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THE FAMILY PROVISIONS ACT 1982
THE FAMILY PROVISIONS ACT 1982
By: Dominic Wilson, Managing Partner, Craddock Murray Neumann
- The Family Provision Act 1982 (FPA) came into operation on 1 September
1983 and applies to the estates of people dying on or after that date.
- The FPA was set up to correct unjust or unfair treatment of certain
relations or dependants who had been left without proper provision being made
for them in a will. People specified in the FPA as eligible persons can apply
to the court for provision out of the estate of a deceased person, whether or
not there was a will, and whether or not they were mentioned in a will.
Testamentary Freedom
- Assuming a person has testamentary capacity, that person has freedom to
give away his or her property by will in such a manner as he or she thinks
appropriate. The fact that other people may strongly disagree with the terms
of the will or have an expectation which is not fulfilled by the will is not
relevant subject to the Act.
- The Act intrudes upon testamentary freedom. The court construes the Act so
that it is not a license to rewrite the will, but is the statutory means by
which for eligible persons the court may, in its discretion, provide provision
where the court is of the view that proper provision has not been made for the
particular eligible person making the claim.
- An application under the FPA must be made within 18 months of the death of
the deceased. The executor or administrator of the deceased's estate can apply
to the court to have this period of time shortened, while an applicant can
apply to have it extended.
- The Property (Relationships) Legislation Amendment Act 1999, which
commenced on 28 June 1999, has far reaching implications for wills and estate
matters. The Act amended the De Facto Relationships Act 1984 (renamed the
Property (Relationships) Act 1984) to extend its provisions so that they apply
to parties to relationships of a more widely defined class, including same sex
relationships. A number of Acts have been affected by the amendments,
including the FPA.
- Those now eligible to apply under the FPA are:
- the husband or wife of the deceased person at the time of
the deceased person's death,
- a person with whom the deceased person was living in a
domestic relationship at the time of death,
- a child of the deceased person or, if the deceased person
was living in a domestic relationship at the time of death, a child of that
relationship,
- a former wife or husband of the deceased person,
- a person who was, at any particular time, wholly or
partly dependent upon the deceased person, and who was, at any time, a
member of a household of which the deceased was a member,
- a grandchild of the deceased person who was, at any
particular time, wholly or partly dependent upon the deceased.
- A domestic relationship is defined as:
- a de facto relationship, or
- a close personal relationship (other than marriage or a
de facto relationship, and not necessarily a sexual relationship) between
two adult persons, whether or not related by family, who are living
together, one or each of whom provides the other with domestic support and
personal care (but excluding paid domestic and personal carers including
those working for government or charitable organisations).
- A de facto relationship is defined as a relationship between two adult
persons:
- who live together as a couple, and
- who are not married to one another or related by family.
- In determining whether two people are in a de facto relationship, the
court will take all the circumstances of the relationship into account,
including matters such as:
- the duration of the relationship (generally at least two
years),
- the nature and extent of common residence,
- whether or not a sexual relationship exists,
- the degree of financial dependence or interdependence,
and any arrangements for financial support, between the parties,
- the ownership, use and acquisition of property,
- the degree of mutual commitment to a shared life,
- the care and support of children,
- the performance of household duties,
- the reputation and public aspects of the relationship.
- Under the FPA, provisions are made for a person's maintenance, education
or advancement in life. The amount comes from the estate or notional estate of
the deceased (see below) and takes community standards into account.
- Other factors that can influence whether provisions are made for an
applicant under the FPA include:
- the character and conduct of the applicant before and
after the death of the deceased,
- any contribution made by the eligible person towards the
deceased's property or welfare,
- any other matter that the court considers important (e.g.
the financial means and needs of the applicant).
- The court can make temporary orders that can later be confirmed, changed
or withdrawn. An eligible person can forego his or her right under the FPA if
the court approves. This could happen in a property settlement following a
divorce.
Notional Estate
- Sometimes a person disposes of their assets while they are still alive,
sometimes to prevent those assets going to certain eligible people after their
death. To overcome this, the court can made orders against the 'notional'
(i.e. disposed of) estate of the deceased. This is to enable the court to
overrule these disposals. A notional estate includes assets and property which
the deceased had owned but disposed of for less than market value (known as a
'prescribed transaction'). For the court to intervene, the prescribed
transaction must have taken place within the following time limits:
- within three years prior to the death of the deceased if
the exchange took place with the intention of denying proper provision for
an eligible person from the estate,
- within one year prior to the death of the deceased if at
that time the deceased had a moral obligation to make proper provisions for
an eligible person,
- on or after the death of the deceased.
- Generally, the costs of a successful application under the FPA are ordered
to be paid for from the deceased's estate. The court always has discretion on
who pays the costs.
- In all claims, there is a tension between the right of freedom of
testamentary disposition and the demands of the FPA. It is the role of the
Court to resolve this tension when it is called upon to determine a claim.
There can be no preconceived notion of what is adequate and proper provision.
Each case must be considered upon its own merits. That is why there is often a
warning given to read the cases with discretion – simply because no case is
ever the same as another, and also because each decision involves the exercise
of discretion.
- Much will depend upon the size of the estate. Where the estate is large a
testator may be able to meet all claims adequately, however where the estate
is small and there is insufficient to satisfy all legitimate claims all a
testator can do is to ensure that the estate is divided between the eligible
persons who have moral claims upon him in due proportion to the relative
strength of those claims.
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