Legal claims on grandparents’ estates are expected to rise dramatically. Contact our expert wills and estate legal professionals to protect the future of your estate.
Grandparents’ roles have evolved over the years and can sometimes involve financial support or care for their grandchildren. Although this can strengthen bonds, unexpected legal challenges in estate planning may arise in the future. Specifically, grandchildren may contest a grandparent’s will through a family provision claim as observed in Curtis vs Curtis [2023] NSWSC 1164.
Background and Implications of Curtis vs Curtis
The grandchildren of Mr Barry Curtis (the deceased) made claims on his estate on the grounds of dependency based on the Succession Act 2006. In his will, the deceased named his son, Rodney Curtis (the grandchildren’s uncle), as the sole beneficiary. The judge ruled that the grandchildren were indeed partly dependent on the deceased. Consequently, the judge made provisions for the grandchildren’s eligibility to receive 20% of the sale of the deceased’s property.
This case illustrates several important aspects of family provision claims by grandchildren in NSW:
- Grandchildren can be eligible to make a claim if they can demonstrate dependency;
- The court will consider factors beyond just financial dependency;
- The needs of other beneficiaries (in this case, the son) are also taken into account; and
- The court has discretion in determining what constitutes “adequate” provision.
Dependency Under Family Provision Claims
In most states, grandchildren can contest wills if they can prove that, at some point, they were financially dependent on their grandparents. However, in NSW, these family provision claims may find support from certain conditions of section 59 of the Succession Act.
Key provisions related to grandchildren’s claims of dependency in NSW
- Eligibility: Grandchildren must demonstrate that they were dependent on their deceased grandparent at the time of their death or at some earlier time.
- Dependency Requirement: Partial or full reliance on the deceased at any one time for their upbringing, education, or career growth. Nonetheless, dependency extends beyond financial matters and includes emotional or physical support.
- Nature of the Claim: The treatment for grandchildren is similar to those for other eligible applicants, such as children or spouses. However, the grandchildren must establish their need for provision from the deceased’s estate based on factors such as:
- financial circumstances
- the size of the estate
- their relationship with the deceased.
- Consideration of Other Beneficiaries: The court will consider the claims of all potential beneficiaries. It will also determine if there is adequate provision for the proper maintenance, education, or advancement in life of the grandchild.
- Time Limit: Within 12 months of the deceased’s death, unless the court grants an extension of time.
Strategies for Protecting Estate Your Estate from Future Dependency Claims
Seek Professional Advice
Protecting your estate from potential dependency claims by grandchildren requires a multifaceted approach. Given the complexity of estate law and its variations across states, consulting experienced estate planning lawyers such as ours is vital to protecting your estate from future claims.
Have a Clear and Detailed Will Drafting
The foundation of protecting your estate lies in a well-drafted will:
- Explicit statements: Clearly state your intentions regarding each potential beneficiary, including grandchildren. If you’re excluding someone, explain why.
- Detailed asset allocation: Provide a clear breakdown of how your assets should be distributed.
- Use of a “no-contest” clause: While not enforceable in all jurisdictions, this clause can discourage frivolous claims.
- Regular updates: Review and update your will regularly, especially after significant life events or changes in family dynamics.
Consider using Trusts
Trusts can be powerful tools in estate planning, offering both flexibility and protection:
- Discretionary trusts allow trustees to determine how and when to distribute assets, potentially reducing the grounds for a dependency claim.
- Testamentary trusts are created upon your death, and can provide ongoing support to beneficiaries while maintaining control over asset distribution.
- Special purpose trusts can be set up for specific purposes, such as education or healthcare, potentially satisfying moral obligations without creating dependency.
Our team of estate planning lawyers may guide you in determining which trust is best for you if you are considering this option.
Maintain Clear Records
Thorough documentation can be crucial in defending against future claims:
- Financial records: Keep detailed records of any financial support provided to grandchildren.
- Communication records: Document discussions about estate planning with family members.
- Reasons for decisions: Record your reasoning behind estate planning decisions, especially if you’re treating beneficiaries unequally.
Review and Updates your Will
- Estate planning is not a one-time event. Review your estate plan annually or after major life events like births, deaths, marriages, or divorces in the family.
Address Potential Dependency During Your Lifetime
Take steps to reduce the likelihood of dependency claims:
- Encourage financial independence: Support grandchildren in developing skills and careers that lead to financial independence.
- Set clear expectations: Communicate clearly about any support you provide and its limitations.
- Gradual reduction of support: If you’ve been providing significant support, consider gradually reducing it over time.
Family Agreements
Consider formalising family arrangements:
- Financial agreements: Document any financial support provided to grandchildren, clearly stating the terms and duration.
- Family provision agreements: In some jurisdictions, you can create legally binding agreements that limit future claims.
Mediation and Communication
- Open communication about your estate plans during family meetings can prevent misunderstandings and potential disputes. If conflicts arise, consult a lawyer before they escalate to legal claims.
Need more information? Consult our empathic team
The dynamics of modern families are changing, including the roles grandparents have on their grandchildren’s lives. Navigating the intricacies of the law to protect your estate can be daunting at first but we are here to help you. Our team of experts will guide you in exploring strategies that are beyond the coverage of this article.
While it’s natural to want to support your grandchildren, ensuring that your wishes are respected is equally important. Consult one of our lawyers to preserve your legacy and provide for your family in the way you intend.
