We often talk about testamentary freedom – the freedom to distribute our assets in our Will as we choose.  While we would like to think that we have complete freedom, we don’t.  Testamentary freedom is limited by statute, the main ones being the Property (Relationships) Act 1976, the Law Reform (Testamentary Promises) Act 1949 and the Family Protection Act 1955.

This article focuses on the Family Protection Act.

A Will-maker has an obligation to make adequate provision from their estate for the “proper maintenance and support” of certain people.  The most obvious are the Will-maker’s children.    If a Will-maker leaves nothing to a child in their Will then it is likely the Court will decide the Will-maker has breached their ‘moral obligation’ to that child.  A parent’s moral duty will be reduced where they are estranged from a child, but estrangement will seldom remove the moral duty altogether.

What provision must a Will-maker make for a child to avoid breaching their moral duty?  There is no easy answer.  There is no presumption that children will inherit equally from their parent, nor is there a need to be fair to them.  Where there has been a breach of moral duty, the Court will do no more than the minimum necessary to redress the breach.  In doing so the Court will look very carefully at the particular facts of the case.  The Court tends to look at a person’s need to be recognised as a family member and their financial needs.

Where there has been a breach, the Courts prefer to award a specific amount to the person, but the cases show that it is fairly common to make awards on a percentage basis of the deceased’s estate.  On the family recognition basis alone, the Courts tend to award between 10%-20% of the estate as a remedy.  If a child has been very poorly treated by a parent, the Court may award a more generous sum on the family recognition basis.

Additionally, the Court will assess the child’s financial needs and will adjust the award accordingly.

In the Ormesby case the mother gave her son the family farm worth about $2,330,000.00 and then her residual estate worth $235,152.00 was divided equally between the son and two daughters.  The net effect was that the son received 93.5% of the estate and the daughters received 3.2% each.  The Family Court decided the mother breached her moral duty and awarded each child an equal share of the entire estate.  This decision was appealed to the High Court which acknowledged that the mother was entitled to make unequal distributions to her children.  The Court looked at the children’s upbringing and recognised the extremely poor treatment the daughters had received during their childhood.  All three children had similar financial needs.  The Court reduced the son’s 93.5% of the estate to 45%, one daughter received 30% and the other daughter received 25%.

In conclusion, a Will-maker’s testamentary freedom is not absolute.  A Will-maker does not have to leave their estate equally to their children, they can treat their children differently, but if a child is left out of a Will completely then they can expect their Will to be challenged.