Discriminating amongst your heirs


Frank is married with a son and a daughter.  He has two grandsons which are his daughter’s children and two granddaughters which are his son’s children.
Frank is not without resources and has given both his daughter and his son plenty of money in the past to help them with their lives.
When he came to see us he said he wanted his Will to give 25% of his estate to his son and 75% to his daughter.  When we asked why that was he said because his son is adopted and his daughter is his natural child.
He also wants to give a very substantial bequest to his grandsons but nothing to his granddaughters.  When we asked why he said because his grandsons will carry on the family name whereas the granddaughters will lose the name when they marry.
We have had to advise Frank that there is a risk that his Will could be challenged by the family after his death.
A deceased person’s children are eligible to make a claim against an estate under the NSW Family Provision Act.
The Act says that they are entitled to claim such amount “as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be [paid] for the maintenance, education or advancement in life of the eligible person".
So there is no inherent obligation on a parent to divide their estate up equally among their kids.  It is just that if they don’t then an unhappy child could make a claim.
Where, as in this case, the child is reasonably well-off, the chances of success may be lower.  But the courts take into account the standard of living that the claimant was used to and may make an order regardless of the relative wealth of the claimant.
The reason stated by Frank for discriminating against his son is not a defence to a claim under the Family Provisions Act.
The differential treatment of the granddaughters as opposed to the grandsons will only allow the granddaughters to commence a Family Provision Act claim if the granddaughters were at some point wholly or partly dependent on Frank. 
In light of the advances that Frank made to their parents that were no doubt used at least in part to maintain their lifestyle they may be able to make an argument that will qualify them to make a claim.
In any case the differential treatment is likely to provoke their parents into a claim in order to assuage their ill-feeling as a result of their daughters missing out on a bequest.
Again the reason given for discriminating against the granddaughters is not a good defence to a claim.
In our next issue we’ll talk about whether it is a good idea to put the reasons for discrimination of your heirs into your Will or whether there are other ways for a deceased to put his argument to the Court from beyond the other side.

If you would like more information, please do not hesitate to contact Townsends Business & Corporate Lawyers on (02) 8296 6222.