Family relationships can be complicated and are often fraught with emotion, making the fair distribution of an estate a difficult task. It is a common assumption that a person may distribute their assets after their death as they wish, but this is not entirely true in New Zealand. Will-makers are limited by legislation that allows eligible family members, such as adult children, to challenge a will if they have not been adequately provided for through their parent’s estate. It is therefore crucial for parents to understand the legal risks of disinheriting a child in their will, regardless of the reasons for the decision.
The Family Protection Act 1955 (“FPA”)
The law allows the court to redistribute a parent’s estate if it is necessary to remedy a “breach of a moral duty” to a close family member.
The FPA states that a parent has a moral duty to provide for their children in their will. If a child has died, then their children (the will-maker’s grandchildren) must be provided for. This duty exists irrespective of the state of family relationships. If this duty is breached, and the child who has been disinherited makes a legal claim against the will-maker’s estate, the court may issue an order that provides them with a portion of the estate, notwithstanding the will-maker’s wishes.
Our Advice
When a child becomes estranged from their parents, a parent’s natural response may be to remove them from their will. While understandable, this action is likely to cause unnecessary stress to the executors, as well as additional costs and delay to the administration of the estate.
To fulfil a will-maker’s moral duty to their children, it is recommended that parents provide each child with between 10% and 20% of their estate, regardless of the nature of their relationship, to avoid a legal claim against their estate in the future. There are a number of factors that the court takes into account, but the goal is to make a provision that the court would regard as sufficient to fulfil the will-maker’s moral duty to provide for their children.
To defend such a decision, we often recommend that a will-maker signs an affidavit at the same time as signing their will. This document should clearly explain the reasons for the provisions made in a will. A well drafted affidavit may well dissuade a prospective claimant from going to court. It should demonstrate that the will-maker’s decision was considered, that the will-maker was aware of their moral duty to their children, and it also allows the will-maker to explain their reasoning, which can be helpful in this situation.
If parents wish to withhold an inheritance from their child, they must accept the risk, emotional strain, time, and costs associated with litigation. However, executing an affidavit that explains the circumstances and the will-maker’s intent is invaluable because it can become a critical piece of evidence in favour of the estate.
Ultimately, the court will always balance a will-maker’s right to distribute their estate freely against their moral duty to provide for their children.
Please contact our team if you would like to update your will and we will be happy to guide you along this process.
