A Family Provision claim in New South Wales is an application to the Supreme Court for a portion, or larger portion, from the estate of a deceased person. If you wish to protect your estate from being claimed by another person, you may wish to engage them in a deed of release. Under the New South Wales succession laws, a person who may otherwise have a right to bring a Family Provision claim can agree to release those rights, via a deed of release, subject to the approval of the court.
A Deed of Release will seek that a person releases their rights to bring a Family Provision claim against the deceased estate. This means that they would be engaging in a legally binding agreement which prohibits them from laying claim to a portion of the estate of the deceased person. In order to do so, an application would need to be made to the New South Wales Supreme Court to obtain the court’s approval to the release. A deed of release is not binding unless it is approved by the court.
In Ernst v Mowbray (2004), the Supreme Court held that the parties knew that Court approval was necessary in creating a binding agreement prohibiting a claim on the estate, and that without this approval, the agreement was a ‘statement of intention’ rather than a binding legal document. Similarly, in Mulcahly v Weldon, an ex-wife made a family provision claim on the basis of an agreement made upon the divorce of the ex-wife and deceased ex-husband, which stated that “Each party covenants to execute a Deed of Release of any claim against the other under the Family Provision Act, if requested to do so by the other party.” Furthermore, Singer v Berghouse (1994) and Neil v Jacovou (2011) demonstrate that release agreements contained in pre-nuptial agreements will only be binding if they were approved by the court, and if independent legal advice was provided for both parties. Singer v Berghouse also demonstrates, however, that the court will take into account the intentions of the parties at the time the agreement was made.
In determining whether to approve a release of rights, the court will take into consideration multiple factors, including whether:
(a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and
(b) it is or was, at that time, prudent for the releasing party to make the release, and
(c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and
(d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.
Additionally, under the Succession Act (2006) (NSW) if you release your rights to bring a Family Provision claim against your partner’s estate (via a deed of release), and they die while you are still married, you will not be able to bring a claim against their estate. Additionally, a divorced person will not have the ability to bring a Family Provision Claim against their former partner’s estate. Both a court-approved deed of release, or a finalised divorce, are effective ways of preventing your partner from claiming your estate. Both avenues are effective and enforceable under NSW legislation post-death.
A deed of release is a formal document outlining the agreement between parties to settle a dispute. Before drafting or signing a deed of release, you should seek legal advice.
If you require further assistance on this topic, please contact one of our family lawyers on 1300 749 709.
To learn more in relation to this topic please click on the link for the Federal Circuit and Family Court of Australia https://www.fcfcoa.gov.au/fl/fp/party-death