Disgruntled and vulnerable family members have long had the ability to claim against an estate under the Family Protection Act 1955 (FPA) where they have not been adequately provided for in a will. However, with the Law Commission recently publishing its review on succession law in New Zealand, there is scope for the FPA to be repealed and replaced. This will potentially have a significant impact on who can make a claim against an estate and for what reasons.
Issues with the FPA
One of the observations apparent with current FPA claims is that most claims reaching the courtroom are brought by adult children of the deceased. These claims are generally brought because the adult child seeks a cut of the estate as recognition of them being a child of the deceased, even where they are financially independent. These are claims in recognition.
Whilst claims in recognition have been slowly recognised in New Zealand courts, they are often described as forced heirship and contrary to the principle of testamentary freedom. Other claims under the FPA are generally brought for the purposes of providing a family member with a portion of the estate to provide for their necessities of life and maintenance. A stark difference may be drawn between these two types of claim; however, they are currently both brought under the same umbrella.
In response to concerns that the current regime is too broad and dependent on the discretion of the Courts, the Law Commission has proposed repealing the current FPA and replacing the legislation with more specific provisions. In its proposed changes, the Law Commission has specified four scenarios where a family member might be entitled to bring a claim against an estate:
On first inspection, it appears that the four scenarios specified above simply restate, albeit more specifically, the types of claims which are already available under the FPA today. However, the Law Commission has said that it prefers the adoption of only options one and two above; that a claim against an estate should only be available for children of the deceased under a set age, and for surviving partners.
The Law Commission does not favour options three and four and has expressed specific reservations on the ability for claims in recognition.
The Law Commission has noted that incorporating options one and two above would provide more certainty and predictability in the law and would likely reduce the amount of litigation in this area. Whilst the review has mentioned that options three and four may be adopted in addition to the first and second options, it thinks that option four will do little to address the issues surrounding the types of claims brought under the FPA today.
With the Law Commission expressing these reservations it seems likely that claims in recognition will not be forming a large part of (if any) the proposed new legislation.
What does this mean for FPA claims? Currently, the law remains unchanged. However, with the Law Commission presenting issues with the current regime and concerns around recognition awards, it may be that adult children will no longer be able to claim against an estate solely for recognition in the new legislation. However, with the Law Commission’s report still in its early stages, and the final report not being due until the end of 2021, it is likely that any reform to the FPA is far on the horizon.
What do you think of these proposed changes? The Law Commission is calling for submissions on its proposals for reform by 10 June 2021.
Please don't hesitate to get in touch with a member of the team.