Many parents assume that dividing an estate equally between their children is the fairest approach they can take. However, treating children equally is not always the same as treating them fairly. Where an equal split fails to account for differences in contribution, financial need or personal circumstances, it can leave an estate exposed to challenge rather than protect it.
The financial stakes of estate disputes have grown considerably in recent years as property values have increased across Australia, meaning even modest family homes can now represent substantial estates. At the same time, blended families and a growing reliance on inheritance among younger generations have added further layers of complexity to what were once relatively straightforward estate plans.
Why equal splits create conflict
An equal split assumes every child is in the same position when an estate is administered. In reality, that is often not the case.
- Uncompensated contributions: A child who has spent years caring for an ageing parent or stepped away from their own career to do so may feel an equal split fails to recognise that contribution.
- Different financial needs: Where one child is living with illness, disability or financial hardship while another is financially secure, an equal split may not reflect those differences.
- Disagreements over indivisible assets: Equal ownership of a family home can create practical difficulties. If one child wants to remain in the property while the other wants it sold, neither can move forward without the other's agreement.
Family provision claims: the legal vulnerability
Under the Succession Act 2006 (NSW), making a Will does not give a person complete freedom to distribute their estate however they choose. The law recognises that a Will maker has a moral duty to make adequate provision for the proper maintenance, education and advancement in life of eligible beneficiaries, which generally includes their children. Where that duty has not been met, an equal division of an estate does not prevent an eligible beneficiary from challenging the Will.
The High Court's decision in Singer v Berghouse established the two-stage approach that continues to guide family provision claims. The Court first considers whether the applicant has been adequately provided for and, if not, what order should be made.
That principle was illustrated by the NSW Court of Appeal in Andrew v Andrew, where an equal division of an estate was ultimately altered because one beneficiary's financial circumstances justified greater provision. The decision reinforces that an equal split does not necessarily reflect what is considers appropriate in the circumstances.
What the Court takes into account
A family provision claim is not about deciding whether an equal division of an estate would be fair. Instead, the Court assesses each family's circumstances individually, balancing the interests of the applicant, the other beneficiaries and the estate as a whole.
In doing so, the Court may consider:
· The applicant's financial circumstances and future needs.
· The nature of the relationship between the applicant and the deceased.
· The size and nature of the estate, including the interests of other beneficiaries.
· Any financial or non-financial contributions made to the deceased or the estate.
In New South Wales, the Court's powers can also apply to certain assets not held solely in the deceased's name. Depending on the circumstances, property transferred before death, jointly owned assets and some superannuation benefits may form part of a notional estate to satisfy a successful family provision claim.
The financial and practical fallout of a contested Will
The financial and practical consequences of a contested Will can delay the administration of the estate, reduce its value through legal costs and place considerable pressure on the executor and the family members involved.
Estate litigation is expensive and Courts do not always order the unsuccessful party to pay the other side's costs. In many cases, legal costs are paid from the estate itself before any distribution is made. This means the longer a dispute continues, the less there may ultimately be for the beneficiaries to inherit.
Executors can also find themselves in an extremely difficult position, as they have a legal obligation to administer the estate in accordance with the Will while also responding appropriately to any claim that is made. An executor who distributes assets before a claim is resolved or the statutory waiting period has expired may be personally liable if the Court later orders further provision. Likewise, if they act unreasonably during Court-ordered mediation, they may find the Court refuses to reimburse their legal costs from the estate.
Disputes involving assets such as the family home or a family business can create significant practical difficulties. Where beneficiaries cannot agree on the future of those assets, neither can move forward without the other's agreement. In those circumstances, either party may need to apply to the Court for a forced sale.
Procedural rules families should know
Family provision claims are subject to strict time limits, making it important to seek legal advice promptly. In New South Wales, an eligible person generally has 12 months from the date of death to commence a claim.
Most Supreme Courts require parties to attend mediation before a matter proceeds to trial. As a result, an estimated 70 to 80 per cent of family provision claims are resolved at mediation without proceeding to a final hearing.
It is also important to remember that family provision claims are not limited to children. Depending on the circumstances, spouses, de facto partners, former spouses, grandchildren and other eligible dependants may also have the right to challenge a Will.
Reducing the risk of a dispute
Parents who want to reduce the risk of future disputes can take practical steps during their lifetime, including:
- Documenting the reasons for key decisions: A statement of wishes explaining why a particular distribution was chosen is not binding on the Court, but it can provide valuable context if the Will is later challenged.
- Recognising significant contributions: Where a child has provided long-term care or made substantial financial contributions, formally recognising those arrangements during life may help provide greater clarity when the estate is administered.
- Communicating intentions early: Many estate disputes arise from misunderstandings and unmet expectations rather than the assets themselves. Discussing estate planning decisions while family members are alive can help explain the reasons behind those decisions and minimise the risk of family conflict after death.
Planning for your family’s circumstances
An equal split may seem like the simplest solution, but every family is different. A Will that takes into account the individual contributions, needs and circumstances of each family member is far more likely to achieve the outcome a parent intended than one based solely on dividing an estate equally.
At Aubrey Brown Lawyers, our Wills & Estates team advises clients on preparing estate plans that reflect their family's individual circumstances and assists executors and beneficiaries navigating family provision claims.
