If you are the executor of a will and someone has filed a claim pursuant to Part IV of the Administration and Probate Act 1958 (Vic) (Family Provision Claim), then you will need to respond to the claim.
If a person has filed a Family Provision Claim, then the person bringing the claim (Plaintiff) will have filed an originating motion – being the first court document that initiates the proceedings, in either the Supreme or County Court of Victoria.
The process for defending a will in Victoria is as follows:
- Within ten days of receipt of the originating motion, you will need to file a notice of appearance. A notice of appearance is a document that informs the court whether you have solicitors acting on your behalf or whether you are defending the claim on your own.
Given the complexity of Family Provision Claims, we strongly recommend that you obtain expert advice from our Wills & Estates team before proceeding to defend a Family Provision Claim.
- Once a notice of appearance has been filed, the Plaintiff will need to file a ‘summons for directions’. This document refers the Family Provision Claim to a judge or judicial registrar for a directions hearing. Directions hearings for Family Provision Claims are only heard on specific dates allocated by the Supreme Court.
- A directions hearing is a procedural hearing, where the judge or judicial registrar will consider the Family Provision Claim and then make orders that govern the progress of the claim. In particular, the orders will require:
- (a) the filing of affidavit material on behalf of the estate;
- (b) the executor of the estate to notify the beneficiaries under the testator’s will and any other interested persons of the proceedings;
- (c) the parties to participate in a judicial settlement conference or mediation.
- All Family Provision Claims filed in Court in Victoria are referred to a judicial settlement conference or mediation. Whether a judicial settlement conference or mediation is ordered depends on the net value of the estate. The purpose of the judicial settlement conference or mediation is to give the parties the opportunity to resolve the Family Provision Claim without the need to incur the significant costs of a trial.
- If a Family Provision Claim cannot be resolved at a judicial settlement conference or mediation, the matter will be listed for a pre-trial directions hearing. This is another procedural hearing where further pre-trial orders will be made before the matter can proceed to a trial before a judge who will decide the outcome of the claim.
What are my obligations as executor in defending a Family Provision Claim?
The starting point is that an executor is obliged to uphold the terms of a testator’s will. However, an executor also has an obligation to preserve the value of the estate for the benefit of the beneficiaries.
This means that an executor cannot defend a Family Provision Claim at all costs. Instead, the executor must assess the merits of the Family Provision Claim and seek to compromise the claim if it is reasonable to do so. This is because Family Provision Claims can be very costly, and in many cases it is more commercially viable to compromise a Family Provision Claim than it is to defend the claim to the conclusion of a trial, where there is no guarantee of success.
An executor also has an obligation to notify the beneficiaries of a will of any claim against the estate and keep them updated regarding the progress of the litigation. In some cases, it may be necessary to consult with the beneficiaries to obtain evidence to respond to the Family Provision Claim.
If an executor seeks to compromise or settle a Family Provision Claim and the settlement impacts upon the interests of beneficiaries under the will, then they will be obliged to obtain the consent of the beneficiaries to the settlement agreement. If an executor does not obtain consent of the beneficiaries, then they could be personally liable to pay funds to the beneficiaries that they otherwise would have received under the will.
What can I do if a beneficiary does not agree to a settlement of a Family Provision Claim?
In certain cases, a beneficiary may refuse any settlement agreement reached between an executor and a Plaintiff for a variety of reasons. This can create significant problems for all parties.
However, an option available to an executor in these circumstances is to file an application to the Court for final orders in accordance with the settlement agreement. In such an application, the Court would consider the Family Provision Claim and the settlement agreement, and determine whether settlement is appropriate. If the Court is satisfied the settlement agreement is appropriate in the circumstances, it would issue final orders that would protect the executor for distributing the estate in accordance with the agreement.
What can I do if the Family Provision Claim filed against the estate is very weak?
In Victoria, any Plaintiff who files a Family Provision Claim must file a ‘proper basis’ certificate that states the claim they have filed is a valid claim and has a proper basis (ie, it is not vexatious or brought for an improper purpose).
If a Family Provision Claim has been filed against an estate and you consider it to be very weak or without a proper basis, then it may be possible to file an ‘application for summary dismissal’ under section 63 of the Civil Procedure Act (Vic).
An application for summary dismissal is an interlocutory application where the Family Provision Claim is referred to a judge who has the power to dismiss the claim without the need for a trial. However, applications for summary dismissal are not easily granted because the Court must be satisfied that the claim has no real prospects of success. This can be very difficult to prove.
Who pays the costs of a Family Provision Claim?
As a general rule, an executor is entitled to be reimbursed for the legal costs incurred in defending a Family Provision Claim from estate funds. Conversely, there is no automatic presumption that a Plaintiff’s costs of a Family Provision Claim will be paid by the estate.
However, ultimately the payment of legal costs upon the conclusion of a Family Provision Claim is the sole discretion of a judge at trial.
Generally speaking, legal costs are said to ‘follow the event’, which means that the successful party will have their costs paid from the estate. This means that if a Plaintiff is successful, then the Court is likely to order that their costs are to be paid from the estate.
If a Plaintiff or executor has behaved unreasonably in the Family Provision Claim, then the Court has the power to order that they pay their own legal costs personally, even if they are successful.
Generally, a party to a Family Provision Claim will be deemed to have behaved unreasonably if they have rejected reasonable offers to settle or if they have behaved in a manner that has unnecessarily increased the parties’ legal costs (eg by sending voluminous correspondence, by filing unnecessary or deficient affidavit material, or by not complying with orders of the Court).