Dislike your children? We’re sorry!
Steven, a successful stock trader, had 3 children with his first wife, Freya. They were his only children.
While they were very young, Steven met and commenced a relationship with the love of his life, Jane. After settling relationship property matters with Freya, Steven abandoned his young family and for the next two decades, he and Jane travelled around the world.
At the height of his romance, Steven made a will. At this point, he had completely forgotten about his children as he was simply too preoccupied with his new life. Steven was not interested in establishing a relationship with them and made no attempt to contact them.
Steven’s will reflected his love for Jane- he left everything he owned to her. No thought was given to his children who were struggling their way through adulthood. They did not own a home, nor did they have any assets. Instead, each of them had heavy debt.
One night, Steven and Jane attended a glamourous party. The night was going splendidly when, all of a sudden, things took a turn for the worse. Steven suffered from a fatal heart attack. He did not make it to the hospital.
After his funeral, Jane organised a dinner in Steven’s honour. She invited Steven’s children who, by now, were all in their 20’s and had little to no contact with their father. Steven’s children were shocked to see their late father’s home. It was a magnificent villa, sitting on acres of land. Resting in the corner of the lounge was the wooden chess set the children used to play with him.
At dinner, Jane made a toast to her late partner. She thought it would be fitting to read out Steven’s will which left everything to her. Jane thanked Steven for being so generous to her, both before and after his death. Naturally, Steven’s children felt betrayed and deeply saddened that they were not included in their father’s will. The following day, they instructed a lawyer who advised them that they were able to make a claim against Steven’s estate and receive a portion of his wealth.
Claims by children against their deceased’s parents’ estate are common in New Zealand. The relevant legislation is the Family Protection Act 1955.
Section 4 of the Act allows children bring a claim on the grounds that their deceased parent owed to them a moral duty which they breached by failing to provide for their maintenance and support in their will.
The Court’s ability to made provision for Children out of the deceased’s estate is discretionary. This means that it is difficult to predict exactly how much a Court is likely to award children to “repair” a deceased parent’s breach. The starting point is to give primacy to the wishes of the deceased. Court’s do not have the power to rewrite a will. However, there are a number of factors that a Court may consider when exercising their discretion to make provision for claimants like Steven’s children. Relevant factors include:
- The size of the estate, for example, whether it is large or modest;
- The financial circumstances of the claimant/s;
- The deceased’s relationship with the claimant/s. Here, consideration is given to how close the deceased was with each claimant and the biological or familial connection between them; and
- Whether the deceased made any inter vivos contributions (gifts) to the claimant/s during his or her lifetime.
It is relevant in the above scenario that Steven’s estate is quite large. It is also relevant that he effectively neglected or abandoned his children at a young age. In such circumstances the Court operates to remedy the wrong caused to the children by the absent parent. The respective financial situations of the children will also be taken into consideration. Of course, a reasonable, fair and just testator would not have wanted his children to live a life of debt! Ultimately, however, provision is out of the deceased’s estate is likely to be made to recognise the biological relationship between father and child.
The Legal Process:
To make a claim, the party or parties need to file what is called a Notice of Proceedings and a Statement of Claim. They must also file an affidavit in support, explaining their relationship with the deceased and/or why they are commencing proceedings. These documents are then served on the executors/administrators of the estate as well as individuals who might be affected by the claim such as beneficiaries named in the deceased’s will. Upon receiving the Notice of Proceedings, the respondents have 25 workings to file a Notice of Defence to indicate that they intend to oppose the claim.
Once the respondents file a Notice of Defence, a Court will allocate a Judicial Conference. A Judicial Conference is purely procedural and opportunity for a Judge to be updated on the matter and make directions on how to proceed. Estate claims are often resolved via a Judicial Settlement Conference or private mediation. If parties cannot reach agreement then the matter can progress to a hearing, which of course, is costly and takes a considerable amount of time. In such circumstances, thought should be given to amount available for distribution out of the estate.
Timeframes are also very important with respect to such claims. Children (or persons entitled to make a claim under section 3 of the Act) who seek provision out the deceased estate must apply to the Court within 12 months of grant of probate. Once it has been indicated to the administrator that a claim is going to be made, the claimants have just 3 months to file an application under the Family Protection Act with the Court.
Factors to consider when making a will:
Although it is difficult to prevent a claim being made against a testator’s estate after their death, there are some factors that can be considered. For example, a minimum of 10% can be left to children to mark that some thought was given to them.
A testator may also consider providing for their children by way of gift during his or her lifetime. Such gifting can be mentioned in their will and serve as an explanation as to why a small portion of their estate was left to them, or why greater provision was made for others.
The moral of the story is not to forget to make some provision for your children in your will - even if you dislike them! As for all the Janes out there, get ready to share!
We have a wealth of experience in dealing with matters relating to estate claims. We can advise you on:
- Either bringing or defending claims in respect of estates;
- Bringing or defending claims under the Testamentary Promises Act;
- Making wills and structing estate planning and inter-generational wealth transfer arrangements.
If you would like assistance with the above, please feel free to get in touch.
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