An executor is the person appointed under a Will to oversee administration of the estate of a deceased person. An administrator plays a similar role however is appointed by the Court when a person dies intestate (without a Will) or the appointed executors under the Will are unable to act.
Whether acting as an executor or administrator, the legal personal representative of a deceased person will deal with third parties such as accountants, financial advisors, creditors and agents to oversee the proper distribution of the estate to the beneficiaries.
Generally, the administration of an estate runs reasonably smoothly, often with the guidance of a lawyer. However, sometimes the terms of a Will, or a proposed distribution under intestacy laws, may be challenged and the legal personal representative needs to deal with this. With obligations to the deceased and the estate, and in many cases a familial relationship with the person challenging it, this can be a daunting and complex process.
The following provides an overview of a family provision claim and sets out the position of an executor / administrator when facing such a claim.
Family provision claims
The terms of a Will or the proposed administration of an estate under the laws of intestacy may be contested under family provision laws.
There is an expectation within most communities that a person has a moral duty to provide for certain family members from their estate. An eligible person may make a claim against the estate of a deceased person if he or she believes they have been unfairly treated under the Will or the proposed distribution is unfair. In Queensland, under the Succession Act 1981 an eligible person includes:
- a spouse of the deceased;
- a de facto partner (whether same or opposite sex) who had been in a continuous relationship with the deceased for at least two years at the time of death;
- a former spouse who was maintained by the deceased and not remarried, or is the parent of a minor child of the deceased and dependent at the date of death;
- a child, stepchild or adopted child of the deceased;
- a parent who was dependent on the deceased or the parent of a surviving child under the age of 18 years of the deceased, or other person under the age of 18 years who was wholly or substantially dependent on the deceased.
If a family provision claim is successful, the Court can order an adjustment to the terms of the Will to satisfy the claim.
What are the obligations of the executor?
An executor primarily has a duty to preserve the assets of the estate, uphold the terms of the Will, obtain probate if necessary, and distribute the assets accordingly. A family provision claim will be contrary to the terms of a Will and, when facing such a claim, the executor must consider the overall interests of the estate.
An informed decision must be made as to whether to admit and attempt to settle the claim or to defend it.
Some claims may be morally justified by deserving claimants who may not have been adequately provided for, and the Will of the testator may not reflect what he or she really intended had all of the circumstances been known.
Generally, the needier a claimant is, the more likely he or she is to succeed in a claim. Each case is assessed on its own merits – the factors that will be taken into consideration include, but are not limited to:
- the degree to which the deceased had a moral obligation to provide for the claimant in light of the proposed distribution;
- evidence regarding the deceased’s intentions with respect to the claimant;
- the nature and length of the relationship between the claimant and the deceased;
- the deceased’s obligations to the claimant, any other person and the actual beneficiaries;
- the size of the estate;
- the needs, financial resources and earning capacity of the claimant compared with those of any other eligible persons or the actual beneficiaries;
- the liability of a third party to maintain the claimant; and
- the character and conduct of the claimant.
Assessing these factors will assist in determining whether the claim is likely to succeed so an informed decision can be made on whether to negotiate or defend the claim.
Depleting estate assets through expensive litigation should be avoided wherever possible. An executor who wishes to defend a claim in Court should be aware that if it is successful, there is a risk that a claimant’s costs will need to be met from the estate.
Family provision claims can be settled at any stage prior to a Court hearing and most settle through negotiation between the parties.
If the matter proceeds to Court, mediation is generally ordered which can assist in resolving the dispute without further legal costs, or at least narrowing the contested issues.
Family provision claims are complex and executors or administrators must weigh up the advantages and disadvantages of defending or attempting to settle a claim. This can be achieved with the assistance of an experienced lawyer.
If you are an executor or administrator, you should seek legal advice immediately if you think that a claim may be brought against the estate.
If you or someone you know wants more information or needs help or advice, please contact us on 07 4927 9477 or email [email protected].