Challenging a Will in NSW - Stephen Wawn & Associates Sydney Legal Experts Will Disputes

Who can challenge a will?

Pursuant to Section 57(1) of the Act a person wishing to challenge a will must be deemed an ‘eligible person’ by the Court to apply for an Order that provision be made for a person’s maintenance, education or advancement in life from the deceased’s estate. Eligible persons may include;

The husband or wife of the deceased at the time of their death.
A person with whom the deceased person was living in a de facto relationship at the time of the death.
A child of the deceased person, or if the deceased person was living in a de facto relationship at the time of death, a child of that relationship.
A former husband or wife of the deceased person.
A person who was, at any particular time, wholly or partly dependant on the deceased person, and who was, at any time, a member of a household of which the deceased was a member.
A grandchild of the deceased who was at any particular time, wholly or partly dependant on the deceased.
A former de-facto spouse not expressly listed may be eligible if ever wholly or partly dependent on the deceased and ever a member of a household that included the deceased.
A Step-child, parent or sibling, not expressly listed may be eligible if they can establish that at any stage they were wholly or partly dependent on the deceased and they were at any stage a member of the deceased’s household or had a close personal relationship with the deceased at the time of death.

In Ball v Newey the term ‘dependent’ was said to be used in the ordinary sense of the word, meaning the condition of depending on something or someone for what is needed. In Petrohilos v Hunter the court said:

The word ‘dependent’ is an ordinary English word, and whether a person is or has been wholly or partly dependent upon another is a question of fact. No doubt one of the commonest forms of dependency is a financial one, in the sense that the dependence flows from the fact that accommodation, food, clothing and other necessities or amenities of life are provided by the person who owns or is otherwise entitled to the accommodation and pays for the other things.

In McKenzie v Baddeley dependency was described in terms of “financial, economic or material dependency, not a mere emotional dependency”.

Further, the statutory requirements of a ‘close personal relationship’ are found under section 57(f) of the Act and were applied in Dridi v Fillmore.

In that case Macready M considered the elements that must be present in order for two people to be considered to be in a close personal relationship as defined under section 5 of the Property (Relationships) Act. He stated:

I have earlier referred to aspects of what the Act describes as a “close personal relationship”. It has to be between two adult persons who are “living together”. Given that they may be members of the same family, such as a grandparent and grandchild and the different definition for a “de facto relationship” concepts relating to a “couple” are not relevant. Instead the definition calls for two different links. The first is that the parties are “living together”. The second is that “one or each of whom provides the other with domestic support and personal care.

Grounds to challenge a will in NSW

To challenge a will in NSW the person contesting the will must establish they have an ‘interest’ in the deceased estate. This means having either an entitlement in a previous will or an entitlement on intestacy, and having an entitlement to the estate by way of NSW legislation. If a person cannot establish an ‘interest’ in the deceased estate they are not entitled to challenge the will. The most common reasons for challenging a will are alleged fraud, lack of capacity on the behalf of the testator, undue influence, forgery or lack of the will maker having knowledge and approval of what is contained in their will.

A claim can only be made in NSW if there is either real estate or other property owned by the deceased situated in NSW and/or the deceased was domiciled (living permanently) in NSW at the date of his or her death and owned personal property anywhere.

There are several instances in which a will can be challenged:

Where the testator did not have testamentary capacity to understand what they were doing to make a will at the time it was signed (e.g. suffering from an insane delusion).
When someone who should have been provided for has been left out of the will.
When people who are dependent upon the deceased (either partially or fully) such as spouses, de factos, children (including adopted children), ex spouses, grandchildren and/or dependants have been excluded or they believe they have not been left a fair share of the testator’s estate.
Where the testator’s intentions are unclear.
Where the testator did not make the will freely or where the testator’s decisions were influenced by others.
Where the will is grossly unfair.
Where the will has been forged or there was fraud.
Where parts of the will were changed after the testator has signed it.

Lack of testamentary capacity

Testamentary capacity is a legal concept that determines whether or not a person has the ability to make a binding will. Along with the formal requirements provided under section 6 of the Act, for a will to be binding the person making the will must have testamentary capacity. Where there is doubt as to capacity, a report should be obtained from a medical practitioner to determine whether the testator/testatrix had testamentary capacity at the time they made their will.

