Unfortunately, in the wake of a loved one’s passing, the time for mourning is shared with the complicated process of finalising their estate. This process can cause tensions to arise between family members, especially children, in relation to shares of the inheritance.
As a parent, it is important to have a Will in place to ensure your wishes are met when you pass away. If you do not have a Will to protect your assets, your estate may be at risk of becoming the centre of a lengthy conflict between your children. Fortunately, there are a number of steps that can be taken to prevent a Will dispute between siblings.
Can siblings challenge their parent’s Will?
Yes. If a sibling feels they have not been appropriately provided for, they are allowed to challenge their parent’s Will by lodging an application with the Supreme Court of NSW. This process is called a Family Provision Claim. Any eligible person can lodge a Family Provision Claim to formally contest their share of the inheritance and request that the Court grant them a part, or greater portion, of the estate.
The Supreme Court recently revealed in their Provisional Statistics that 968 Family Provision Claims were filed in the 2023 calendar year. This 11% increase in claims from 2021 demonstrates the increased demand of family members for a share, or greater share, of a deceased person’s estate.
To accept a claim and make an order on a Will, the Court must consider the following factors:
- The relationship between the applicant and the deceased
- Any obligations owed between the deceased and the applicant
- The financial position of the applicant
- The value of the estate
- Other aspects the Court may deem relevant
There are a number of strategies a parent can use to prevent the lodgment of a Family Provision Claim.
Fair distribution of the estate
Whilst it may seem logical to split your estate equally amongst your children, parents may choose to split their estate unequally. For example, a parent can give a child who requires expensive healthcare a larger share of the estate to assist with medical costs.
As long as all of the assets are clearly outlined in the Will, a parent can allocate their estate however they choose. To avoid a dispute among family members, it is important that the distribution of the estate is fair rather than equal and that all assets are properly accounted for. An unexplained inequality in inheritance can be a source of anger or resentment between siblings.
Open communication
If your estate is going to be unequally distributed, an effective way to mitigate conflict is to communicate your wishes openly to your children before your passing. Expectation management can help avoid sibling disputes as it gives children insight into the reasoning behind your estate distribution. Openly communicating inheritance decisions made in a Will is crucial to avoiding confusion and distress upon the estate’s distribution.
Keep an updated Will
To avoid a dispute erupting over the contents of a Will, you should keep your Will as up-to-date as possible. A Will that is not current may not account for new circumstances that affect a parent’s estate before they die. An out-of-date Will would leave an executor with outstanding assets and no clear direction as to where they should be distributed. This has the potential to raise conflict between siblings as to who is entitled to the inheritance of outstanding assets.
Neutral third-party executor
Appointing a trusted third-party executor will prevent sibling disputes over the management and inheritance of an estate. Rather than appointing your children as both co-executors and beneficiaries, a third-party executor eliminates the chance for dispute as they do not directly benefit from the Will. This ensures the executor remains impartial when managing and distributing the estate according to the deceased’s wishes. A third-party executor can be a trusted friend, associate or a solicitor.
Alternative dispute resolution
Following the death of a parent, mediation is an effective way for siblings to resolve a dispute without having to involve the Court. Mediation involves the structured negotiation of the terms of the Will using a neutral third-party in order to reach a mutual agreement on inheritance shares. The Supreme Court will often refer parties in Will disputes to alternative dispute resolution as these means are more efficient and cost-effective.
The Supreme Court’s Provisional Statistics record that in 2023, of the 968 Family Provision Claim’s filed in the Court, only 5.6% were judicially determined. This means that the majority of claims were resolved outside of Court through alternative dispute resolution means such as mediation.
Contact Us
If you believe you have been inappropriately provided for in a Will and would like to file a Family Provision Claim, we recommend seeking professional advice. To discuss your Will dispute or estate planning matter with a lawyer experienced in this field, please contact Etheringtons Solicitors in North Sydney on (02) 9963 9800 or via our online contact form.