Ways to help prevent claims on your estate
Written and accurate as at: Jan 13, 2025 Current Stats & Facts
Estate planning is a delicate business, and despite your best efforts there’s always a chance things might take a turn for the messy after you’re gone. If one of your loved ones feels especially slighted, they might even decide to file a family provision claim.
These can be drawn out, expensive, and — in the worst case scenarios — corrosive to family harmony. While there’s no guaranteed way to keep all your beneficiaries happy, there are things you can do to help reduce the chances someone will contest the terms of your Will.
Make sure anyone who might contest the Will receives adequate provision
Family provision claims are typically made when someone feels they haven’t received a sufficient share or they’ve been left out of the Will altogether. So one way to reduce the risk of things going down that road is to make sure anyone eligible to challenge the Will is given a reasonable amount.
This doesn’t necessarily mean you have to dole out equal shares to everyone — rather, you should be able to show that potential beneficiaries were considered and there was some effort to provide adequate maintenance and support.
Of course, what counts as ‘adequate’ is relative, but so long as the amount distributed isn’t zero then it might be successful in fending off future claims. Think about leaving behind a supplementary statement explaining your reasoning so there’s no uncertainty about your decisions.
Deal with assets while alive where it makes sense to do so
Many people opt to give away their assets, or at least some of them, during their lifetimes rather than when they pass away. Not only does this give you a chance to see your loved ones enjoy their inheritance, it also depletes the size of your estate. In practical terms, this means fewer assets are up for grabs if someone successfully contests your Will.
But this move is by no means a rock-solid defence against future claims: for example, if you live in NSW there are laws that allow for assets that were distributed before you died to be clawed back, and in general a family member might argue that you were coerced or lacked the mental capacity when a gift was made.
You’ll also need to be mindful of the tax consequences of transferring assets to your loved ones, as well as the impact on any Centrelink benefits you receive.
Hold assets jointly
When it comes to property, there are two types of ownership arrangements: joint tenancy and tenancy in common. Joint tenants possess something called a ‘right of survivorship,’ which means that when one owner passes away, their share of the property automatically passes to the surviving owner.
Under tenancy in common, however, the deceased’s share of the property becomes part of their estate, potentially leaving it vulnerable to a claim by another family member. While most property owning couples are listed as joint tenants, it’s worth getting hold of your title deed to confirm.
Don’t forget about non-estate assets
It pays to remember that your super isn’t considered an estate asset, meaning that your Will doesn’t automatically determine what happens to your super death benefit when you pass away.
The exception here is if you nominate your legal personal representative as your beneficiary via your fund. This allows your super to flow to your estate so it can then be distributed in accordance with your Will.
If you want your death benefit to bypass your estate and go straight to a beneficiary or beneficiaries, you’ll have to make a binding death benefit nomination via your super fund. Just keep in mind that super death benefits can generally only be paid out to dependents (such as a spouse or children), so make sure you haven’t nominated someone your fund might consider invalid.
How you choose to distribute your assets can be stressful, and depending on family dynamics and the size and complexity of your estate, you might find that family cohesion hangs in the balance. For advice tailored to your unique circumstances, it’s generally a good idea to speak to an estate planning lawyer.
