What is a family provision claim, and how does it affect my inheritance?

A family provision claim is one of the most disruptive things that can happen to an estate. Even a straightforward claim can add 12 months to administration. A contested one can take years. If you are a beneficiary of an estate that's facing (or might face) a claim, understanding how the process works helps you plan and helps you know what your options are while you wait.

What is a family provision claim?

A family provision claim is an application to the Supreme Court by an eligible person seeking a share, or a larger share, of a deceased estate than the will (or intestacy rules) provided. Every Australian state and territory has legislation allowing certain people to bring these claims. The law recognises that a deceased person owes moral obligations to certain people, and those obligations can override the terms of the will.

The claim is against the estate, not against other beneficiaries personally. If the court orders further provision to the claimant, that provision comes out of the estate, therefore reducing what other beneficiaries receive.

Who can make a claim?

Eligibility varies by state, but common categories include:

• The deceased's spouse or de facto partner (current or former)
• Children (biological, adopted, and in some states stepchildren)
• Grandchildren, in limited circumstances
• Dependants who were being wholly or partly maintained by the deceased
• Members of the deceased's household

The court considers a range of factors: the claimant's financial situation, their relationship with the deceased, contributions they made, competing claims, and the size of the estate. There's no automatic entitlement, the person making the claim has to demonstrate a genuine need and a moral claim on the estate.

Time limits

Family provision claims must usually be brought within 6 to 12 months from the grant of probate or letters of administration, depending on the state. In NSW it's 12 months from the date of death; in Victoria it's 6 months from the grant of probate; other states sit between. Courts can extend these time limits in exceptional circumstances, but late claims are much harder to bring.

What happens to the estate while a claim is on foot?

Once a claim is made, the executor's ability to distribute the estate is significantly constrained. Distributing assets while a claim is pending exposes the executor to personal liability if the court later orders further provision to the claimant.

In practice, this means:

• Assets that were going to be sold are usually still sold, and proceeds are held by the estate.
• Distributions to beneficiaries are usually paused entirely, or limited to small interim payments.
• Property that was going to be transferred is often held pending resolution.
• The estate may be required to remain open for years if the claim is heavily contested.

How claims are resolved

The majority of family provision claims settle before going to a final hearing. Most Australian courts require the parties to attempt mediation before setting a hearing date. A negotiated settlement typically involves the claimant receiving a lump sum (or a share of a specific asset) in exchange for withdrawing the claim.

Where the parties can't agree, the matter proceeds to hearing. This is slow (typically 12 to 24 months from filing) and expensive with costs running to $100,000 or more, often paid from the estate.

What if you are a beneficiary and a claim has been made?

You have three broad options:

• Support settlement. Where the claim has merit and the estate can absorb it, most beneficiaries prefer to settle. Legal costs eating into the estate usually leaves everyone worse off.
• Defend actively. Where the claim looks weak or opportunistic, beneficiaries can instruct the executor to defend. This is expensive and slow but sometimes necessary.
• Wait. Whatever the strategy, beneficiaries typically face a long delay before receiving their inheritance. In many cases, an inheritance advance is used to bridge that period, assessed on the beneficiary's minimum likely entitlement after the claim is resolved.

Can I get an advance if a family provision claim is on foot?

Sometimes. It depends on the strength and size of the claim and how much of the estate is likely to be affected. Where there's a broad range of possible outcomes, Inherita will typically assess against the lower end, that is, the minimum a beneficiary is likely to receive even if the claim succeeds. Where the claim is minor or speculative, the assessment is closer to the pre-claim entitlement.

Every claim is different, and we work with the executor and (where necessary) the estate's solicitor to form a view. If the claim is highly contested or the potential impact is very large, an advance may not be possible until there's more clarity.

For definitions of the other terms that come up in a contested estate — caveat, residuary estate, testator and more — see our estate and probate terms glossary.

Frequently asked questions

Estate held up by a family provision claim? Inherita can advance against your minimum likely entitlement so you're not stuck in limbo while the claim resolves.