Have the last word: how to avoid disputes over your will
The division of estate assets after someone's passing may lead to family conflict but potential issues can be avoided with the right planning, writes Marie Brownell, National Manager, Estate Planning, Equity Trustees.
Wills are often a bone of contention in families and many of us have heard stories about squabbles over estate assets that have broken families apart.
Some estimates suggest that currently over half of wills are contested in courts, typically by family members fighting over how parents’ assets should be divided between siblings*.
When you are making a will, it is important to be aware of some of the common disputes that can arise and engage a specialist in estate planning to help you draft a will that is appropriate to your circumstances.
Here are some of the major pitfalls you should be aware of.
Family members contesting their cut
Family provision claims are one of the most common types of will dispute. This type of claim allows eligible people who have been left without adequate provision for proper maintenance, education and what is called ‘advancement in life’ to make an application to receive a portion of a deceased's estate.
Depending on which state you live in, eligible claimants may include your current or former spouse, a de facto partner, children, stepchildren, grandchildren and even your parents and siblings.
The chances of your will being disputed increases if you have a complicated family situation, such as a blended family, adult children still living at home or other family members you are financially supporting.
We are also seeing an increase in disputes over superannuation death benefit claims, such as the recent case of Ashleigh Petrie, whose fiance and de facto partner of a few months successfully claimed her superannuation death benefit despite her nominating her mother as the sole beneficiary. In this instance it was successfully argued that the nomination was invalid.
Where there is no valid binding nomination in place, the trustee of the super fund will determine how these funds will be paid. Certain dependants, such as spouses, children and other financial dependents can make a claim for the benefit to be paid to them. The trustee will then ultimately decide who receives the death benefit after taking into considerations everyone’s claim.
To avoid these types of disputes, we recommend discussing your family tree and any dependents with a specialist lawyer. If you have specific and valid reasons for leaving a family member out of your will, such as a prolonged estrangement, your lawyer can help you to document reasons and evidence which have led you to make this decision. Alternatively, they may suggest you make some provision for this family member in your will to help minimise the chance of a future dispute arising. Your lawyer will also discuss your options around the distribution of your superannuation death benefits and ways to reduce the risk of claims.
Question marks over capacity
Another common cause of disputes is the decision-making capacity of the deceased at the time the will was made.
To make a valid will, the person making the will needs to understand what a will is, what assets they possess and comprehend and appreciate the people in their life who they should benefit and who can claim on their estate.
However, some people develop dementia or cognitive disabilities, which can make establishing the validity of a will problematic.
It is therefore important to ensure your will is up-to-date and accurately reflects your wishes while you still have capacity. A lawyer will know what evidence is required to support the terms of the will and in most cases will seek a medical assessment. In some states in Australia, where a person does not have the required capacity to make a will, it may be possible to approach the court and seek the assistance of the court in making or updating a will.
Undue influence or lack of knowledge
All too often, we receive enquiries from family members who are suspicious that a vulnerable or elderly family member has been influenced or even bullied into changing their will.
A person can only make a valid will if it is made by them freely and voluntarily. If coercion or undue influence has occurred, the will may be set aside by the court.
In other cases, a court may determine that there was a lack of knowledge and approval of the contents of the will. If a court finds there were suspicious circumstances regarding the making of the will or there is evidence of fraud occurring, this will invalidate the will.
To protect yourself and your assets from potential elder abuse or fraud, ideally you should meet with your lawyer in person without any of your beneficiaries in attendance. Seek help if you feel that a family member or carer may be coercing you into changing your will and never create or agree to sign a DIY will kit.
Summary
While there is no such thing as a water-tight will, being aware of these common issues and seeking the right advice can certainly help to increase the chances that your wishes are carried out when you are gone. It is also important to regularly revisit your will and keep it up-to-date to reflect your changing circumstances.
More information about Equity Trustees’ wills and estate planning services is available on our website.
This article was originally published in Starts at 60 in September 2021
* University of Queensland Research