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Challenging a will: money or family?

Fights over wills provide an appalling insight into the bitterness, anger, and recrimination that can tear families apart. Even when quite small sums are at stake, adult children, ex-spouses, stepchildren and others will stop at nothing. It’s enough to make a person turn in her grave.

A recent report shows why increasing numbers of Australians are challenging wills in court: they’ve a good chance of success. Judges and mediators are able, in effect, to re-write a person’s will. They can even ignore a parent’s written statement that explains why this ingrate daughter or that callous son is to get nothing.

The report called Having the Last Word? is the result of a major investigation under the aegis of the University of Queensland into will-making and contesting wills. (It’s fascinating reading). It found 74% of cases challenged in court resulted in the will being changed, and 87% of those that went before a mediator. No wonder law firms appeal to would-be clients with advertisements that ask “Have you been left out of a will?”

The high level of contesting wills – particularly evident in NSW – can destroy family harmony forever and for generations, and whittle away the estate’s value in costly legal fees. Many of you probably know this. The study found 18% of those involved in a dispute said family relations had been poor before the contents of the will were disclosed but this rose to 26% afterwards. The report’s authors recommend measures to reduce the level of fights over wills. But the lawyers and others consulted were pessimistic.

“Some people have an unhealthy sense of entitlement and don’t respect the wishes of the will maker,” one told them. “You can’t draft documents or legislation to change that.”

Trawling through some cases that went before the NSW Supreme Court in recent years, I was mesmerised by the ghastly family dynamics on display. In one case a woman cut her stepdaughter out of her will, and explained in a statement: “I make no provision in my will for [DM] who claims to be a daughter of my late husband as she has ill-treated both myself and my late husband for many years and has made no attempt to contact or have anything to do with me.”

In this case DM convinced the judge it was her father’s and stepmother’s conduct that had caused the rift. [“My stepmother] is a horrible person,” DM said. “They [shut] the door in my face for 47 years.” She was awarded $75,000. Her legal costs that came out of the estate were $55,000.

In another case two daughters were cut out of their father’s will because, according to the statement he left, “they make no attempt to contact me either by telephone or in person. No cards are sent to me either at Christmas or my birthday… I do not feel obliged in any way to make any provision out of my estate for their benefit.” The daughters were awarded $9,665 and $7,750 because the judge did not believe the father’s complaints were valid. The father’s friend, who was to inherit the small estate, spent $16,500 or 25% of its value, defending the action. This is madness.

It turns out we’re not entirely free to give away the family silver to whomever we want. Our freedom is balanced by laws that allow courts to ensure family members (and others) who fit the criteria are adequately provided for out of the estate.

Irrational and punitive parents and spouses can treat family members unfairly in their will, or come under malign influences. But lawyers such as Lesa Bransgrove, of Bransgroves Lawyers, believe the balance has tilted too far against the will maker. “What we’re seeing is a view in the courts that the responsibility of parents goes beyond the time when children are dependants,” she said.

Judges had expressed a view that the community expected estates could be used to help adult children in retirement if they had no superannuation, provide them with a deposit on a home, or assist with the education of grandchildren.

The Queensland University study found a will is widely regarded as a means to distribute “family money”. Not many Australians leave bequests to charity in their will (Muslims are the exception here); and if they do, charities report court challenges from family members are common. The view of wills as “family money” may be fostering a “sense of entitlement” by family members, and fuelling the challenges, the report says. There’s some evidence “some family members are greedy rather than being in need.”

Professor Linda Rosenman, one of the report’s authors, said: “It’s probably almost impossible to draw up a ‘contest proof’ will. It would be more useful to address the family dynamics at the time of making the will rather than leaving it for the family to ‘fight out’ after death.”

Elder law specialist Rodney Lewis says he didn’t believe it was too easy to contest a will and attributed the high success rate to lawyers having already screened out weak cases. To avoid feuds, Lewis urges will makers to communicate with their family. Where they’re departing from equal distribution – or giving a motza to the dog home – make sure everyone understands the reasons. Writing a statement of explanation is not a total waste of effort in the event of court action, he says. “But any defects in logic or errors of fact will undermine its authority.”  So take care.

 

Adele Horin was the social issues journalist with the Sydney Morning Herald for 18 years prior to her ‘retirement’. This article was first published on Adele’s blog (adelehorin.com.au), and is reproduced with her permission. Adele is recovering from an operation for cancer and we wish her the best.

 

4 Comments
Donal Griffin
October 31, 2015

Dear Adele

I hope you bounce back quickly. It is 100 years since NSW allowed spouses and then children to challenge wills which cut them out of estates which the community properly IMO thinks need fixing. The NSW legislation does not use the word "fair" but it is the concept that willmakers need to address to manage family expectations. It can usually be achieved but requires planning with the help of good financial planners (who do not get commission or kick backs for the time they invest in this, ìt has to be said) and lawyers who understand the changing attitude of the courts in this area.

Good article. Thank you.

Vishal Teckchandani
October 27, 2015

Dear Adele,

Firstly, wishing you a speedy recovery from your operation.

Your article is a serious eye-opener into the emotional and financial vortex family units can get caught in as a result of will disputes. Alongside compliance, portfolio and taxation strategies, I think there needs to be greater emphasis and 'investment' in ensuring strong family relations (or if that fails, robust estate planning strategies) to avoid torturous disputes like the ones you discussed. Just my two cents.

Vishal

Bruce
October 23, 2015

Great article Adele

Thanks for highlighting the report. Always good to raise awareness of these issues.

Financial planners could do more in prompting clients to advance-manage these issues better so that there is less debris left in the wake. People should be prepared to pay fees for sound practical advice before they go to their solicitor for will reviews

Housing wealth presents a particular problem in future where step families exist and access to, or lack of housing for, younger generations will cover a wide spectrum.

Lifetime annuities (without reversionary payments) present an opportunity to satisfy income security to your death and distribute wealth in advance along the way and help the needy family members, leaving little left to fight over at the end. Sensible communication to all the family about these arrangements also helps.

Due to increased life spans, when most people die in later years, grandchildren will be predominantly aged in 20's and 30's and children will be retired. Wills need regular review to take account of kin circumstances if that was the original intention.

Bruce

Kym Hughes
October 22, 2015

Hi Adele.

I have to say that was well written and rather an eye opener into the world of will making and challenging.

Having a plan and will In place which while is equitable to both my children, i will need to go back and review it with extra provisions/statements etc.


Thankyou Adele

Kym

 

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