The Inheritance (Family Provision) Act 1972 (SA) (IFPA) allows certain family members to make a claim against the estate of a deceased person for provision (or further provision) out of the deceased’s estate. The principle of claiming against a deceased person’s estate was first introduced in South Australia in 1918 with the Testator’s Family Maintenance Act 1918 (SA).
The purpose of the IFPA may seem like a strange concept – that is, to be able to challenge the way in which a deceased person has decided to distribute their estate. This would appear to be counter-intuitive to making a Will. The provisions of the IFPA should be contrasted with the concept of “testamentary freedom” – that is, a person has the absolute power to determine how to leave their assets when they die. However, absolute testamentary freedom led to situations in which testators did not consider the moral duty they had to provide for their families, and left little or nothing to their spouses and children. Thus family provision laws were introduced.
The most recent case decided by the Supreme Court of South Australia under the IFPA, was Potter & Anor v Bellifemini & Anor  SASC 120. This case concerned a claim for provision by two daughters of the deceased. Both daughters were children of the deceased’s first marriage, and when the deceased and his first wife separated, both daughters initially lived with their mother. The net estate that was disclosed to the Probate Registry was approximately $68,000; a relatively modest estate.
Under the deceased’s will, the applicants were gifted the deceased’s superannuation entitlements equally, and the deceased’s second wife (the defendant in these proceedings) was entitled to the residue of his estate. Due to some changes in circumstances, the deceased withdrew all of his superannuation prior to his death. As such, the applicants did not receive anything from the deceased’s estate.
Section 7 of the IFPA provides:
(a) a person has died domiciled in the State or owning real or personal property in the State; and
(b) by reason of his testamentary dispositions or the operation of the laws of intestacy or both, a person entitled to claim the benefit of this Act is left without adequate provision for his proper maintenance, education or advancement in life,
the Court may in its discretion, upon application by or on behalf of a person so entitled, order that such provision as the Court thinks fit be made out of the estate of the deceased person for the maintenance, education or advancement of the person so entitled.
In order to determine whether a person is entitled to provision from the estate of a deceased person, a two-step process must be undertaken. This was best described in Singer v Berghouse (No 2) (1994) 181 CLR 201, where the Court stated:
‘The first stage calls for a determination of whether the applicant has been left without adequate provision for his or her proper maintenance, education and advancement in life. The second stage, which only arises if that determination be made in favour of the applicant, requires the court to decide what provision ought to be made out of the deceased’s estate for the applicant.’
The evidence from the applicants was not favourable to the defendant, with both applicants submitting that their relationship with the deceased deteriorated after the deceased began a relationship with the defendant.
The defendant argued that the principle of testamentary freedom still remains in place and ‘that the deceased was not in breach of any duty to the plaintiffs by leaving the entirety of his estate to his wife of more than twenty years. While the deceased may have intended his daughters to benefit under his will at the time that he made it, this intention clearly changed; if he had wished them to benefit at the time of his death, he would have changed his will to ensure that they did so.’ Accordingly, Judge Bochner determined that it was impossible to suggest the deceased did not know his daughters would not benefit under his will.
In considering all of the circumstances, including that:
- the estate was relatively small;
- the defendant was at the end of her working life with little opportunity to improve her financial circumstances;
- the applicants were in the middle of their working lives;
- the defendant was the main wage earner for eight years preceding the deceased’s death; and
- the defendant provided the deceased with care when the applicants did not,
Judge Bochner decided that the applicants were not left without adequate provision. Judge Bochner considered ‘I am of the view that any moral claim that the deceased had was met by ensuring the ongoing maintenance of his wife.’
This was a significant decision as it is extremely uncommon for an applicant to fail the first limb of the test, especially in circumstances where the applicants did not receive any provision from the deceased’s estate. In the 24 cases that were considered by the Supreme Court under the IFPA from 2000 to 2018, 22 of those cases were successful in ordering provision from the estate.
Another recent case in which the applicant failed the first limb of the test was Swanson & Anor v Reis & Anor  SASC 20. This case was also decided by Judge Bochner, where the applicant, who was the son of the deceased, claimed that he was left without adequate provision, in circumstances where the deceased gifted the applicant almost $80,000 immediately before her death. Judge Bochner decided that the applicant was not left without adequate provision, considering the relatively small estate, and the gift that the applicant had already received from the deceased.
These two cases highlight a shift in the attitude of the Supreme Court, seemingly making it more difficult to overcome the first limb of the test. The key takeaway from both of these cases is that the standard for proving an applicant has been left without adequate provision has now been raised, and prospective applicants should think carefully about whether their claim will be successful.