Are wills effective which treat children equally?

Charlwood v Charlwood [2017] NSWSC 1033 (10 August 2017)

The Plaintiff, an adult child of the deceased, made a claim for a family provision order because he wanted more than an equal share of his parent’s will. There was no dispute as to the Plaintiff’s eligibility as a child of the deceased. The Defendant was also an adult child of the deceased and a beneficiary named in the Will. It was a reasonably sized estate in value principally comprising real property. The Plaintiff and Defendant shared equally the estate under terms of the Will. There was a competing financial claim advanced by the Defendant because he had a wife and two children to support.

The question was whether a family provision order should be made, and if so, the nature and quantum of the provision to be made. The Court had to consider “whether adequate provision for the proper maintenance, education or advancement in life of the Plaintiff has not been made provision in Will”.

The Plaintiff’s  request to vary the will competes with the general principle that “The court does not simply ride roughshod over the testator’s intentions… The court’s power to make an award is limited. The purpose of the discretionary power under Section 59(1) of the Family Provisions Act is to redress circumstances where ‘adequate provision’ has not been made for the ‘proper maintenance, education or advancement in life’ of the claimant. The adjectives ‘adequate’ and ‘proper’ are words of circumspection.”

The Court considered in fairly minute detail the personal and  financial circumstances of the Plaintiff and the deceased.

Ultimately the Court did not “carve up” the estate more favourably towards the Plaintiff, esseentially leaving the terms of the will in place.  It was determined as follows.

The way in which adequate and proper provision ought to be made for the Plaintiff is by way of a loan from the Defendant’s share of the estate, secured by a Mortgage that is registered on any property that the Plaintiff does purchase, which property should be purchased in his sole name.

The amount the subject of the loan should be no more than $150,000 and it should only be borrowed out of the estate (or effectively out of the Defendant’s share of the estate), if the Plaintiff does purchase a property for a purchase price of more than the amount he ultimately receives from his share of the proceeds of sale of the Austral property.

By way of example, only, if the purchase price of any property to be purchased is $550,000, and if the Plaintiff’s entitlement under the Will is $400,000, then the amount borrowed should be limited to $150,000.

Of course, if the Plaintiff determines that he does not wish to borrow any amount, but move away from the Austral area, and purchase accommodation for the amount that he ultimately receives pursuant to the terms of the deceased’s Will, or otherwise does not wish to have a mortgage of any kind registered in the name of the Defendant secured on any property that he might own, he will not be obliged to borrow any amount.

If the Plaintiff chooses to obtain a reverse mortgage, a matter suggested, but about the availability of which there was no evidence, he can do so without the need to look to the Defendant’s share of the estate to provide a loan.

Get advice on your situation from Gerber Legal at gerberlegal@bigpond.com