Can I leave my children unequal shares in my Will?
Wills and Estates
Can I leave my children unequal shares in my Will?
Most parents preparing a Will want to act fairly towards their children. For many, that means dividing everything evenly. For others, fairness looks a little different once you weigh up assistance already given to one child, the health or financial difficulties another faces, or the child who took on parental care in later life.
There is no legal obligation to treat your children equally. The law lets you leave your estate to whomever you choose, in whatever shares you think are appropriate. However, what it does not do is guarantee that an unequal split will go unquestioned, or that everyone affected will accept it. In some cases, the result is a family provision claim against your estate under the Succession Act 2006 (NSW).
Why a parent might leave uneven gifts
Every family is different and there are many legitimate reasons a parent might choose not to divide their estate equally. Some of the more common ones include:
- Historical financial assistance: Perhaps you put money towards a home deposit, covered school fees for the grandchildren, or helped one child through a period of financial hardship. Where the others did not receive the same help, you might feel it is fair to even things up by leaving that child a smaller share. This can be documented in your will.
- Your children are not in the same position: One child may be comfortable while another is less financially secure or has greater needs, for instance where they live with a disability. It is natural to want to leave more to the child who will need it most.
- Contributions to your care: Often one child carries much of the caregiving in a parent’s later years and you may want their share to reflect the time and effort they gave.
- A relationship has broken down: Families can grow apart and sometimes contact ends altogether. If you are estranged from a child, you may not want them to share equally with the others, or at all.
- You want to provide for someone else: You might prefer to leave something directly to a grandchild, or to a relative who depends on one of your children. Provisions like these can leave your children with unequal amounts.
Whatever your reasons, how they are recorded in your Will (and other documents) is what determines whether it gives effect to your intentions.
Your freedom to choose and the risk of a family provision claim
Succession law recognises testamentary freedom, that is, the principle that a person may decide how their estate, meaning their assets, property, money and personal belongings, is distributed after their death.
However, that freedom is limited. In New South Wales, certain people close to you, such as a spouse, child or dependant, may ask the Court to intervene if they believe they were not adequately provided for in your Will. This is known as a family provision claim and it is brought in the Supreme Court of NSW.
It is therefore important to recognise that even a carefully drafted Will can face a claim. If the Court finds that a child was left without adequate provision for their proper maintenance, education or advancement in life, it can order a larger share be provided to them, sometimes well beyond what you intended or would consider reasonable.
What the Court weighs up in a family provision claim
When deciding whether to award further provision to an applicant, the Court has regard to a range of factors, including:
- The size of your estate;
- The nature of your estate, that is, the assets it comprises;
- The history of your relationship with the applicant, including whether they were dependent on you;
- The applicant’s financial position compared with that of your other beneficiaries, and the extent of their need;
- Anything the applicant did for you or contributed to your estate;
- Any provision you made for the applicant during your lifetime;
- Your reasons for the distribution, as set out in your Will or in a separate document recording your testamentary intentions.
Even a genuine estrangement or clearly documented reasons for your decisions will not always defeat a claim, particularly where the applicant has genuine financial need.
How a section 100 statement can help
When a Will leaves unequal gifts, it records what each person is to receive but does not (and generally should not) explain why those decisions were made. A section 100 statement under the Succession Act 2006 (NSW), sometimes called a statement of testamentary intention, is a separate written document in which you set out the reasons behind the way you have divided your estate. It is prepared during your lifetime and kept with your Will, so that if your estate is later contested there is a record of your reasoning alongside it.
There are a few important points to understand about these statements:
1. A section 100 statement is not binding and cannot prevent an eligible person from bringing a family provision claim. What it can do is help your executor and the Court understand the reasons for your decisions, which is very often the central question in a dispute. In short, it helps your executor to defend any claim made on the estate.
2. The Court decides how much weight to give the statement, having regard to all the circumstances in which it was made. This includes how recently it was prepared and whether you had any reason to misrepresent the position at the time.
3. A statement carries the most weight when it is clear, factual, and free of bitter or accusatory language. A calm and reasoned explanation shows that your Will was carefully considered, rather than the product of mistake, spite, or pressure from another person.
For these reasons, it is worth preparing a section 100 statement with the assistance of a solicitor, who can set out your reasons in a way that is factual, honest, measured, and useful to those who wish to give effect to the wishes within your Will.
Does an equal split of your estate avoid disputes?
Dividing your estate equally will not always prevent a dispute, but it can reduce the likelihood of one.
Disputes are not only about money. A child who feels overlooked, hurt or blindsided may be just as likely to bring a claim and an unequal gift that comes as a surprise can heighten those feelings. Treating your children equally reduces that risk and can help preserve family relationships.
That said, an equal division is not always the fairest one. Where you do choose to leave unequal gifts, it is worth taking some practical steps to reduce the risk of a challenge.
What happens if your Will is challenged
When a family provision claim is brought, the Court will direct the parties to mediation before any hearing. Many claims settle at that stage, but the legal costs and the strain on relationships can still be significant.
A successful claim can change how your estate is distributed, increase the cost of administering it and leave less for your other beneficiaries. In some cases, the legal costs of all parties are paid from the estate, reducing what remains for those you intended to provide for. The need for considered estate planning is therefore abundantly apparent.
How Fioro Legal can assist
We appreciate that every family is different and that these decisions are rarely simple.
Whether you are considering unequal gifts, planning around a blended family, or concerned about protecting your estate from a dispute, our team of experienced estate planning solicitors is well positioned to assist you in several ways, including:
- structuring your Will to carry out your wishes while reducing the prospects of a successful claim;
- recording your reasons in a section 100 statement, in a clear and considered way that explains your reasoning and can assist your estate should the Will be contested later; and
- giving you an honest assessment of how strong a disappointed party’s claim might be.
If you would like to speak with someone about preparing or updating your Will, or about a section 100 statement to accompany it, please contact our team today.
This article is general in nature and does not constitute legal advice. For tailored advice about your circumstances, please contact us.
To find out more or to arrange a consultation, call us on 0481 848 450 or email info@fiorolegal.com.au
Mobile: 0481 848 450
Email: info@fiorolegal.com.au
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