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Estate Litigation – The Different Types

Estate Litigation – The Different Types

Estate Litigation

You may have heard of it, but what actually is it?

Anecdotally, it seems that estate litigation is becoming more and more known. This may be due to increased media reporting on the various estate litigation matters, but it’s probably also tied to the fact that Australia has an ageing population, and we’re on the verge of Australia’s largest intergenerational wealth transfer in history.

Within the broad umbrella term of estate litigation is a wide variety of specific legal challenges, contests and disputes. Following is a brief summary of the different types of estate litigation, each of which O’Connor Ruddy & Garrett can assist you with.

Further Provision Application / Family Provision Application

Sometimes abbreviated to “FPA”, and sometimes also called Part 4 Claims or Testator’s Family Maintenance (“TFM”) claims. In family provision matters, an applicant must establish that they have not received adequate provision from the estate of the deceased person, and applies to the court to have an order made for their proper and adequate provision from the estate of the deceased person. There are specific categories of eligible claimants, and strict timeframes involved – each of which vary from State to State.

As the applicant seeks to alter the terms of the will, it’s referred to as contesting the will. If the applicant can establish the merits of their claim, then they may receive an award of provision in their favour.

Challenging the Validity of the Will

Referred to by lawyers as Solemn Form Probate proceedings. In these proceedings, the claimant challenges the validity of the will, and seeks to invalidate the last will (or wills) of the deceased person. If a will is successfully challenged and invalidated, then the next-most previous will becomes the last will of the deceased person (unless also invalidated), and if there is no previous valid will then the person dies intestate.

Reasons a will may be invalid include that the testator didn’t have capacity to make a will (such as mental infirmity), a lack of knowledge and approval of the terms of the will, and duress/undue influence.

Construction of the Terms of the Will

Best practise is for a will to be drafted in clear, unambiguous and uncontradictory terms. If there is any ambiguity or confusion about how the terms of a will operate, then it may be necessary to obtain a court declaration as to what the terms of the will actually mean – and this often affects the value of a beneficiary’s entitlements. For example, a clause in the will:

I give $100,000 to each of Joe Bloggs, Jane Doe and John Citizen in equal shares

Could mean either $100,000 split between those 3 people, or $100,000 to each of those 3 people (i.e. $300,000 total). There are special court rules concerning how the terms of a will are to be construed, and determining what was meant in the will.

Rectification of the Will

Similar to construction of the terms of a will, sometimes a will may have a clerical error or is in terms that do not give effect to the deceased’s intentions. For example, a gift may incorrectly describe property or the identification of intended beneficiaries. Where this occurs, an application can be made to the court to have the will rectified to give effect to the deceased’s actual intentions.

Probate Proceedings

Obtaining a grant of probate of a will is a court proceeding itself, but where it isn’t contested or challenged in any way, it is a relatively straightforward affair that doesn’t involve any appearance at the court – it is decided “on the papers”. However certain circumstances can require a court hearing and determination by a judge. This may sometimes involve determination of issues such as where only a copy – and not the original – will cannot be found, or where a will is not in compliance with the legislative requirements under Queensland’s Succession Act 1981.

Compensation for Lost Benefit

This type of proceeding is to compensate an intended beneficiary under the will of the deceased, who has lost their beneficial entitlements due to the actions of an attorney for the deceased person prior to their death. For example, say if a will gifts the testator’s house to person A, and everything else to person B. Prior to death, the testator becomes unwell and so their attorney sells their house and uses the sale proceeds for a nursing home bond – the effect of which is that the gift of the house to person A fails, and the whole estate passes to person B. Person A can then apply for compensation for their lost benefit, being the value of the house. Strict timeframes apply to these matters.

General Litigation, involving the Estate

Sometimes it is necessary for a deceased person’s estate to sue other entities, to ensure that the full value of the estate is called in and subsequently distributed to the beneficiaries. Some examples include debts owed by others to the deceased, but this can also include continued litigation such as personal injuries matters started before the person died.

Removal of an Executor

An executor is under a duty to act in the best interests of the estate, and to get in and administer the estate for the benefit of the beneficiaries – thankfully, most executors are diligent in this regard. Where they are not, or where they are acting contrary to the interests of the estate and the beneficiaries, an order can be sought for their removal – depending on circumstances, this may result in appointment of a different executor named in the will or an administrator (which may include an independent, professional administrator).

Citation of an Executor

A person appointed as executor is under no obligation to act. Usually in that circumstance, they will renounce their role, by signing a Renunciation to that effect. If they refuse to even take this simple step, then it is necessary to have them cited, being a formal court proceeding requiring them to take up the executorship within a specified time, failing which the court will pass over (i.e. ignore) their appointment as executor and proceed to the next-authorised person to administer the estate.

Application for a Statutory Will

Queensland’s Succession Act 1981 permits a will to be made for certain persons who lack capacity to make their own will.

This can be used to make a will for a person who has never had capacity, such as persons injured during childhood who have received a substantial compensation payment. If left to the intestacy rules, their estate may go to persons who are, for all intents and purposes, undeserving. A statutory will can ensure their estate goes to the people who the person most likely would have wanted to benefit.

Similarly, where an older person with a will loses capacity, their will may not accommodate circumstances that change after they lose capacity. A statutory will can ensure their will is updated, so long as the court is convinced the proposed updated will is a will the person would have made, if they had capacity. For example, if a beneficiary became bankrupt or was embroiled in family law property settlement proceedings, then the testator may not want their inheritance to be affected by those matters, and so it may be appropriate to update the will with mechanisms for protecting the beneficiaries’ intended inheritance.

Informal Wills

In order to comply with the formal legal requirements, a will must be: (1) in writing; (2) signed by the testator (or by someone on their behalf, at their request) with the intention of making the will; (3) witnessed by 2 adults, in the presence of the testator.

Where a will doesn’t comply with those requirements, it can still be admitted as a will, but will require the court to determine the matter. Some examples include a will written on post-it notes, a video recording will, an unsent text message will, as well as wills made with only a single witness.

This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.

 Liability limited by a scheme approved under professional standards legislation (personal Injury Work exempted).

 

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