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Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:


CALL: (03) 8561 3318

It is impossible to guarantee that your Will, no matter how cleverly drafted, will not be challenged in the future. Nevertheless, there are steps that you can take to limit a successful challenge.

Family provision claims

The most common type of challenge against a Will is known as a ‘family provision’ claim. These claims are also called a ‘testator’s family maintenance claim’ or a ‘Part IV claim’. This is where a person believes that they should have been provided for in a Will, and they make a claim for further provision from the estate.

There are a number of strategies that can be used to help prevent or reduce a successful family provision claim against your Will. These include:

  • reducing the amount of assets that form part of your estate on your death,
  • providing a written statement explaining why you have made less or no provision for the particular person, and
  • providing the potential claimant with a gift in your Will.

Reducing the assets that form part of your estate on your death

A family provision claim (in Victoria) can only be made against assets in your estate on your death. If you take steps to reduce the amount of assets that will form part of your estate, then the risk of a successful family provision claim may be reduced or eliminated. Some possible strategies include:

  • Moving assets from your sole name into joint names with your intended beneficiary: Assets held jointly with another person will bypass your estate on your death and will automatically become the sole property of the surviving owner.
  • Transferring assets to your intended beneficiary or beneficiaries outright prior to your death: As these assets will not be owned by you on your death, they will not form part of your estate.
  • Making a binding death benefit nomination (BDBN) for assets held in your superannuation fund: On your death, the assets in the superannuation fund will be paid directly to your intended beneficiaries in accordance with the BDBN. Provided the BDBN is valid and not made to your estate, the distribution cannot be challenged. If your superannuation fund is an SMSF, it is also important to put in place a binding plan to effectively pass control of the SMSF.
  • Moving assets into a family trust: On your death, the assets in the trust will not form part of your estate. The assets will instead be distributed at the discretion of the trustee and in accordance with the rules of the trust. If you set up a family trust, it is also important to put in place a binding plan to effectively pass control of the trust.

It is essential that you receive appropriate legal and financial advice before taking any steps to restructure or transfer your assets. This is because an asset restructure or transfer may trigger any or all of the following:

  • A stamp duty liability (if the restructure/transfer involves real estate),
  • A capital gains tax liability, or the loss of a capital gains tax exemption for an asset,
  • An assessment by Centrelink to reduce your pension, if you are a pensioner or intend to become a pensioner in the near future, and/or
  • The loss of control of your asset or assets (if transferred to another person).

Transfers of assets to other persons before you die can be challenged if it is found that the transfer was procured by undue influence or unconscionable conduct. An experienced solicitor can advise you on how to limit or prevent such a challenge.

Taking steps to divest your estate of assets may have no effect if your assets are in a jurisdiction (such as New South Wales) which allows assets to be ‘clawed back’ into your estate after your death.

Providing a statement for your reasons

If a family provision claim is made, the Court must take into account any reasons given by the Will Maker to explain why they have made less or no provision for the claimant. It is therefore good practice to draft and sign a separate statement, preferably in the form of a statutory declaration or affidavit, which explains your reasons for making less provision for a potential claimant. Such a statement will not necessarily prevent a successful claim, however it will be taken into account by the Court and may result in the claim being reduced or denied. To have the best legal effect, the statement should address the relevant criteria under the legislation.

Making a gift in your Will to reduce the likelihood of a family provision claim

It is a common misconception that if you leave a gift in your Will to a potential claimant that they will be prevented from making a family provision claim. This is not correct. A Court may increase a gift in a Will to a claimant if the gift is deemed to be inadequate for their proper maintenance and support.

Nevertheless, making a gift to a potential claimant in your Will may reduce the likelihood of a successful challenge if the gift is sufficient.

Other challenges against your Will

Other common challenges against a Will include claims that the Will Maker:

  • lacked the mental capacity to make and understand their Will, or
  • lacked knowledge and approval of the contents of their Will, or
  • was unduly influenced by a beneficiary to make their Will.

An experienced solicitor will take steps to limit such a challenge when the Will Maker provides their instructions and signs their Will. Such steps may include:

  • Arranging a doctor’s assessment and report to confirm the Will Maker’s mental capacity (particularly if the Will Maker is elderly),
  • Ensuring that beneficiaries are not present when the Will Maker provides instructions to the solicitor and signs their Will, and
  • Arranging a professional interpreter to be present when instructions are provided, if the Will Maker is not proficient in English.

How can Sharrock Pitman Legal assist?

A competent solicitor should be able to make suggestions based on your individual circumstances as to how you can minimise the likelihood of a challenge. Contact our Accredited Specialist Wills & Estates team on 1300 205 506 or fill in the contact form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

,

.

Binay Prasad

For further information contact

Binay Prasad

Binay is a Senior Associate of Sharrock Pitman Legal.

He is an Accredited Specialist in Wills and Estates law, having been accredited by the Law Institute of Victoria. He is part of our Wills and Estates group and deals with Wills and Estates planning and Probate. For further information, contact Binay on his direct line (03) 8561 3329.

More on

Wills & Estate Planning

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

  • Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
  • There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
  • There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.
  • You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
  • It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE: 
(03) 8561 3318

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For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.