6 most common reasons behind Will disputes
Will disputes often arise after a person dies and the estate assets need to be distributed to the beneficiaries. Particularly in large families or complex family dynamics, for instance half or step relatives, it is not common for disputes to arise in relation to the Will. Even if the testator’s instructions are clear problems may still arise.
1. Beneficiaries disagree on the disposal of the estate property
A dispute between the beneficiaries can often arise in relation to the estate property and whether it is best to sell it and each receive a portion of the sale proceeds or to keep it in the family so future generations can enjoy and benefit from it. The solution to this issue is that the beneficiary who wants to keep the property must then buy out the interest of the other beneficiaries who prefer to sell the property. For this purpose an expert valuation of the property should be obtained to determine a price for which the beneficiaries should be paid out. Though obtaining a valuation doesn’t sound like a difficult hurdle, it can often be the source of a dispute because valuations may be obtained which value the property slightly differently.
Occasionally a testator will prepare for a situation such as this one and will have a provision in their Will that allows one or more of the beneficiaries to claim residence of the estate property by paying out any other beneficiaries. With any luck the testator will give specific direction to the beneficiary as to how the property should be valued. For example, the provision may state that the valuation must be completed by a local agent and may give a method of calculating the valuation. Section 49 of the Wills Act 1997 (Vic) provides that if the Will gives no method of calculating the valuation then the property should be valued as at the date of the testator’s death made by a competent valuer.
2. Part IV claims in Will disputes
Testamentary freedom means that any person can make their Will as they see fit, however testators should also keep in mind that they have to make adequate provision to those they have a moral duty to provide for. Under s 90A of the Administration and Probate Act 1958 (Vic) an application can be made to the court for an order awarding an eligible person further provision from the estate. This claim is often referred to as a Part IV claim.
Section 90 of the Administration and Probate Act 1958 (Vic) defines who are eligible persons. Some examples of eligible persons include:
- A spouse or domestic partner of the deceased.
- A child of the deceased (including adoption or step-children).
- A former spouse or domestic partner of the deceased (who has not finalised Family Law proceeding).
- A registered carer of the deceased.
- A grandchild of the deceased.
- A person who was a member of the deceased’s household.
- A person who for a substantial period of time believed the deceased to be their parent and was treated as a natural child.
To establish a claim for further provision the deceased must have had a moral duty to provide for the eligible person and that the Will fails to make adequate provision for their proper maintenance and support. To determine the court will consider many factors which include the following:
- The relationship between the eligible person and the deceased
- The financial means and needs of the eligible person
- The health status of the eligible person.
A Part IV claim is a common reason behind Will disputes and can cause significant delay in distributing the estate assets to the beneficiaries.
3. Delays by executor
When a testator creates a Will an executor is appointed. An executor is responsible for seeing to it that the deceased wishes are met and organising the probate application in the Supreme Court. It is important when selecting an executor that you select someone who is efficient and organised, as it is too often that distribution of an estate is delayed by an executor who takes a significant amount of time to apply for probate. It is commonly accepted that the executor should commence the probate application within 12 months of the death of the deceased. To resolve a situation like this it is up to the beneficiaries of the estate to apply to the Supreme Court seeking an order which compels the executor to obtain a grant of probate.
If delays persist another dispute can arise which involves beneficiaries applying to the Court to remove an executor of the estate, on the grounds that their actions threaten the proper administration of the estate and negatively impact the interests of the beneficiaries. The courts have not defined precisely what circumstances will allow for the removal of an executor. They have however determined that the executor’s intention or motive is irrelevant. In cases previously presented to the court, the court have ordered the removal of an executor for reasons such as:
- The executor goes bankrupt or is convicted of a crime
- Causes significant delay or neglects their duties
- Does not adequately communicate with beneficiaries
- Causes unreasonable conflict with co-executor
4. Claims for undue influence in Will disputes
Another common Will dispute is when accusation of undue influence are made by a close relative or friend. A claim for undue influence arises when a person close to the testator unduly influences or pressures the testator to make changes, they wouldn’t otherwise make, to their Will. This may occur between siblings because of a broken family unit. For example, one son or daughter may pressure their elderly mother or father into changing their Will in a way which favours them, to the detriment of another sibling.
Claims for undue influence are notoriously difficult to prove, because clearly the testator cannot attest to their motivations for distributing their assets in such a way. Accordingly, the courts must rely on other witnesses to speak on their knowledge of the testator’s wishes and the relationship between the deceased and the person accused of applying undue influence.
If the claim for undue influence is successful then the Will in question will be deemed invalid and therefore, any previous Will can be considered or intestacy laws will determine how the estate assets are distributed.
5. Beneficiaries allege unauthorised transaction of deceased’s assets
When one family member is given financial power of attorney in the last few years of the deceased’s life or simply put in charge of the deceased’s assets, often after the deceased’s death another beneficiary may claim that there has been unauthorised transactions made by the person in charge of the deceased’s finances. If the person whom was in charge of the deceased’s finances either transferred funds out of the deceased’s bank accounts or sold property belonging to the deceased it can significantly reduce the value of the estate, thus disadvantaging the other beneficiaries of the estate. In order for a beneficiary to make such claim they must have genuine evidence to suspect that unauthorised activity of assets has taken place. Too often allegations are made without genuine evidence and usually made based on one beneficiary’s negative opinion of the executor or other family relative.
If evidence exists to suggest that a person has transferred or sold assets without authorisation then a forensic accountant can be engaged to review financial records and determine if a misuse of funds has occurred.
6. Challenging testamentary capacity of the testator
Testamentary capacity involves one’s ability to comprehend the obligations of creating a Will and the impact it will have on the beneficiaries after the testator’s death. Testamentary capacity requires a person to be of sound mind at the time of preparing and executing their Will.
Sometimes a beneficiary or other family member will contest the Will due to a belief that the deceased did not have the mental capacity to understand the consequences of creating the Will.
Similar to a claim for undue influence, if a claim is successful on the grounds of testamentary capacity then the Will is deemed invalid and therefore, any previous Will can be considered or intestacy laws will determine how the estate assets are distributed.
Enquire about a Will dispute
If you believe you may have grounds to challenge a Will or if you think that you may find yourself in a Will Dispute, or needing to Defend a Will please do not hesitate to contact the team at Hentys Lawyers today.