice at first instance.

• Advice on the viability of a claim is likely to be revised if significant personal assets are later disclosed by the applicant after initial instructions have been taken.

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