How to mitigate the risk of grandchildren claiming against an estate

Home How to mitigate the risk of grandchildren claiming against an estate

Exploring the nexus between grandchildren and dependence in estate claims

In 2022, the NSW Court of Appeal dismissed the case of Chisak v Presot [2022] NSWCA 100 – but in determining the case, the Court cleared the way for grandchildren to 0

make a family provision claim.

Could your estate be put at risk from a similar claim?

The facts of the case

Ms Chisak sought to claim against her deceased grandmother’s estate in two ways:

  • To challenge the validity of her late grandmother’s 2017 Will, alleging the deceased lacked testamentary capacity, which would reinstate the earlier 2009 Will in which Ms Chisak would have received a substantial portion of the estate.
  • Alternatively, Ms Chisak sought a family provision order under s57(1)(e) of the Succession Act 2006 (NSW)(the Act) as a grandchild of the deceased who was “at any particular time… partly dependent on the deceased”.

While the Court of Appeal dismissed the case, the reasoning applied on whether Ms Chisak was eligible to bring a family provision claim remains significant.

What is a family provision order?

A family provision claim can be made against an estate under s57 of the Act. A person, who believes they have not received adequate provision from the testator, can instigate the claim, with the result that the Court can amend the Will to:

  • Increase the person’s existing entitlement from the estate
  • Name the person as a beneficiary, and determine their entitlement

While eligibility to bring a family provision claim is limited within the Act, the case of Chisak v Presot has expanded the criteria.

Usually, these claims are successfully used by a surviving spouse, de facto partner or child. 

Ms Chisak had not lived with her grandmother for a prolonged period or spent significant time with her during her life.

However, the Court of Appeal found Ms Chisak did have partial dependence on her grandmother, making her eligible to bring a claim. 

What does ‘partially’ dependant mean?

In examining her eligibility, the Court concluded that dependency must be more than minimal. 

Dependence for a few weeks or a month or two, on three or four occasions, could be sufficient to prove eligibility.

Ms Chisak had stayed with her grandmother on three or four occasions between 2000 and 2003, for between three weeks to a month at a time. The Court found this level of dependence was sufficient for her to launch a claim against the estate.

In Ms Chisak’s case, the Court upheld the validity of her grandmother’s 2017 Will, which provided approximately $175,000 to Ms Chisak. The Court found this allocation to be adequate for the granddaughter.

How to mitigate risks to your estate

Following this decision, we have stepped up our advice to clients who may face a similar risk to their estate. 

If a client indicates that their grandchild would visit them often, slept over a handful of times or otherwise provided for them – it may mean that grandchild could be classified as an ‘eligible’ person to make a claim on the client’s estate. 

We understand the priority for our clients is making the Will they want as robust as possible, so that their wishes are indeed followed. Rather than being rewritten after their death.

There are two main ways to mitigate this risk:

  • Making a statement in a Will with details as to the relationship between the grandparent and the grandchild – referencing the factors set out in s60 of the Act. This could include the grandchild’s age, character, capacity, contribution, relationships and other liabilities.
  • Leaving an amount of money to that grandchild in the Will. The court has a harder time to redistribute wealth where there is already a gift specified, rather than no gift. If it’s specified, the Court will assess whether the amount is enough. This is a better course of action than the Court assessing the amount to which the claimant should be entitled. 

By using these strategies, we can ensure that the Will made for our clients has a stronger position against any future claims by ‘partially dependent’ grandchildren.

Our estate planning process includes a detailed discovery phase, where we seek to deeply understand your situation and wishes so that we can find the solutions that best fit your goals, whilst minimising risk.

Book a consult today to find out more.

Leave a Reply

Your email address will not be published. Required fields are marked *