Can a daughter make a family provision claim against the estate of her long-dead father, to be paid for out of the estate of her recently deceased stepmother? Which case won?
Father dies leaving small legacy to daughters and balance of estate to second wife
The deceased and his first wife had two children.
The deceased’s first wife died in 1985, and in 1997 he married his second wife, S.
There were no children of this marriage, which ended when the deceased died in July 2003.
The deceased’s estate was estimated at almost $2,000,000, with the main asset being the matrimonial home.
The deceased left each of his daughters a legacy of $25,000 in his will. He left the residue of his estate to his second wife, S.
The will named S’s brother as executor.
At the time of his death, neither of the deceased’s children sought to challenge the will.
Second wife sells matrimonial home
In March 2011, S sold the matrimonial home and purchased a home unit in its place.
Second wife dies leaving small legacy to stepdaughters and balance of estate to siblings
S died in November 2016, 13 years after the deceased’s death.
At the time of her death, S’s estate was valued at about $1.9 million, and included the home unit she had purchased with the proceeds from the sale of the matrimonial home.
S’s will named her brother as executor and left a legacy of $100,000 to each of her two stepdaughters. She left the balance of her estate to her siblings and their children.
Executor sells home unit that replaced matrimonial home
Acting in his capacity as executor of S’s estate, her brother sold the home unit and put the sale proceeds into an investment account.
Daughter belatedly applies for family provision order out of her father’s estate
The deceased’s younger daughter felt that the legacy of $100,000 from her stepmother was insufficient, given that much of the estate was acquired by reason of her stepmother’s marriage to her father.
However, the daughter was not eligible under the relevant legislation to make a claim against her stepmother’s estate.
She therefore applied to the Supreme Court for a family provision order against her father’s estate. This was notwithstanding that he had died some 14 years earlier and his estate had been fully distributed shortly after his death.
For the daughter’s claim to succeed, she required the court to grant her an extension of time for the making of the application.
She also required that the court designate property in her stepmother’s estate as the notional estate of her father, so that provision could be made out of that property.
Supreme Court rules in favour of daughter and executor appeals
The Supreme Court found in favour of the daughter. The court granted the extension of time, designating $740,000 of S’s estate as the notional estate of the father, and provisioning $250,000 for the daughter out of this notional estate. This was payable in addition to the $100,000 left to the daughter in S’s will.
S’s brother, as the executor of both the father’s and S’s estates, appealed the ruling to the NSW Court of Appeal.