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Home | Blog | Eligible persons and Notional Estate Orders in Family Provision Claims

Individuals who have been left little to no provisions in a will can bring forth a family provision claim if they are considered an eligible person.

Who is an eligible person?

Pursuant to section 57 of the Succession Act 2006 (NSW), there are six categories of eligible persons, each limited to a family member or to an individual with a particular relationship to the deceased, as listed below:

  1. A person who was the wife or husband of the deceased when the deceased died;
  2. A person whom the deceased was living in a de facto relationship at the time of the deceased death;
  3. A child of the deceased;
  4. A former wife and/or former husband of the deceased;
  5. A person:

(a) who was, at any particular time, wholly or partly dependent on the deceased; and

(b) who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member;

  1. A person who was living with the deceased in a close personal relationship at the time of death.

Family Provision Order

If the Supreme Court of New South Wales is satisfied that the deceased did not make adequate provision in their will for an eligible person for their “proper maintenance, education or advancement in life”, the Succession Act 2006 (NSW) gives the NSW Supreme Court the discretion to grant a family provision order in a deceased’s estate.

A family provision order, under section 59(1) of the Succession Act 2006 (NSW) is usually satisfied from the assets in the estate. It is commonly misunderstood by testators that assets which are not held directly under their name at their death and assets that were previously transferred out of their estate may not necessarily be out of reach of an eligible person who brings a family provision claim against the estate.

Notional Estate Order

If there are insufficient assets in the deceased’s estate to satisfy a family provision order, the Supreme Court has the discretion to make a notional estate order. A notional estate order can designate particular property that was once held by the deceased and is now particular property being held outside of the deceased’s estate, or assets that do not directly form part of the deceased estate at the time of his or her death, to satisfy an eligible person’s claim on an estate.

Assets that could form part of a Notional Estate Order

The Supreme Court has the power to make a notional estate order in respect of an estate that is affected by property transactions made before or after the deceased death, and in particular property transfers made with the intention of diminishing the size of a deceased’s estate. The following are types of assets that could form part of a deceased’s notional estate:

  1. The deceased’s share of any property held as a joint tenant before the deceased’s death.
  2. Superannuation fund death benefits;
  3. Company interests;
  4. Estate assets that have been distributed;
  5. Family Trust interests;
  6. Life Insurance death benefits;
  7. Inheritance contracts;
  8. Donatio Mortis Causa, which are gifts and/or transfer of assets made without full valuable consideration by the deceased in contemplation of death;
  9. Life estate assets; and

Time limit of assets transferred out of deceased estate

Under Section 80(2) of the Succession Act 2006 (NSW), the Court has the jurisdiction to designate particular property as notional estate property that was transferred one year before the death of the deceased who had a moral obligation to make provisions in his/her will for an eligible person, which was substantially greater than the moral obligation of the deceased person to enter into the asset transfer.

The Supreme Court also has the ability to designate particular property to satisfy a notional estate order that was transferred within three years of the death of the deceased person for the purpose of intentionally, wholly or partly, of denying or limiting provision being made out of the estate for an eligible person.

In addition, the Supreme Court can also designate particular property to satisfy a notional estate order being property in respect of transactions which took effect on or after the deceased person’s date of death.

How to reduce the risk of a Family Provision Claim?

If an eligible person can demonstrate s/he needs provision from your estate, there is a chance that s/he could be successful in bringing a family provision claim.

Simply diminishing the size of your estate within 3 years before death will not safeguard your estate from a potential family provision claim.

Although you may be strongly against making any provision from your estate for a potential eligible person, making adequate and proper provision for the eligible person may deter an eligible person from bringing a claim against your estate.

A statutory declaration can also be made to identify the reason an eligible person was excluded completely from your estate or given limited provision compared to other beneficiaries. The statutory declaration is your voice during a family provision claim and it helps equip your executor with the reasons behind the provision you made in your will.

To mitigate the risk of a successful family provision claim made by an eligible person on your estate, it is important that you are properly advised by a wills and estate lawyer during your estate planning process.

Having a well thought out estate plan can assist in preserving your estate from any family provision claims that are costly and generally diminish the size of your estate for your loved ones.

Get in touch with us

If you have been left out of a will or are unsure as to whether you are entitled to anything from a person’s estate, contact one of our experienced Wills and Estates lawyers today on 13 43 63 for a no obligation discussion of your options. Alternatively, you can chat to us online via LiveChat.

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