New legislation in relation to challenging a Will came into force on 1 March 2009. The Family Provision Act was repealed and replaced by the Succession Act (Family Provision) Act 2008 ("Succession Act"). This is part of the current attempt to create uniform succession laws in Australia.
The new Succession Act largely follows the scheme of the old Family Provision Act but employs some different language and there are a number of new or altered provisions. If you believe you may have a claim against an estate, or you are the executor or an estate, these changes may affect you.
Eligible Persons
One of the main changes is the amendments to the categories of eligible persons, which has had the effect of tightening the requirements. In order to make a family provision claim you must be an 'eligible person'. The Succession Act provides that the following are eligible persons:
(a) A person who was the wife or husband 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 wife or husband of the deceased person;
(e) A person who was, at any time, wholly or partly dependent on the deceased person; and, is a grandchild of the deceased person or was, at any 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.
An eligible person who falls into categories (a) – (c) can make an application as of right. However, an eligible person who falls into categories (d) – (f) has an extra hurdle to leap and must be able to demonstrate to the Court that there are factors warranting the making of the application.
Application Time Limit
Another significant change in the Succession Act is the reduction in the time limit in which an eligible person can file an application for a family provision order. The time limit has been reduced from 18 months to 12 months from the date of death of the deceased person. There is still provision to apply for an extension of time, however the applicant must establish 'sufficient cause' for the extension of time. The old Act allowed an extension of time by consent of the parties however the new legislation does not contain such a provision. It therefore appears that it will not be as easy to commence an application out of time.
Second Order
The Court now has broader powers to make a second family provision order to an eligible person. The Court can now make a second order if there has been 'substantial detrimental change' to the person's circumstances, or if there is later found to be 'undisclosed property' so that the estate was actually larger than thought at the time the order was made. Furthermore, a person who loses a claim may succeed in a subsequent claim if he locates 'undisclosed property'.
The Succession Act has now legislated that all family provision application matters must be referred to mediation before they can go to hearing. While this has been the practice of the Court for some time it is now compulsory.
Executor
There are some new provisions in the Succession Act affecting the role of the Executor. There is added protection for an Executor if they distribute in accordance with the Act. It has also now been legislated that the Court can order that final or partial distribution of the estate be restrained pending determination of the family provision application.
Costs
There has been discussion lately in relation to the costs associated with family provision applications and there have been some calls for the Court to put a cap on costs. While this has not happened, the Court does have a number of powers which allows it to make costs orders. The new Act has also now determined that small estates are those valued at less than $750,000.00 and there will be particularly stringent costs orders applied to those estates.
There are further legal and procedural changes in the Succession Act which will affect family provision applications in the future. If you would like to find out more information please contact us on 9635 8266 or connect@champion.com.au
SUZANNE YOUNG
Lawyer
Estate Litigation
