Where actions speak louder than words: testator family maintenance

By William Moore and Rebecca Dodd

Ballooning property prices and increased pressure to sustain living costs has forced many Australians to turn to the ‘bank of mum and dad’. If this financial support continues during the life of the child until a parent’s death, unintended consequences may apply to the deceased’s estate.

In Joss v Joss [2020] VSC 424, the Victorian Supreme Court held that where a testator ‘breached their moral duty to those for whom they have a responsibility, the Court has the power to override the testator’s wishes’.^[1] This view has more recently been affirmed in Christu v Christu [2021] VSC 162 and Iacono v Iacono [2021] VSC 444.

Despite the express wishes of a deceased’s Will, these cases should serve as a stark warning to any parent looking to have the last word in the distribution of their estate. This is a particular risk where ongoing financial support to a child (or other dependent) has created a dependency.

Financial dependence and a moral duty

Joss v Joss involved a claim from an adult child who was financially supported by her parents in the form of a regular allowance, as well as large one-off payments for her accommodation, debts, and other personal expenses until her father’s death.

The Court held that the existence of a ‘moral duty’, as required under Part IV of the Administration and Probate Act 1958 (Vic), was founded on the relationship of financial dependence cultivated by the child’s father (the testator), by giving in to the child’s demands and allowing her to live comfortably.^[2] This was despite the behaviour of the adult child who had a difficult relationship with her parents, and at one point even tried to kill her father.

Despite this, the Court awarded the claimant approximately one quarter of the $12.4 million estate, even though the father’s Will already provided her with a $1 million life annuity.

Iacono v Iacono similarly affirmed that while the poor conduct of a claimant may limit any moral duty owed by a testator, it will not ordinarily disqualify an eligible claimant from receiving further provision.^[3] Ultimately, the Court has a broad discretion to remedy a testator’s breach of their moral responsibility to properly provide for others (including their children).^[4]

Implications for estate challenges

These recent cases suggest that if a parent enables a relationship of financial dependence with their child until their death, created by a pattern of financial maintenance and support, the child may have grounds to challenge their parent’s estate.

Relevantly, where this dependence exists, a child of the deceased parent may consider their provision under the Will does not adequately meet their needs, or their own capacity to meet those needs. This may lead to not only the child making a claim against their parent’s estate after their death, but also fracture family relationships.