A recent judgement out of the Supreme Court of South Australia sends a timely reminder to all Will Makers, that trying to successfully leave someone out of your Will is still a very difficult and tricky proposition.
For many years now a myth has been perpetuated in many circles relating to the misconception that leaving someone a ‘token’ amount in your Will is a sound tactic for preventing them from mounting an inheritance claim against your estate. Perhaps the notion originated from an assumption that the mere fact that you have provided for someone in your Will (no matter how nominally), makes it more difficult for them to successfully challenge it and be awarded a greater share of your estate. This is simply not accurate.
Take for example an estate of approximately $500,000. If this was gifted to one of only two children then it seems likely the second child may commence an inheritance claim in reaction to receiving nothing under the original Will. Invariably, it is highly likely that they will succeed in this inheritance claim. If, however, in the original Will the second child was provided a nominal gift of $100,000, with the first child receiving the remaining $400,000, the second child is still likely to commence a claim, attempting to convince the Supreme Court that they deserve a share beyond that which was already allocated to them in the Will.
So you see, a nominal or ‘token’ gift just isn’t going to cut it.
Let’s get back to the recent case. The claimants were three of the six children of the deceased widower. When the deceased and his wife immigrated to Australia from the UK, three children stayed behind as young adults (they were gainfully employed). The deceased and his wife emigrated with their 3 younger children who, under the Will, inherited the whole of the estate. A few important points to consider:
– The deceased emigrated in 1973 and thereafter sustained a cordial relationship with the children left behind.
– The Will was written in 2007 some 34 years after the deceased emigrated from the UK and, of importance, the size of the estate was modest just a little over $300,000 in total.
– The Judge still awarded the claimants a sum of $47,500 each.
The next chapter to be written in this case is that of who pays the legal costs. Under normal circumstances the estate pays everyone’s legal costs. This further diminishes the value of the estate thus reducing the inheritance received by those chosen by the deceased.
The ruling highlights some of the difficulties apparent when preventing an inheritance claim. There are some strategies that can reduce the likelihood of such a claim arising. This may involve using binding death benefit nominations concerning Superannuation interests and transferring ownership of assets in certain circumstances.
It is imperative you seek advice from a solicitor experienced in drafting Wills concerning your wishes to leave someone out of your Will. A solicitor is best equipped to provide you with appropriate advice related to what strategies may work and in what circumstances the risks of an inheritance claim are high. For advice on all matters involving Wills and Estate feel free to contact Greg Welden, Jason Coluccio or the team at Welden & Coluccio Lawyers.