In Levy Estate – Application of Samuels

Palmer J found the testatrix lacked testamentary capacity pursuant to an application made under s 18 of the Act. The testatrix, Mrs Levy, was a 93 year old woman who had been diagnosed with dementia and was suffering from a severe cognitive impairment. A psychiatrist and a clinical neuro-psychologist had examined her and had come to the conclusion that, although she appeared at first impression to be in possession of her faculties, a closer examination revealed a severe cognitive impairment. Both came to the conclusion that, at the time she made her will, she lacked testamentary capacity. His Honor stated that: “the requirement that Mrs Levy lacked testamentary capacity was amply satisfied by the medical evidence.”

Therefore a will is invalid if the testator/testatrix is found to be lacking capacity at the time the will is executed. The test for capacity was established in Banks v Goodfellow where it was said:

Any degree of unsoundness of mind, however slight, and however unconnected with the testamentary disposition, must be held fatal to the capacity of the testator.

In brief, four things must be satisfied at the time the testator/testatrix executes the will to make the will valid. He or she must:

Understand he or she is executing a will and what that means;
Remember and understand generally the nature and extent of his or her property;
Comprehend and appreciate any moral obligation/s he or she might have towards friends and family; and
Be of sound mind, in that he or she is not affected by any disorder of mind to the extent that the will produced is one that he or she would not have made if of sound mind.

However, it is important to note that, it is possible for a person who, for example, has Alzheimer’s disease or dementia to execute a valid will during lucid intervals provided they satisfy the above four part test at the time they make their will. The onus is initially on the person trying to prove the will, by showing:

The will was duly executed in accordance with the Act ;and
There are no suspicious circumstances.

Once this is proven, the onus then switches to the party seeking to disprove the will by showing the testator/testatrix lacked the requisite intention to create a will when executing it.

In situations where the testator lacked testamentary capacity at the time they made their will, the court is granted the power to make a statutory will under section 18(1) of the Act which states:

(1) The Court may, on application by any person, make an order authorising:

a will to be made or altered, in specific terms approved by the Court, on behalf of a person who lacks testamentary capacity, or
a will or part of a will to be revoked on behalf of a person who lacks testamentary capacity.

(2) An order under this section may authorise:

the making or alteration of a will that deals with the whole or part of the property of the person who lacks testamentary capacity, or
the alteration of part only of the will of the person.

(3) The Court is not to make an order under this section unless the person in respect of whom the application is made is alive when the order is made.

(4) The Court may make an order under this section on behalf of a person who is a minor and who lacks testamentary capacity

An application of this kind must be made within 12 months of the date of death of the testator.

However, the time limit can be extended in situations where the Court considers it necessary, and where the final distribution of the estate has not been made.

A minor’s testamentary capacity

The law surrounding minor’s testamentary capacity is found under Section 5 of the Act. Under this section, a will made by a minor is not valid unless one of the exemptions applies. Under section 5(1) a minor may make a will in contemplation of marriage, only if that marriage eventuates. Under Section 16, if a minor marries under the age of 18, the minor may make a will during that marriage only with leave from the Court. The Court must be satisfied that the minor understands the effect of the will, that the will reflects the minor’s intentions and it is a reasonable order to be made.

Undue influence

If the person who assisted the deceased in drawing up the will stands to gain from doing so, then that person may be required to prove to the court that there was no pressure, threat, force, trickery or fear involved at any time during the will making process. However, there are forms of flattery and persuasion that the court will not deem unlawful. In these circumstances the court will only allow the will to be successfully challenged on the grounds of undue influence where it is satisfied that the deceased’s mind and thought process were coerced to the point of making the resulting will being a contradiction of what would have been the deceased’s true intentions.

Undue Influence is difficult to prove unless there were reliable witnesses present who can vouch for what happened. To challenge a will on the ground of undue influence one must be able to prove the fact with supporting details and evidence. Any undue influence must be more than just coercion. It is only when the deceased person is coerced into doing something that they do not want to do that it can be deemed undue influence. The influence needs to be such that it overbore the free will of the deceased person.

The case of Wingrove v Wingrove is an example of a will being challenged on the ground of undue influence. In this case the Judge stated:

To be undue influence in the eyes of the law there must be – to sum it up in a word – coercion. It must not be a case in which a person has been induced by means such as I have suggested to you to come to a conclusion that he or she make a will in a particular person’s favour, because if the testator has only been persuaded or induced by considerations which you may condemn, really and truly to intend to give his property to another, though you may disapprove of the act, yet it is strictly legitimate in the sense of its being legal. It is only when the will of the person who becomes a testator is coerced in to doing that which he or she does not desire to do that it is undue influence.

Fraud and forgery

A will can be challenged if established that the will was procured by fraud or forgery. Fraud occurs when the testator has been tricked into signing the will. Examples of fraud include the making of deliberately false statements or suppressing material facts. Fraud can also occur in situations whereby the testator is presented with a document that they believe is a Power of Attorney or Deed, when in actual fact it is the will, and they sign it.

