Case reveals how bankruptcy may affect a contesting wills claim
Published 21 Jan 2016
Contesting wills claims can ensure all beneficiaries receive the amount they are entitled to. While many people would like to believe that an estate will be able to make adequate provision for their needs, this isn’t always the case.
Although the concept of a notional estate, unique to NSW succession law, seeks to ensure that an estate can be added to in the event that a beneficiary cannot be provided for, this is not applicable in every contesting wills case.
A recent dispute before the NSW Supreme Court revealed the unique circumstances which can leave a plaintiff without further provision – even in the event they have been bankrupt in the past.
What happened in the case?
This example concerned a contesting wills claim based on the fact that one of the beneficiaries – the deceased’s son – was bankrupt at the time of the testatrix’s death.
Originally, the deceased’s estate was split proportionately between the plaintiff and his sister. However, the plaintiff claimed he was entitled to a higher proportion of the estate in comparison to his sister, mainly due to his past, present and future financial concerns.
One of the most pressing in this case is the fact that the plaintiff was declared bankrupt in 2008, and was in this state when the testatrix passed away in the same year. However, the plaintiff was discharged from bankruptcy in 2014.
The plaintiff’s contesting wills claim stems from the fact that his sister is in a much better financial state due to her partner’s high salary and status as a property owner. In comparison, the plaintiff earns much less and doesn’t have a comparable asset base.
On further investigation of the man’s financial needs, the courts found that, despite being bankrupt for six years, he is now in a more stable financial state than he originally indicated. The man was denied further provision from the deceased’s estate, with the Judge deciding that the 50/50 split between the two parties was adequate for both siblings.
The Judge stated that the plaintiff’s annual salary of more than $80,000, combined with the fact that he has almost a decade of his working life left and more than $200,000 in superannuation, means further provision would be unnecessary.
To find out more about how your financial condition affects your ability to contest a will, contact the team at Gerard Malouf