Recent studies show that about 60% of all Australians have a will with the number rising to over 93% for those aged 70 years and above. Most people who have wills do so as they believe it is important that they provide for their loved ones, primarily their children and their spouse or partner.

There is however no data as to the number of these wills being challenged when the will maker dies. Based on newspaper reports and our experience as legal practitioners, there is an increasing number of wills that are challenged by family members who were left out of the will or who felt that their inheritance was inadequate.

We often read in the newspapers of high-profile claims against a deceased estate.  A recent example is the estate of the former Australian Prime Minister Bob Hawke who died in 2019.  In his will, he left the bulk of his $18 million estate including his home in Sydney worth about $15 million to his second wife, Blanche d’Alpuget. He gave $750,000 to each of his children from his first marriage. One of Bob’s children sued his estate for an additional $4.2 million claiming that her father’s gift of $750,000 did not meet her needs. She stated in her affidavit that she had mental health issues, was reliant on welfare and needed more money from the estate to buy a house, pay for dental implants and other expenses. This claim went to mediation and recently settled for an undisclosed sum.

It is not only large estates that experience challenges to the will. We see increasing challenges to wills in smaller estates with assets of less than $500,000.   The impact of such challenges means the asset pool available for distribution is reduced as a result of the legal fees payable by the estate in defending the claim. Challenges also mean that the distribution of the estate is delayed, impacting on beneficiaries who have an urgent need for funds. Often, challenges to wills result in close family members being estranged from each other.

Hence, while making a will is a good start, consideration must also be given at the time when the will is being made to minimise challenges to your will. Some strategies for consideration are as follows: –

• Understand which assets fall under your estate and therefore pass on to the beneficiaries named in your will and which assets fall outside your estate and how such assets are passed on following death. This will ensure that you make informed decisions as to how your assets are to be distributed upon your passing.  For example, the deceased’s share in jointly held real estate may not fall under the will and instead pass on to the surviving joint owner by operation of the law.  Super death benefits may also not fall within the estate and is instead paid out to the person you nominated in a nomination form submitted to the super fund prior to death. If no nomination is made, the super death benefits will be paid by the superannuation fund to family members who are financially dependent on the deceased.
• Understand the law of succession and the legal obligations of a will maker. Under Australian law, a will maker is obliged to make proper and adequate provision for his or her dependents. In Western Australia, “dependents” include the parents of the deceased, a spouse or de facto partner, children of the deceased and grandchildren who were receiving financial support from the deceased at the time of death. Except for grandchildren, the law does not require these dependents to be receiving financial support from the deceased prior to the time of death. The dependent who makes the claim must however show that he or she has a need to be provided funding or additional funding from the estate. Hence, it is imperative that you consider the financial situation of your dependents and whether you have or are adequately providing for such dependents.
• Consider whether you have made substantial gifts to any beneficiary during your lifetime as such gifts may amount to an advancement of your intended beneficiary’s share of the expected inheritance from your deceased estate. These substantial gifts made during your lifetime ought to be taken into account when determining the distribution of your estate under your will.
• Reconsider your will and if required seek legal advice and make a new will when there is a change in your family circumstances including marriage, divorce, birth of children, financial support of grandchildren and changes in the financial circumstances of your dependents.
• If you wish to leave a family member out of your will, it will be prudent to make a statutory declaration at the same time as the will is entered into providing the reason why you left out your dependent.
• If appropriate, discuss your plans with your beneficiaries so that issues relating to your plans may be dealt with and resolved by you and your family members prior to your death.
• If the will maker is elderly and suffering from physical or mental issues, it is important that at the time the will is being made, a medical practitioner certifies that the will maker has “testamentary capacity” meaning that the will maker has the mental capacity to understand his or her financial situation and to make financial decisions contained in the will. This will reduce challenges to the will on the basis that the will is invalid due to the incapacity of the will maker.

Finally, you can avoid a challenge to your will by giving away your assets to the person who you wish to benefit prior to your death. You can also place your assets within a trust for distribution to the beneficiaries named in the trust. Assets given prior to death or placed in a trust do not fall within the estate. Such assets are outside the scope of a challenge to your will unless the claimant is able to show that you did not have mental capacity when you made such gifts or when you established the trust.

Contact Robertson Hayles Lawyers at (08) 9325 1700 or by email at enquiry@robertsonhayles.com for legal assistance in estate planning and making your will.

Note

The above content is only intended to provide a general overview of the topic discussed. It is not intended to be comprehensive, nor does it constitute legal advice. You should seek legal advice specific to your circumstances before acting or relying on any of the above content.