Forgery differs from fraud because in cases of forgery the deceased is generally not involved in the creation of the will at all. In cases that involve forgery, the will itself can be forged, but so can the signature of the deceased. For example, the will might actually be valid, but the signature on it has been forged, which invalidates the will.

The person challenging a will on the basis of fraud or forgery bears the burden to prove it with supporting details and evidence. Challenging a will on the basis of forgery is difficult to prove and will typically involve the testimony of an expert in handwriting who is able to detect and prove discrepancies between the signatures. In such cases it must be proved that the testator expressed their wishes elsewhere, by finding an earlier will, a draft, or reliable witnesses.

Gross unfairness – Left out of Will

In situation where the will is considered to be grossly unfair, there may be a ground to challenge the will. The relevant factors that will be considered are whether the person who has been excluded from the will was dependant on the deceased or whether they should have been included in the will. The Court will not accept a claim for mere unfairness; gross unfairness is required to challenge the will. The court will look at the factors specific to the case to determine if the claim constitutes gross unfairness.

Proprietary estoppel

Proprietary estoppel is another ground in which to challenge the validity of a will. The case of Delaforce v Simpson-Cook illustrates the importance of taking care in estate planning and making verbal promises as to what will be given in a will. This case concerned proprietary estoppel by encouragement which refers to the situation when an owner of property encourages another to alter their position in expectation of receiving an interest in that property. Where the second party has changed his or her position to his or her detriment, the law of equity may compel all or some of the expectation or promise.

Delaforce v Simpson-Cook concerned a promise made by the husband and relied upon by the wife in the consent orders for a Family Law property settlement between the wife and the husband. Part of the settlement was to be a payment of $50,000.00 from the husband to the wife and that the wife would allow the husband to live in the property until his death upon which he would leave the property to her in his will. The wife then agreed to forgo the $50,000.00 if the husband spent that money on a granny flat.

The will in question was executed in 1998 and appointed the wife as executrix and left the residue of the estate to her. However, the husband executed a new will in 2007, revoking all prior wills and leaving the residue of his estate to a cousin. The wife was not mentioned in this will and upon the death of her former husband the wife commenced proceedings in the New South Wales Supreme Court. The wife obtained an order for transfer of the property based on proprietary estoppel by encouragement and an order for transfer of the estate based on the Family Provision Act (now repealed). The New South Wales Court of Appeal dismissed the appeal based on proprietary estoppel by encouragement and overturned the decision based upon the Family Provision Act.

The court noted that it is well established that a promise in a will may not be revoked if this promise is more than a simple statement of gift as in this case. This is because the law of equity will enforce a contract not to revoke a will or leave property out of a will by imposing a trust over the estate. In this situation, the consent orders from the property settlement amounted to such a contract and the detriment was not simply the payment of $50,000.00 but also the abandoning of the wife’s opportunity to seek an order in the Family Court in relation to the property settlement. As such it would not be appropriate for the court to simply award damages of $50,000.00 to the plaintiff.

Survivorship provision

Under section 35 of the Act, a beneficiary to a will must survive the testator by a period of 30 days in order to receive the gift left to them by the testator in their will. However, in situations where the testator does not want this provision to apply, they can have this requirement negatived in their will.

Effect of joint tenancy and notional estates

Further it is important to be aware of the effect of joint tenancy when challenging a will in NSW. Holding a residential property as a joint tenant means that in situations where one joint tenant dies, the property will not form part of the deceased’s estate but will pass automatically to the surviving joint tenant/s by way of survivorship. The right of survivorship takes precedence over what is said in the deceased will. However, in NSW, if a person held an interest in a property as a joint tenant, and prior to their death failed to sever that joint tenancy, the person’s interest in that property can be treated by the Court in certain circumstances as part of their ‘notional estate.’

This means that if a family provision claim is made against the deceased person’s estate, their jointly held property may not automatically be protected, and may form part of the estate for division amongst the beneficiaries making the claim. Where the court makes such an order, the surviving joint tenant/s would not obtain the benefit of survivorship.

