When grandchildren may and may not be able to make a claim on your Estate

By virtue of the Succession Act 2006 (NSW), grandchildren who lived with you at any time (regardless whether in your house) and were dependent on you at any time, are eligible to make an application for a Family Provision Order: section 57(1)(e)(ii).

Given that it is usual to leave your Estate to your children, on the assumption that it will go to your grandchildren from there, if you have a grandchild that you have taken in, it would be prudent to update your will and provide a specific bequest where the grandchild is primarily dependent on you. Though prevailing community standards are such that there is no responsibility for grandparents to provide for grandchildren in their wills, family provision claims can be ridiculously costly on Estates, and particularly where there is tension or conflict amongst family members.

 

Circumstances when grandchildren are likely to be found eligible

  1. Where the deceased clearly expressed and intention to leave a property or other provision from their Estate to a grandchild or grandchildren, if proved on the balance of probabilities by credible witnesses;
  2. Where the deceased provided accommodation and acted as a primary carer;
  3. Where the deceased provided an ongoing and substantial level of responsibility to the grandchild;
  4. Where there is special closeness beyond the natural affection of grandparents & grandchildren;
  5. Where a level of conflict or tension between family members is demonstrated by credible witnesses that supports the grandchild’s version of events.

Case example: Ng v Morgan [2014]

  • The deceased had discussed her intentions of leaving a property to her grandchildren who had resided there for some years with close friends and relatives
  • The deceased had been more involved than her daughter in providing day to day care for her grandchildren for some time and had assumed the role of their primary carer
  • The deceased died unexpectedly and had not updated her will for some 40 years. She had seen a solicitor in relation to drafting a new will but had not executed a new will prior to her death
  • There had been an incident of conflict between the deceased and her daughter who were estranged for the last few years of the deceased’s life, despite her attempts to reconcile with her daughter.
  • The grandchildren received the property they resided in unencumbered with the mortgage to be paid out from the Estate.

 

Circumstances when grandchildren are not likely to be found eligible

  1. Where provision was made for payment of education prior to adulthood;
  2. Where the grandchildren are mature adults and have not made efforts to further their own life;
  3. Where it would be improper given circumstances and facts of a case;
  4. Where a grandchild is unable to demonstrate factors that warrant them the status of being a natural testamentary object, that is, circumstance existing that mean their relationship with the deceased is equivalent to that of a spouse or child.

Case example: Wilcox & Wilcox; and subsequent appeal Chapple & Wilcox

  • The Estate primarily consisted of farming and pastoral properties and associated business enterprises, which were left to the deceased’s child – the claimant’s mother.
  • The adult grandson was initially awarded $107,000 with $40,000 to be paid to him from the Estate each year for 7 years.
  • On appeal the court found it was not appropriate to award provision to a mature adult who had been given a better start in life and had an unmeritorious sense of entitlement.
  • Further, it was inappropriate as the nature of business and its profits will always be subject to natural events such as drought.
  • The grandson received no provision.

 

If a claimant is found to be eligible, they will then be required to demonstrate factors that give them the status of a person who would generally be regarded as a natural object of testamentary recognition by a deceased. It is not an easy threshold to cross. Some grandchildren have attempted to use the regular receipt of birthday and Christmas presents or money to meet this requirement, but fear not – the court has held that is insufficient. What must be shown is something greater, such as the provision of accommodation, or a significant continuing responsibility to the grandchild.

The Court continues to make statements (see for example Bowditch v NSW Trustee & Guardian [2012]) upholding the general rule that grandparents do not have a responsibility to make provision for a grandchild, with that obligation resting firmly on the parent of the grandchild.

If you have concerns about providing for a grandchild in your will Paul Sant and his Estate team will guide you through the process.

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