The Law of Intestacy and the Changing Nature of Families

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The Law of Intestacy and the Changing Nature of Families

01 SEPTEMBER 2023 | by Margaret Cusenza

An intestate estate occurs when a person dies without a will or where a will only deals with part of a person’s property.

This article sets out the South Australian legislation applicable on an intestacy and then considers interesting authorities in Australia in intestate estates which involve blended families, foster and adopted children and other interesting family dynamics.

Legislation

While each State has legislation prescribing who is entitled to the estate on an intestacy, this article provides a summary of the South Australian legislation relating to the entitlement of spouses, domestic partners and lineal descendants (referred to as issue in the Act¹) only.

Section 73G of the Administration and Probate Act 1919 (SA) (Act) provides that:

1. where there is a surviving spouse or domestic partner and no issue, the spouse or domestic partner is entitled to the whole of the estate;

2. where there is a spouse or domestic partner and issue, the spouse or domestic partner is entitled to:
     a. the whole of the estate if it does not exceed $100,000; or
     b. if the estate exceeds $100,000, that sum and one-half of the balance of the estate, with the issue entitled to the remainder in equal shares; and

3. where there is no spouse or domestic partner, the issue is entitled to the whole of the estate.

Where there is a spouse and a domestic partner, each have equal shares of the property that would have been received by a single spouse or domestic partner². It is also interesting to note that if a dispute arises between a spouse or domestic partner as to the division, the administrator can sell the chattels and divide the proceeds of sale equally between them.

Although the legislation in each of the States sets out how an intestate estate is to be distributed, claims can be made which impact this.  For example, claims can be made by eligible claimants under the family provision legislation in each State.  In South Australia, this legislation is the Inheritance (Family Provision) Act 1972 (SA) (IFP Act).

Authorities

In the Estate of Bridges, Deceased³ 

This noteworthy case was the first application under the IFP Act, which was the first act to make provision for illegitimate children (i.e. children born outside of marriage) in South Australia.

The Applicant was the illegitimate son of the Deceased who died intestate. The Applicant’s mother, Ms Bridges, was employed by the Deceased as his housekeeper and they developed a friendship. She lived with him as his wife and the question of marriage was frequently discussed. The Deceased described himself as a parent of the child, and the Applicant, Ms Bridges and the Deceased lived together as a family.

The Court held the Applicant was entitled to claim under the IFP Act because he was an illegitimate child of the Deceased but observed that difficult questions may arise as to the appropriate provision in the case of illegitimate children. The Applicant was treated as a child of the Deceased and the Respondents’ position was that the Court should make provision for the Applicant as if he were legitimate. The judgment commends the Respondents for that attitude, which is interesting given current community standards. 

Ultimately, the Court made orders, inter alia, that the trustee was:

1. empowered to purchase a house property in Millicent and to furnish it for Ms Bridges and the Applicant at a cost not exceeding $15,000;

2. to permit the Applicant and Ms Bridges to live in the house until the Applicant turns 18; and

3. to pay Ms Bridges such sum as is sufficient to provide for the maintenance and education of the Applicant.

Once the Applicant turned 18, he was to receive a legacy of $20,000 and one half of the net residue of the estate remaining after taking that legacy into account.

The Applicant appealed on the ground that the amount awarded to him was not enough for his proper maintenance, education and advancement in life. The Applicant submitted that he had a moral claim to the whole of the estate (subject to attaining the age of 18) and that the brothers and sisters of the Deceased did not have a comparatively moral claim.

Chief Justice Bray remarked that Parliament had not chosen to provide an illegitimate child the same right of succession as a legitimate child. His Honour’s view was that on an intestacy, the law shall be only interfered with so far as is necessary to make adequate provision for claimants, but no further.

His Honour held that the order in the first instance made adequate provision for the Applicant and dismissed the appeal⁴.

An illegitimate child previously had no entitlement on an intestacy under common law. However, this is no longer the case following the introduction of the Family Relationship Act 1975 (SA)⁵, and illegitimate children are now considered issue. If this case were determined in South Australia now (and Ms Bridges was considered to be the Deceased’s domestic partner), the Applicant would be entitled to half of the amount of the estate that exceeds $100,000.

McLeod v Radnidge⁶ 

The Applicant, who was the foster child of the Deceased and her late husband, sought an order for provision for his maintenance out of the estate of the Deceased. The Deceased died intestate in 2006 at the age of 68 years. She was a widow at the time of her death.

The Applicant had no entitlement to the intestate estate, and the estate passed to the Deceased’s three siblings or (where deceased) their family.

The Court observed that the Applicant was raised by the Deceased and her late husband from childhood. Although not related by blood or marriage, he was treated as if he were their only son, and he also used their surname. Further, the relationship was close and loving, and no different from that of a natural son. Since 1973, the Applicant resided with the Deceased at the family property and continued to do so after the Deceased’s death.