The case of Karayannis v Smith concerned a claim under the then Family Provision Act 1982 (NSW) (now Succession Act 2006 (NSW)) by two children from the deceased’s first marriage. The deceased’s only assets were held in a property which she owned as a joint tenant with her third husband. In this case, Macready M stated that an order under the Act could only be made in the plaintiff’s favor if there was a notional estate available to be designated as such notional estate. With specific reference to s 27 of the Family Provision Act 1982 (NSW), Macready M held that an appropriate provision for each of the plaintiff’s was a sum of $40,000.00. He referred to D’Albora v D’Albora and made orders for a notional estate, noting that the defendant’s financial position was irrelevant when designating the notional estate. He stated:

So far as the substantial justice and merits are concerned the defendant proceeded with the purchase of a new home and the purchase of the business in the full knowledge of the likelihood of the commencement of the present proceedings and their actual existence. The proceedings were commenced before the expiry of the relevant period. In these circumstances the actions of the defendant, although probably appropriate in the circumstances do not call for the Court to refrain from making an order in respect of notional estate.

How to challenge a will

There are several procedures to challenge a will in NSW, these include:

Making a family provision application under the Succession Act 2006 (NSW). This legislation gives the court some discretion to allow eligible applicants access to some of the deceased’s estate where the testator did not make adequate provision for the proper maintenance, education and advancement in life of those persons.
Lodging a caveat against the testator’s estate. However this is only possible where a grant of probate has not yet been made.
In situations where probate has already been granted, it may be possible to make an application to the court that probate be revoked.

Circumstances the court may make a family provision order

A Family Provision order may be made when the court is satisfied of the following:

The applicant is an eligible person.
At the time when the court is considering the application, adequate provision for the proper maintenance, education or advancement in life of the applicant had not been made by the deceased person.
There are sufficient funds in the estate or notional estate to provide for the applicant after considering the needs of beneficiaries named in the will.

Evidence the court takes into account

Pursuant to Section 60(2) of the Act the Court takes the following evidence into consideration when determining whether the person is an ‘eligible person’ and to make a family provision order:

any family or other relationship between the applicant and the deceased (including the nature and the duration of the relationship);
any obligation or responsibilities the deceased had to the applicant or beneficiary;
the nature and extent of the deceased’s estate and liabilities;
the financial resources (including earning capacity) and financial needs of the applicant (both present and future), any other applicant or beneficiary;
the financial circumstances of another person the applicant is cohabiting with;
any physical, intellectual or mental disability of the applicant or any other applicant or beneficiary in existence at the time of the hearing;
the applicant’s age at the time of the hearing;
any contribution (financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate or the welfare of the deceased or family of the deceased for which adequate consideration was not received by the applicant;
any provision made for the applicant by the deceased during the deceased’s lifetime or made from the estate;
any evidence of testamentary intentions of the deceased, including evidence of statements made by the deceased;
whether the applicant was being maintained by the deceased before the deceased’s death and (if the court considers it relevant) the extent to which and basis on which the deceased did so;
whether any other person is liable to support the applicant;
the character and conduct of the applicant before and after the deceased’s date of death;
the conduct of any other person before and after the deceased’s date of death;
any relevant Aboriginal or Torres Strait Islander Customary Law;
any other matter the Court considers relevant, including matters in existence at the time the application is being considered.

Changing a will once it has been executed

The testator is free to change their will, and is encouraged to do so when their circumstances change. Where the change the testator would like to make is only a minor change, they can simply make a codicil, which is effectively an authorised amendment to the will. Like the will, the codicil needs to be in writing, signed by the testator and witnessed by two people who also need to sign the will. Where the change is major, it is best for the testator to make a new will.

Consequences of getting married or divorced

Generally, getting married cancels the terms of any will the testator had previously drawn up.

However, under s 13 of the Act, getting divorced does not automatically revoke a will. But there are exceptions. For example if the testator divorces, it cancels any gift they made to their former spouse under their will and cancels their appointment as trustee, executor or guardian under their will, except as trustee for property left to any children. A testator should always make a new will if they marry, divorce, or if they have been separated for a long time.

Time limits for challenging a will

When challenging a will an application must be made within 12 months from the date of the death of the testator.

If the date of death is unknown, the Court is to determine a reasonable time or date.

In some circumstances where the court believes a person has ‘sufficient cause’ for a late application to a family provision claim, the Court may grant an extension of time. However, any extension of time is made at the Court’s discretion, and only in circumstances where the application provided ‘sufficient explanation’ or ‘sufficient justification or excuse’ to the Court as to why they have made their claim late.

Pursuant to Durham v Durham an extension may only be granted, if sufficient cause is shown for the application not having been made within the prescribed period. Assuming that condition is satisfied, the Court has discretion to grant an extension “having regard to all the circumstances.”

Matters that the Court should take into account include whether the beneficiaries under the will would be unacceptably prejudiced if time were extended and whether there has been unconscionable conduct by any of the parties in connection with the delay.

Wills and Estates