BACKGROUND ON COMPETING INTERESTS: THE CASE OF FENTON-ANDERSON & ANOR V POWER & ANOR
Fenton-Anderson & Anor v Power & Anor ('Fenton- Anderson') is a recent District Court of Queensland case which gives a useful overview of how competing interests in a deceased estate are determined.
In Fenton-Anderson, Mr Fenton died in February 2018 and his ex-wife Mrs Fenton was the primary beneficiary under his will. Mr Fenton's primary asset under the estate was his farming property (the 'Property') estimated to be worth at least $1 million. Mrs Fenton was effectively left all of Mr Fenton's personal estate, including the right to reside for life at the Property on the condition she maintained the Property.
Mr Fenton's daughters, Ms Fenton-Anderson and Ms Fenton-Leslie benefitted modestly under the will, and importantly only benefitted if the conditions arose for the sale of the Property. Consequently, by originating application filed November 2018, the daughters applied for further provision from the estate of their father pursuant to the Succession Act 1981 (Qld).
The core issues in Fenton-Anderson were:
- The nature of Mr Fenton's relationship with Mrs Fenton in his final years, considering they were divorced but continued to reside with one another for a period of time;
- The daughters' conduct in the last few weeks of Mr Fenton's life, and his efforts to amend the will in his last few weeks of life so as to favour the daughters; and
- The capacity of Mrs Fenton to continue to maintain the Property in accordance with the terms of the will.
COMPETING INTERESTS: FAMILY PROVISION APPLICATIONS
As is the case in Fenton-Anderson, estates are often contested among the family of the deceased. A spouse, child or dependant of a deceased person may claim they are entitled to funds from the estate arising from their relationship or dependency on the deceased individual.
Under the Succession Act 1981 (Qld), 'eligible persons' are entitled to apply to the court for adequate provision to be made for their proper maintenance and support from a deceased estate. This is referred to as a 'Family Provision Application' ('FPA').
Notwithstanding the contents of the deceased individual's will, by way of an FPA, the court has the ability to order that 'eligible persons' be provided with further provision from a deceased estate.
In determining whether an applicant ought to receive further provision from the estate, the court will apply the following two stage test:
(a) whether inadequate provision has been made for the applicant's proper maintenance, education and advancement in life under the deceased's will or the intestacy rules; and
(b) if the provision is inadequate, what (if any) provision should be made to the applicant out of the estate.
DECISION OF THE DISTRICT COURT
In Fenton-Anderson, Justice Porter favoured the daughters' application. His Honour determined that although Mr and Mrs Fenton lived under the same roof for many years following their divorce, Mrs Fenton was not a de facto spouse and therefore had no competing claim for an FPA. However, Mr Fenton did continue to permit Mrs Fenton to live at the Property for many years, creating some obligation to her in the process.
Additionally, it was determined that Mr Fenton's intent to favour his daughters in his will in the last few weeks of his life was genuine and not as a result of undue influence.
Importantly, His Honour highlighted that the Property was only to be granted to Mrs Fenton on the condition that she would maintain the farming Property. It was concluded that Mrs Fenton did not have the capacity to do so.
The District Court ordered further provision be made for:
- Ms Fenton-Leslie in the amount of $175,000 inclusive of costs; and
- Ms Fenton-Anderson of $125,000 inclusive of costs.
His Honour predicted it would be necessary for the Property to be sold to accommodate these costs. It was estimated that Mrs Fenton would be left with a rough capital sum of $350,000 (the balance of the estate).
Fenton-Anderson provides further clarity on how the courts will determine competing interests in deceased estates and gives particular guidance upon de facto relationships (for the purposes of making an FPA claim).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.