How does bankruptcy affect contesting a will?
Published 24 Feb 2016
Author: Garbis Kolokossian
One of the most important aspects of a contesting wills case is a person’s financial situation. Whether they’re the testator or a potential beneficiary, any case before the court will likely take into account a person’s current financial situation and future needs.
These include a range of different indicators of financial health, and can encompass everything from annual salary to property portfolios and superannuation. While in some cases the financial needs of someone who has been left out of a will can be clear cut, financial issues such as bankruptcy can add further complications to these procedures.
Whether this concerns a beneficiary seeking further provision or someone who is recently deceased, bankruptcy can change the way a case is resolved.
Who gets priority over a deceased estate that is insolvent?
In cases where a person dies while bankrupt, their estate is used to settle the debts the person still owes. This may mean that potential beneficiaries are excluded from the provision of an estate.
While this may prompt people to contest a will based on the fact they were not adequately provided for, the deceased’s creditors take priority.
What does an executor do for a deceased estate?
Although the estate of a deceased person will be used to pay off their respective creditors first, this process does not happen automatically. In these instances, an executor will still have to fulfil their role as normal.
The executor must apply for a grant of probate to ensure the assets are released correctly and available for distribution. However, before creditors can be repaid, first all funeral, testamentary and administrative expenses must be taken care of.
Will a bankrupt plaintiff always succeed when contesting a will?
When someone is contesting a will because they were excluded or were not adequately provided for, their current and future financial requirements will be some of the most important conditions the courts inspect.
While bankruptcy often indicates that an individual is in dire financial straits and may give them a better chance of succeeding, it’s not a recipe for guaranteed success. Depending on how long someone has been declared bankrupt for, and whether they are back to receiving a stable income, their request may be denied.
The lawyers at Gerard Malouf and Partners operate on a no win no fee basis. Contact them today to discuss your case.