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Family provision claims – a case study

Suchara Fernando

03 Jun 2019

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  • Wills & Estates
smooth water with circles

Family provision claims can be made when family members feel they were not sufficiently provided for in a will. In this article Suchara Fernando outlines a 2017 case that demonstrates the importance of updating your will and considering potential family provision claims. This case study follows on from Helen Phelps’ recent article on family provision claims.

The case – Lemon v Mead [2017] WASCA 215

In 2017 the Western Australian Supreme Court of Appeal considered a claim brought against an estate under the Family Provision Act 1972 (WA).

The Act – Family Provision Act 1972 (WA)

The Act provides that certain family members of a deceased person, in certain circumstances, can seek an order that further provision be made for them from the deceased’s estate. Those circumstances are where they allege that the provision made for them either under the deceased’s will, or pursuant to the terms of the Administration Act 1902 (WA), was inadequate.

Background

The late Mr Michael Wright’s estate was valued at over approximately $1 billion. He had left Ms Mead $3 million to be held on trust until she turned 30 years of age. He also included conditions such as not receiving any money if she became an alcoholic or became involved in ‘untraditional faiths’. By contrast, Mr Wright had left most of his estate to his three children from previous relationships.

Ms Mead brought a claim seeking an order that the provision made for her in Mr Wright’s will was inadequate.

The Original Decision – Mead v Lemon [2015] WASC 71

The Supreme Court of Western Australia found that Mr Wright never lived with Ms Mead’s mother and he paid the legally required amount of child support for Ms Mead. He also paid for her private school tuition.

Although Ms Mead and Mr Wright were quite estranged and hardly spent any time together, the Supreme Court found that Mr Wright had failed to adequately provide, regardless of their relationship. The Court made an order that Mr Wright’s estate provide Ms Mead $25 million.

This decision was appealed by the defendant’s executor.

The Appeal – Lemon v Mead [2017] WASCA 214

The original decision was overturned by the Court of Appeal on the basis that, under the Act, the Court’s discretion is fettered by what would be an ‘adequate’ award for Ms Mead’s ‘proper maintenance’. As a result, the Court of Appeal reduced her sum from $25 million to $6.14 million. It also ruled that an independent trustee must manage Ms Mead’s funds until she turns 30 years old.

Lessons

It’s important to remember that the court can alter the distribution of your estate if you fail to adequately provide for the proper maintenance of your spouse or children. Also, if you change your will, it’s important to remember to consider the needs of everyone who may have a claim on your estate.

How can we help?

Our Wills & Estates team can help you make or update your will. This will ensure that your estate will be distributed in the way that you wish it to be, and that you are ensuring that you’re meeting your obligations to family members. Please contact them by email or on 02 6285 8000 to arrange a meeting.