Skip to content 
In this 4 part series, we discuss common problems that arise in relation to Wills and more importantly, ways in which to deal with them. As the writer is a lawyer in NSW, the principles of law discussed are those in NSW only.
Part 1: Relationships in your senior years
As people are living longer, they are also entering into relationships later in life. A common scenario is that a person who has been married at least once before and has children (who have now become adults), wants a companion in life but does not want to risk that person making a claim against their assets (“their estate”) after they have died, to the detriment of their children.
In fact, both parties to the relationship may feel the same about this, and may agree that the assets each person owns, should pass to his or her own children.
If the relationship develops, then it is possible that the two people may become de facto spouses, even if they maintain separate residences. That may mean that on the death of the first to die, the survivor is eligible to make a claim, as a de facto spouse, against the estate of the deceased person, to receive provision, or greater provision from their estate, than the deceased person has left for them. This is commonly referred to as a “family provision claim” and is made pursuant to Chapter 3 of the Succession Act 2006 (NSW).
Memories fade about agreements that may or may not have been made and the survivor often feels entitled to receive some payment or asset in light of the care and support they provided to the deceased, or the contributions they made towards the maintenance or improvement of the deceased’s assets, or to keep a roof over their head.
The children, however, staunchly maintain that their parent wanted them to receive the entirety of their assets.
So, what can be done about this?
People often go to see their solicitor about this conundrum “after the horse has bolted.” That is, they go to see their solicitor about making a will, leaving everything to their children, after they have formed a relationship with someone (often some years later) and after their partner has already made significant contributions to their welfare and/or property.
In NSW, the only way to ensure that a person cannot make a family provision claim against your estate after your death, is to have that person agree to “release” or forgo their right to do so and to have that agreement (or more specifically, the release of a right to bring such a claim) approved by the Supreme Court of NSW. That exercise is much simpler to achieve if the parties to the relationship are at the beginning of the relationship and agree to make such an agreement, which is little similar to a pre-nuptial agreement, except this time it deals with what is to occur (or not to occur) on death, rather than separation.
In deciding whether to approve of the release of a right to bring a family provision, the Court has regard to all the circumstances including whether:
- it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and
- it is or was, at that time, prudent for the releasing party to make the release, and
- the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and
- the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.
If the application is made at the beginning of the relationship and if both people in the relationship agree to give up the right to make a family provision claim against the estate of the other, the Court may be persuaded that it is prudent and to the advantage of each person providing the release, so that they can develop the relationship freely and provide any support they wish to, to the other person, without fear that will establish the eligibility of the other person (as a de facto spouse) to make a claim against their estate or will strengthen that claim, as the years pass. Making such an agreement may also mean that the children feel more comfortable about the relationship between their parent and his or her new partner or companion.
Of course, a gift can still be left in a will for a partner or companion, but if that person has released their right to bring a family provision claim and that release has been approved by the Court, the partner or companion cannot seek more from the Court after the death of the will-maker, except in limited circumstances (such as fraud or non-disclosure).
Liability limited by a scheme approved under Professional Standards Legislation
Disclaimer: This post contains information of a general nature only and is not intended to be used as advice in relation to a specific matter. Although every care has been taken in preparing the document, it may not be accurate or complete, particularly in the context of specific circumstances. MJM Lawyers disclaims responsibility for any errors or omissions.
