How to make your will challenge-proof
Challenging wills has become much more widespread, as property prices have soared and the family home has come to be worth a fortune. But maybe you don’t want a certain relative to get a slice of your hard-earned assets. Perhaps you’d like to make sure that the estate you leave goes to the person or people you think deserve it most, and that the will is as immune from being challenged as possible.
There are things you can do when drawing up a will to make it as legally challenge-proof as possible.
A good first step is to own assets jointly because such assets pass automatically to the surviving joint owner of the property. This of course assumes that you want that person to inherit your joint assets. If not, then you had better change your joint ownership arrangements as soon as possible.
Keep in mind that if there isn’t enough in the estate to make proper provision for a claimant, the court may use “notional provisions” of the Succession Act 2006 (NSW) to claw these jointly held assets back into the deceased’s estate.
You can also put your assets into a testamentary trust for the benefit of someone you want to inherit, although this can also be challenged if it’s not done properly with expert legal advice.
Making a detailed statement about your decisions to accompany your will
It’s a good idea to make a detailed statement outlining your reasons for making your will the way you have.
If you explain why you decided to exclude someone from your will, the court will place a high degree of importance on your wishes in the consideration of a challenge. You’ll need to stress how you considered any obligations to those who might feel the will is unfair. This can be done in writing or by filming a statement on video.
An example of the effectiveness of this approach in challenge-proofing a will is provided by the case McIntyre v O’Regan  NSWSC 1985, in which the adult children of a deceased testatrix were unsuccessful in challenging their mother’s will, partly because she had made a video clearly explaining the basis of her decisions in making her will in a particular way. (Please see our earlier article Court ruling on will shows importance of expert advice.)
Money held in superannuation and life insurance policies
It’s important not to forget money you have in superannuation.
Money held in super is transferred directly to the person you nominate as your beneficiary on your death. In fact, the use of super and life insurance policies is often fundamental in getting your desired post-death outcome – but be careful who you nominate as your beneficiary, because you can’t just appoint anyone.
This will largely depend on your individual circumstances, but is especially worthwhile if you have a complicated blended family with children and young people you want to provide for properly after your death.
De facto of 30 years makes successful claim on estate
A recent, and typical, case I had was where I acted for a woman whose partner of 30 years died unexpectedly. He had a child from a previous relationship and, before he met his future de facto partner, made a will which left everything to his child from the previous relationship.
All assets were held in the late husband’s name, as had been the case for the previous 30 years. They had some wealth and travelled the world frequently. They were in their late 50s and 60s and lived a nice life.
When her partner died, my client had literally nothing in her name. The child who was the beneficiary of the estate quickly asked my client to leave the house and tried to get the accounts transferred into his name.
A claim was brought by my client and she received in the realm of 50% of the estate, meaning she had enough to buy a house outright and enough funds in the bank to cover exigencies of life and as a financial buffer. This is a case which exemplifies why the legislation allowing a claim to be brought against a testator’s wishes is necessary.
Stepchild brings claim against estate on dubious grounds
On the opposite end of the scale, where the legislation allowed a claim that arguably should not have been made, was where I acted for an executor (brother of his deceased sister) who was forced to defend a claim from a stepchild of the deceased.
Section 57(1)(e) of the Succession Act 2006 (NSW) allows any person to bring a claim against a deceased’s will if they can prove they were a “member of the household” of the deceased and were either “wholly or partly dependent” upon the deceased.
The claim of the stepchild was based upon the fact that he lived in the deceased’s household for a period of about three months in the 1970s (and, as such, was partly dependent upon the deceased for financial and emotional support).
Had the matter progressed to court, it is likely that the stepchild would have lost. However, it was agreed – prior to hearing – to give the stepchild a fairly small amount of “go away” money so that the legal costs did not mount up, and to avoid ongoing emotional stress. This can be one of the frustrating realities for an executor when a claim is made against an estate, especially if the estate is small.
Testator’s intentions stymied by non-binding superannuation nomination
Another example of a testator’s intentions being scuppered is where the deceased left a super nomination form appointing his children as beneficiaries of the super policy. However, because the nomination was a “non-binding” nomination (meaning the super fund was not bound to pay it to the children but could exercise its discretion), it passed to the spouse of the deceased (who was not the parent of the children nominees). This was against the deceased’s intentions, given that he’d provided for his spouse in a different way. I have seen this happen regularly and, generally speaking, people are not aware of it. Unfortunately, the consequences often create results which are anathema to the deceased’s intentions.
It is a quirk of the law that a person should execute a “binding” nomination (meaning the super fund is bound to pay it to the nominated beneficiary or beneficiaries) in addition to a will. It is important to get expert advice though, because many people do not execute such binding nominations properly and/or are not aware of the strict categories of persons who can be nominated as a super beneficiary.