The testator’s family maintenance legislation (“TFM”) exists for the purposes of “making of provision for the maintenance of members of a family who are found in need of such maintenance when the family tie is broken by death.”[1] The current model of TFM in Western Australia is governed by the Family Provision Act 1972 (WA) (“FPA”). The FPA allows certain categories of applicants to seek an order of the Supreme Court of Western Australia to increase provision from the estate of a deceased person in their favour. The Court can only increase provision by using assets which were owned by the deceased in their personal capacity or those assets which are payable to the legal personal representative of the estate (“estate assets”).[2] In the absence of fraud, undue influence or incapacity, the Court has no power to reverse property transactions made to third parties during a deceased person’s lifetime (“third party transactions”).[3] Notional estate provisions (“NEP”) are a legislative intervention strategy enacted by the NSW state government in an attempt to prevent avoidance of the TFM law. NEP empower courts, in limited circumstances, to exercise their discretion to deem property held by third parties (“third party property”) as an estate asset for the purposes of making an order for increased provision. NSW is the only state in Australia to adopt a NEP framework.[4]

 

There are a number of situations not contemplated by the TFM legislation that render it wholly ineffective. The problem is not a new one. For many years, estate lawyers have been able to thwart the intent of the TFM Law.[5] This problem was clearly explained by Gleeson CJ in Barns v Barns[6]:

 

“Such legislation was necessarily limited in its effect by the testamentary setting in which it operated. The capacity of a court to give effect to the moral claims of a person was limited by the extent of the deceased’s estate, as well as by other competing claims on the deceased’s bounty. The legislation had no practical effect in relation to property of which the deceased was not the beneficial owner at the time of death. Thus, a legally effective disposition of property prior to death placed such property beyond the reach of the legislation.”

 

The system of Western Australian TFM legislation does not have any mechanisms to prevent avoidance. It is difficult to see why NEP should not be implemented when other areas of law, such as family law, bankruptcy law, and many others; have effectively implemented anti-avoidance legislation.

 

Craig Gregson LLM TEP

 

Senior Associate

 

Havilah Legal
To learn more about affordable fees, contact our experienced Perth Estate Lawyers today.

 

(Disclaimer: The material in this article is of a general nature and intended for information only. It is not intended to be comprehensive and does not constitute legal advice. Any person with a specific legal issue should consult a lawyer.)

 

  1. Re Jacob Morris (Deceased) (1943) 43 SR (NSW) 325, approved in Liebermann v Morris (1944) 69 CLR 69 and Barns v Barns [2003] 214 CLR 169. ↑
  2. See the definition of s7 FPA. ↑
  3. Natural or otherwise. ↑
  4. Ss76 and 80 of the Succession Act 2006 (NSW)(“SA”). ↑
  5. See Settlement upon Mistress and Illegitimate Child for Purpose of Evading the Inheritance (Family Provision) Act 1938 (UK) being the title to a deed which allows a dependent to disclaim their interest in an estate inter vivos. ↑
  6. Ibid [2003] HCA 9 at [4]. ↑