When we think of family wealth protection, we often focus on ensuring that our assets are secured against external threats such as creditors, legal disputes, and unexpected tax obligations. However, one of the more complex and emotionally charged aspects of estate planning involves the potential claims from family members—particularly grandchildren—on a deceased grandparent’s estate. Understanding how these claims work, especially under the various State laws in Australia, is crucial for effective family wealth protection.
Understanding Family Provision Claims
A family provision claim allows certain eligible individuals to contest a will if they believe they have not been adequately provided for. This can significantly impact the distribution of an estate and, consequently, the financial security of the intended beneficiaries. Grandchildren, although not always the primary focus of such claims, can be eligible under specific circumstances depending on the State.
State-by-State Analysis
Each Australian State and Territory has its own rules and regulations regarding family provision claims, and these differences can influence whether a grandchild is eligible to make a claim.
New South Wales: Under the Succession Act 2006, grandchildren are eligible to make a family provision claim if they were wholly or partly dependent on the deceased at any time. The court will consider the nature and extent of the relationship between the grandchild and the grandparent, along with the financial dependency and the grandchild’s needs.
Victoria: In Victoria, the Administration and Probate Act 1958 allows grandchildren to make a claim if they were wholly or partly dependent on the deceased or believed they had a moral obligation to provide for them. The court’s decision is influenced by the grandchild’s financial situation, health, and the relationship with the deceased.
Queensland: The Succession Act 1981 provides that a grandchild can make a claim if they can demonstrate that they were financially dependent on the deceased. Queensland courts also consider the deceased’s moral duty to the grandchild and the grandchild’s financial needs and health.
Western Australia: Under the Family Provision Act 1972, a grandchild can apply if they can show dependency or were being maintained by the deceased. The court assesses the nature of the relationship and the financial dependency to determine the outcome.
South Australia: The Inheritance (Family Provision) Act 1972 allows grandchildren to claim if they were wholly or partly dependent on the deceased or were a child of a child of the deceased who has predeceased them. The court looks at the grandchild’s financial needs and the extent of their relationship with the deceased.
Tasmania: Grandchildren can make a claim under the Testator’s Family Maintenance Act 1912 if they can prove dependency on the deceased or if they were a child of a child of the deceased who has predeceased them. The court considers the relationship and dependency factors.
Australian Capital Territory: The Family Provision Act 1969 allows grandchildren to claim if they were dependent on the deceased. The court examines the dependency and the nature of the relationship to decide on the provision.
Northern Territory: The Family Provision Act allows for grandchildren to claim if they were being maintained by the deceased. The court’s decision is based on the dependency and the relationship’s nature.
Practical Steps for Protection
Given the potential for grandchildren to make claims on an estate, it’s essential to take proactive steps in your estate planning:
Clear Will Drafting: Ensure your will is drafted clearly, detailing reasons for specific distributions and exclusions. Explicitly address why certain beneficiaries are provided for more than others.
Regular Reviews: Update your will regularly to reflect changes in your family’s dynamics, financial situations, and relationships.
Detailed Documentation: Keep detailed records of financial support and the nature of relationships with potential claimants. This can help demonstrate the reasoning behind your estate distributions.
Seek Professional Advice: Work with a Board Certified SAPEPAA adviser to structure your estate using Trusts and other structures in a way that minimises the risk of successful claims, using trusts or other legal mechanisms.
Communicate Your Intentions: Where possible, discuss your estate plans with your family. Clear communication can help manage expectations and reduce the likelihood of disputes.
By understanding the nuances of family provision claims across different States and taking strategic steps, you can better protect your family wealth and ensure it is distributed according to your wishes
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