When preparing a will, you’re stating how you wish to distribute your assets when you die. Our clients are often unaware that if you are a parent, under the New Zealand Family Protection Act 1955 (FPA), you have a “moral duty” to provide for your biological children in your Will. If you do not provide for your children in your Will, you may be at risk of your children making a claim against estate.
At Gallie Miles, we have noticed an increase in claims being made by children, against their parent’s estates. We have set out some examples which explain this area of law and why it is important to discuss your Will with your lawyer if you intend to exclude a child.
Scenario 1 - The "Secret" Daughter
Charlie didn’t have a relationship with his daughter, Mia who he neglected from birth. Charlie never spoke to his new wife or two sons about Mia. However, Charlie discretely paid Mia’s child support but never contributed in any other way to support her financially or emotionally. Mia had a troubled upbringing and was in a bad financial situation. When Charlie died, he did not leave Mia any immediate benefits from his estate. Mia made a claim against her father’s estate when he died.
In a case similar to this, the Court has awarded a child 16 per cent or $400,000, (whichever is greater) from their parent’s estate.
As you can see, tensions in a relationship or a distant relationship between a parent and their child, is not enough to satisfy the court that a child can be excluded from their Will.
Scenario 2 – Large Estate and an Excluded Child
Paul claimed against his father’s multi-million-dollar estate because his father left his entire estate to his sisters, Kerry and Jan.
Rich Paul – Paul had some financial assistance from his father during his lifetime. Paul is a rich businessman, in good health and had a great relationship with his father. Paul proceeded with making a claim against his father’s estate as he was very upset about being left out. The likely outcome under these circumstances is that the Paul would still receive a “recognition award” at the lower end of the scale. In similar situations to this the courts have awarded up to 10% of the estate.
Poor Paul - However, if Paul was poor and of ill health, he would likely receive much greater provision from his father’s estate. In similar situations to this, a “needy” child has been awarded up to 26% of the estate.
Naughty Paul - If Paul was very naughty and abused his father physically, causing the police to get involved, then the Courts may consider Paul’s behavior to be “disentitling”. It is therefore likely that little or no provision could be awarded to Paul.
As you can see the awards which a child may receive, when making a claim against an estate, will be very dependent on the circumstances of the case.
Seek legal advice as soon as possible.
Gallie Miles can assist you with your estate planning to ensure that successful claims against your estate are prevented as best as possible. Get in touch here.