Left out of a will? There may be options.

The law in Victoria specifies that a person is free to dispose of their assets in whatever manner they desire.

However, there are circumstances where a court will interfere with this freedom if the Willmaker had an obligation to provide for someone, but has failed to do so.

A “Testator Family Maintenance” claim (“TFM claim”) is initiated by a beneficiary under a Will, or a person left out of a Will, seeking further provision be made for them. As each matter is unique it is important to seek legal advice to explore firstly, whether the Willmaker had an obligation to provide for you, and secondly, whether the Will fails to provide adequate and proper provision.

A recent Supreme Court case, Re Schlink; Keane v Corns [2020] VSC 180 (“Re Schlink”) explored the meaning of “adequate and proper” provision and provides some insight into how the courts consider TFM claims.

Facts of Re Schlink:

• The deceased died leaving an asset pool of around $650,000 - $840,000 (the exact value was in dispute), including a property, and a small share portfolio.
• The deceased gifted $50,000 to his adult daughter (aged 47), and the residue of his Estate to his domestic partner of 20 years (aged 73).
• The deceased and his partner had lived together for 20 years, and both paid expenses jointly (including the mortgage over the property).
• Both the partner and the daughter had financial and health needs.
• The daughter was a single mother of two children, who was unemployed. Her assets included a property worth $400,000, and superannuation of about $26,000. Her liabilities totalled around $111,000, consisting of a mortgage over her property, and other various loans.
• The daughter had been diagnosed with major depressive disorder, severe anxiety, panic attacks and agoraphobia. Her dependent son suffered from level 2 Autism Spectrum Disorder.
• The partner was in remission from lymphoma cancer.
• The daughter requested further provision be made for her, via either:
  • The property being sold and a lump sum being paid to her of between 30%-50% of the net sale proceeds, with the residue then going to the partner; OR
  • The partner receiving a life interest in the property for her lifetime, and upon her death, the daughter receiving the entire property.

It was acknowledged by all parties that the deceased had a moral obligation to provide for both his partner and his daughter, therefore, the relevant issue was whether the gift of $50,000 to the daughter amounted to “adequate and proper provision”.

Judgement

In relation to the daughter’s needs, it was decided that the amount of $50,000 amounted to adequate and proper provision, and was enough to discharge the deceased’s moral obligation to her. No further provision was awarded to the daughter.

The case emphasized the importance of the deceased’s intentions when making his Will. In particular, the following factors favoured the partner:

• This was a small Estate, and the partner had considerable financial and health needs.
• The main asset in the Estate was the property, and the intention of the deceased was to provide independent financial security to his partner via way of accommodation.
• The daughter’s predominant needs related to her children, however it was the children’s father’s obligation to provide for his children, and not the deceased.
• If the partner was simply given a life interest in the property rather than receiving the property outright (which was an option suggested by the daughter), this would not satisfy the daughter’s current needs, as the daughter would only receive the property after the partner’s death. By that stage, the daughter’s own children may not be dependent upon her, and it is likely she would have paid off her mortgage, therefore she would not have the same financial needs.
• The gift of $50,000 to the daughter would ease some of the daughter’s financial burdens, particularly if used to reduce her mortgage.

The aim of a TFM claim is not to receive a windfall gain, but instead to provide what is necessary for your proper maintenance and support. You must have need in order to be successful in a TFM claim, although you do not necessarily have to be destitute. The court looks at current social standards to determine what constitutes adequate provision.

The case of Re Schlink reveals some of the factors considered by a court in determining whether a person should receive additional provision. However, as each matter has entirely different circumstances, it is important to seek legal advice in relation to your particular situation.

To discuss your situation further you can call Madeleine Debono on 03 5445 1063, or book an appointment online.