Shakespeare v Flynn: When will the Court change a Will to allow family provision claims?

We're not referring to the internal conflict Gillian Flynn may be going through while she rewrites Hamlet as part of the Hogarth Shakespeare project. No, here we're looking at the New South Wales Supreme Court's judgment earlier this year (19th May 2014) on the conflict between upholding the wishes of the deceased and the rights of the family left behind under the Succession Act 2006 (NSW).

The case (Shakespeare v Flynn [2014] NSWSC 605) concerned the estate of original Sherbet guitarist Clive Richard Shakespeare. His daughters, Coco and Tori, sought family provision orders under the Act, which were resisted by his second wife, Elizabeth, and a friend, both of whom had been appointed executors of his estate. Elizabeth was left most under his Will, including his music royalties and a property worth approximately $800,000, which would go to his daughters should they survive her. The Will made no further provision for Coco and Tori, stating that, in the circumstances, what was left them was adequate, reasonable and fair.

The Court handily summarised the guiding principles when determining family provision from deceased estates under the 2006 Act. First, it was emphasised that although the purpose of the Act is to ensure adequate provision is made for family members, there is no statutory entitlement to receive a certain portion of a deceased's estate. Nor does the Act restrict the freedom to make a Will:

'It is only if the statutory conditions are satisfied, that the court is empowered, under the Act, to alter the deceased's disposition of his, or her, estate, to produce a result that is consistent with the purpose of the Act. Even then, the court's power to do so is discretionary.'

Secondly, the Court set down the test laid down in section 59 of the Act. This requires the Court to:

• Be satisfied that each applicant is an eligible person within the meaning of section 57(1), which is determined according to a multi-category system in New South Wales;
• Determine, in accordance with section 59(1)(c), whether adequate provision for the maintenance, education or advancement in life has been made, by taking into consideration the Will and the intestacy laws.

How Does the Court Determine Whether a Will Makes Adequate Provision?

Looking to previous case law, it was noted that the wording of the Act grants the Court a wide discretion when deciding whether to make a family provision order. Further, the Act says nothing on the proper approach the Court should take when determining whether the circumstances do, or do not, constitute inadequate provision for the proper maintenance, education and advancement in life of the applicant. In the absence of any express criteria, it was held that what is required is for the Court to conduct a balancing act, taking into account all the factors relevant to the specific circumstances:

'The question would appear to be answered by an evaluation that takes the court to the provision actually made in the deceased's Will, or on intestacy, or both, on the one hand, and to the requirement for maintenance, education and advancement in life of the applicant on the other.'

But how much maintenance, education and advancement in life is appropriate? When considering these issues, the court will look at the financial position of the person making the family provision claim, their needs, the size and nature of the deceased's estate, the totality of the relationship between the applicant and the deceased, as well as the circumstances and needs of other actual or potential beneficiaries under the Will. Essentially, this means the court must examine the whole of the circumstances:

'The nature and content of what is adequate provision for the proper maintenance, education and advancement in life of an applicant, is not fixed or static. Rather, it is a flexible concept, the measure of which should be adapted to conform with what is considered to be right and proper according to contemporary accepted community standards.'

If the Court is satisfied that the applicants are eligible person and that adequate provision has not been made for them, then it must decide whether it should make an order interfering with the terms of the Will. So, it remains open to the court to refuse to change a Will, even if a family member claims they have not been adequately provided for by the deceased.

Although no two cases will ever be the same, there are also some general principles the Court will keep in mind:

• The court's role is not to distribute the estate according to fairness or to correct any sense of wrong, nor can it change a Will according to its own notions of fairness;
• The deceased's Will cannot not be totally reformed, but must only be altered to the extent that the deceased failed to make adequate provision for their family;
• Although the Act subjects the freedom to make a Will to a new qualification (i.e. to make adequate provision), it does not create new rights of succession or inheritance.

Applying these, amongst other, principles the Court found that Coco and Tori were inadequately provided for in their father's Will: 'The fact that each is currently able to survive with an income that is derived from a pension and that each has a small amount of capital available, is of little significance when one considers the obligation and responsibility owed by the deceased to each'.

To that end, a family provision order was made, granting Coco 20 per cent, and Toni 18 per cent, of the net proceeds of sale of the property originally left to Elizabeth.

The Court also made an order adjusting the interests of those affected by the change to the Will. This resulted in a grandchild of the deceased, Ruby, being granted 10 per cent of the proceeds of the sale of the property, and Elizabeth being granted the balance of the proceeds of the sale, amounting to 52 per cent.

Although the wide discretion granted to the Court presents a potential minefield for those wanting to make sure their wishes are carried out when they die, it is possible to mitigate the risks. As this case shows, it is vitally important to have a Will drafted with care that attempts to make adequate provision, rather than paying lip service to it. This can be done by preparing a Will that takes into account all potential family applicants, including past as well as present dependents and partners.

Want to Prevent Your Will Being Interfered With or Make a Family Provision Claim?

At Szabo & Associates Solicitors, whether you want to limit the chances of your Will being interfered with, or want to make a family provision claim because you feel you haven't be adequately provided for by a loved one, we can help. We have vast experience helping people make, contest and update Wills in New South Wales. To get in touch, please call us on (02) 9281-5088 or click to book a consultation. Alternatively, please complete our online enquiry form which is located on the right-hand side of this page. We look forward to hearing from you.