Family Provision

Years ago I read a comic legal novel where a character, in a struggle against impure thoughts, tried to govern these by thinking about “Testator’s Family Maintenance” (or TFM).  The assumption was that this was the most unsexy aspect of law imaginable, and that contemplation of it would inevitably subdue any incipient concupiscence.

TFM is now known in NSW as the Family Provision Act (FPA).  It may not be sexy, but it brings people to court who, absent divorce or some tortious misfortune, would never expect (and could never afford) to be there.

And what usually brings them there is fighting with their siblings over their parents’ estate.

Prior to the nineteenth century there were legal restrictions, at least in relation to land, to how you could leave your property by will, although these were relatively easily circumvented by the wealthy with proper legal advice.  In English law these were then replaced by absolute freedom of testamentary disposition.  The original impetus of Family Provision legislation, which was first introduced in New Zealand at the end of the nineteenth century and spread to Australia and elsewhere shortly after, was to protect widows and children against the testamentary caprices of the husband and father.  Its motivation had something in common with the first-wave feminism which underlay temperance movements of the period.

As recast in the present law, if you are an “eligible person” you can apply to the court to:

“order that such provision be made out of the estate … of the deceased person as, in the opinion of the Court, ought, having regard to the circumstances at the time the order is made, to be made for the maintenance, education or advancement in life of the eligible person”

In effect the court can rewrite a will in favour of “eligible persons” according to what it thinks a person’s will should have said if it were being written now (bearing in mind that wills are often made many years before a person dies and by the time the court considers the order the situation may have changed even further).  If there isn’t a will, it can do the same thing to vary the distribution which the law otherwise provides for in that case.

At first, courts operated according to a relatively narrowly defined orthodoxy as to what provision should have been made, using as their yardstick the “just and wise testator.” In general, the concentration was on provision for widows, children, and unmarried daughters. Even as the classes of eligible persons expanded, they took into account that the paterfamilias was entitled to use his will making power to reward the filial and to admonish or rebuke (and hence hopefully to keep in line) the unfilial or black sheep who had commited “disentitling conduct.”

Gradually, the classes of eligible persons and the range what is encompassed by “maintenance, education or advancement in life” have expanded. Judges are liberally less inclined to take any view on filial or unfilial conduct and in particular are reluctant to wade into the rights and wrongs of the behaviour of competing claimants. However, this disdain for moral minutiae is not shared by family members themselves for whom these matters are hardly minutiae and whose views are also naturally affected by their interest, one way or the other, in the outcome.

Because the discretion of the court is so widely cast, it can be difficult even for lawyers to predict the outcome of contested claims for family provision. Even if a prediction can be made, it will be even more difficult for family members to accept this. Children who have cared for their parents in their old age find it hard to accept that other, often long estranged, children will get an order in their favour. Children who have never caused their parents grief will rankle at the thought that the improvident or incompetent sibling who has only ever caused the family grief or who has, in their eyes, spent a lifetime sponging off the parents, will get yet more from the estate at their expense.

In these cases, one party will be defending the status quo and hence the interests of the principal beneficiaries. Unless that party behaves unreasonably, they will usually have their legal costs paid in full out of the estate. The claimants, if they are successful, will also probably have their costs paid out of the estate (though not necessarily in full). If claimants already have an entitlement to the estate, in effect they will end up paying their costs and possibly the costs of the person defending the status quo out of that entitlement if they lose. But even if they win, the pot of what will be left will be depleted by costs one way or the other.

The situation is ripe for a try-on by almost any family member with any kind of need. As parties run up legal costs, they can actually strengthen their claim that they need to be provided for simply because they now have to pay these costs – a bit like that scene in “Blazing Saddles” where the sheriff takes himself hostage and threatens that if he is attacked “the nigger gets it.” In the case of a typical small estate (just mum and dad’s house) there could well end up being very little left for anybody if the parties cannot step back from their views of what is right and wrong and settle the case so that, rather than the lawyers, someone in the family at least will get the money.

There have been some attempts to reform the law, and I think there is some new legislation on its way, but I am not sure if they will ever succeed.

The reason for this post is that recently I participated in a mediation in an attempt to settle a dispute over what, in the eyes of the lawyers, is a “modest estate.” It didn’t settle. Now I ask myself, did it fail to settle because I was not nasty enough to the other side? Did it fail to settle because I didn’t do enough to scare my own client about what my client stands to lose if the case goes ahead?

Of course there were other lawyers involved, and there was a court-appointed mediator who was the worst mediator I have ever seen (he was a court officer and at least he was free, but the parties got what they paid for), and there were the parties themselves, so I’m not the only one to blame. Still, it’s disappointing to see these people heading for a train wreck which is going to cost at least one of them and probably both of them quite a lot more money when neither of them has any money to spare. Even though some of that money might be coming my way, I wish I could have stopped it.

3 Responses to “Family Provision”

  1. Legal Eagle Says:

    Those TFM claims are bloody awful. When I worked in the Court, we had a few of them, and it always ended with witnesses in tears because she got more than I did…

    You could see that the parties’ lawyers had tried to reason with them, but to no avail (it was now a forum for proving “I did more for him than YOU ever did”).

  2. Lives of the rich and poor « Stumbling on melons Says:

    […] the other hand, in a number of FPA matters where the competing needs of either welfare recipients or the working poor are concerned, […]

  3. Family Provision 2 « Stumbling on melons Says:

    […] posted about Family Provision before.  I still think of it as that though now it is simply “provision” under the […]

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