The Applicant had not been employed since 1989 and was in receipt of a disability pension. He was indebted to the Attorney General’s Department in the sum of $45,300 for victim compensation, and had an extensive criminal record, including drug offences, offences of dishonesty and motor vehicle offences. The financial and material circumstances of the Defendant (who was one of the nine children of the Deceased’s late brother) and other persons entitled to the estate were also not affluent.

The Deceased had indicated during her lifetime that the property would pass to the Applicant on her death and had required the Applicant to provide an undertaking that the Deceased’s sister and her son could reside with him. Having said this, the Court observed that the Deceased made a deliberate decision not to leave a will.

The Defendant conceded that the Applicant was an eligible person under the NSW provision legislation in that he was partly dependent upon the Deceased and had been a member of the household of which the Deceased was a member. The Court was satisfied that the Applicant had been left without adequate provision for his proper maintenance. This was based on the Deceased’s recognition of the Applicant as her son, the Applicant’s pension, lack of assets, and debt for victim compensation. The Applicant received a legacy in sum of $100,000, which came from the proceeds of sale of the house.

The Applicant in this case is fortunate he lived in NSW, as NSW and Queensland are the only States that allow foster children to make applications for provision. Further, foster children have no entitlement to the estate on an intestacy as they are not considered issue.

Sergent v Glass (No 2)⁷

The Deceased had two children from his first marriage, Thomas and William, who were the Applicants. Thomas was 19 years old at the time of the judgment and William was 17. The Deceased separated with his first wife in 2008 and divorced in 2010. The Deceased continued to have a relationship with his children, and they spent every second weekend and some holidays with him.

The Deceased was survived by his second wife, Sandra, whom he married in 2013. Their relationship had been described as “tumultuous” and in 2014, Sandra moved to Hong Kong and did not return to Australia. In emails from 2016, Sandra indicated that she wanted a divorce, to which the Deceased agreed and left Sandra to organise. While they did not divorce, the Court remarked that there was little doubt the marriage had irretrievably broken down.

Under the NSW intestacy provisions, the whole of the estate (worth $432,560) passed to Sandra. However, despite various correspondence being sent to Sandra about the proceedings, she did not respond.

Justice Hallen considered the financial and material circumstances of each Applicant and the proposed consent orders. His Honour’s view was that the Court should regard Sandra as having virtually no competing claim on the Deceased’s bounty, given matters including the shortness of the marriage, lack of evidence of contributions made by Sandra, and the fact she did not wish to participate in the proceedings. The Applicants received provision from the estate of 50% each.

Smilek v Public Trustee⁸

The Deceased died leaving a will which gave the whole of the estate to his wife, Ms Kowinski if she survived him by 30 days. Ms Kowinski died one week before the Deceased and the will did not make provision in the event the gift failed. The Deceased therefore died intestate.

Ms Kowinski had two sons from a previous marriage who were aged 16 and 14 at the time of her marriage to the Deceased in 1972. Given the Deceased had no living relatives, the estate passed to the Crown upon an intestacy.

The Deceased and his stepsons had a close relationship, and the stepsons had made non-financial contributions to the Deceased’s welfare. On appeal, the Court held that the provision for the stepsons’ proper maintenance and advancement in life was inadequate, and ordered that provision be made out of the estate. Each of the stepsons received 50% of the residue of the estate.

It is important to note that in South Australia, the current position is that stepchildren are only entitled to make a claim for provision where they were maintained (or legally entitled to be maintained) by the Deceased immediately before death.

Coates v Public Trustee¹⁰

The Applicant was the daughter of the Deceased and his wife. The Applicant was removed from his care when she was five years old, was placed into foster care and later adopted. On an intestacy, adopted children are not entitled to the estate of their biological parents. 

The Applicant applied for provision out of the estate (worth $239,134) which passed to the Crown. The Court was satisfied that the Applicant was an eligible person as she was partly dependent on the Deceased and was part of the household for her first five years. 

The Court held that there were factors warranting the making of the application. The Applicant’s separation from the Deceased was unfortunate and forced. It was against the Deceased’s wishes, as was the Applicant’s adoption. The Court accepted that once adopted, the Applicant wished to have contact with the Deceased. 

The Applicant had modest circumstances and there were no other competing claims. The Court ordered that the Applicant receive a legacy of $200,000 out of the estate.

 

¹  Re Ross (1871) LR 13 Eq 286 at 293
²  Act, s 72H(2)
³  (1974) 8 SASR 268; (1975) 12 SASR 1
⁴  Wells J and Jacobs J agreeing
⁵  Section 6
⁶  [2009] NSWSC 1105
⁷  [2018] NSWSC 1100
⁸  [2008] NSWCA 190
⁹  IFP Act, s 6(g)
¹⁰ [2007] NSWSC 647

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