24/09/2008

The Succession Amendments (Family Provision) Bill was introduced to Parliament in June this year.  The Bill will amend the laws in New South Wales that ensure that adequate provision is made for members of the family of the deceased person and other persons living in a close personal relationship with the deceased at the time of death.

The Bill is also part of the overall aim for uniform succession laws in all jurisdictions in Australia.

The most important amendments include:

·          The type of eligible persons who may apply to the Court for a family provision order in respect of a deceased’s estate.  Under the Bill “a person living in a close personal relationship with the deceased at the time of death” may now apply for a family provision order. 

·          The time limit for making an application to the Court for a family provision order.  The application must be made within 12 months of the date of death, whereas at present, there is 18 months to make an application. 

·          The making of an additional provision for a person.  The Bill provides that the Court, having already made an order, may make an additional provision for a person if:

o       there is a substantial detrimental change of circumstances; or

o       the estate had undisclosed property and the estate was greater in value than first thought and the Court would not have made the earlier order if the undisclosed property had been revealed.

The Bill introduces this concept of undisclosed property and the consequences of failing to disclose all assets of an estate.  Executors need to be particularly careful to disclose all estate assets to prevent possible further claims.

·          Mediation before a Court hearing.  The Bill actively encourages litigants to a family provision dispute to explore all settlement options prior to the hearing.  Litigants who do not want to participate in a mediation will need to convince the Court why mediation has no prospects of resolving the ligation.

·          The payment of legal costs.  The Court has always had the power to order costs in family provision claims any way it deems fit.  The Bill enables regulations to be made that will cap legal costs, particularly in the case of small estates of less than $750,000.  This may have the effect of dissuading litigation, as some litigants may not want to pay from their own pocket.

For any further information in relation to the new Bill or Estate Planning generally, please contact Townsends Business & Corporate Lawyers on (02) 8296 6222.