Applicants in family provision claims need to satisfy certain requirements in order to obtain an order for provision from a deceased estate. In some cases the nature of the assets or the small size of the estate make it difficult for the Court to balance ‘adequate provision’ with the interests of other beneficiaries. This is not a new problem in succession law, and a number of different approaches may be considered in order to make adequate provision for an applicant whilst also endeavouring to uphold the important principles of freedom of testation, and to ensure beneficiaries are not unfairly prejudiced.
By way of brief example, consider the following scenario:
House worth $400,000.00
Bank accounts worth $100,000.00
The deceased dies leaving a de facto spouse of 30 years and his 2 adult biological children. The deceased’s last will leaves the whole estate to his 2 children and makes no provision for the de facto spouse.
The de facto spouse has lived in the house with the deceased for the last 30 years. She has nowhere else to go and no assets of her own to support herself. The de facto spouse has no children of her own. It is likely the de facto spouse will need to move into a retirement village in the near future.
Societal attitudes generally support the idea that a person owes their spouse a primary moral obligation to make adequate provision for them after their death. In the scenario above, adequate provision has not been made for the de facto spouse and a family provision claim is likely to be made.
Faced with the scenario above, the Court may consider ordering provision for the de facto spouse from the estate, but not in such a way that the children are ultimately deprived of their entire inheritance. Making provision in the estate available to the de facto spouse to meet her immediate needs, however, does not necessarily mean the de facto spouse would need an absolute interest in the estate property. To meet the needs of the de facto spouse, and to still preserve an inheritance for the children, the Court may consider making a Crisp order.
A Crisp order, named after the decision in Crisp v Burns Philp Trustee Company Ltd (Supreme Court (NSW), Holland J, 18 December 1979), usually takes the form of an order from the Court that grants an applicant a portable life interest in particular items of estate property. This order allows the applicant to use the value of specific estate assets to secure appropriate accommodation and to meet their ongoing maintenance needs.
Using the scenario above, a Crisp order may mean the de facto spouse is able to stay in the house for as long as she needs, and then if required, she may use the value in the house to fund an accommodation bond at a retirement village. Upon the death of the de facto spouse, the balance of the funds used by the de facto spouse may then be distributed to the children as was the testator’s original wish.
The flexibility Crisp orders offer the Court and parties seeking to negotiate or settle disputed wills matters are worth considering, although as with all legal matters, there can be traps. Make sure you get the right legal advice, whether you are seeking to make a claim for provision, or defend against one.