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Millions won and lost in Estate ligitation

In estate litigation the New Zealand courts hand out millions of dollars every year.

It is becoming common for large families to become divided and head to court when a leading family member passes away.

On the one hand, somebody may want their wealth to pass to a specific person, perhaps in recognition for services during their lifetime.  On the other hand, the law is clear that there is a duty to provide for family members, and those who are set to not receive anything may feel unfairly treated.  Because of the personality of the family member, others may be afraid to challenge those understandings. This means that while the person is alive there may seem to be no problems, but when the person passes away, the gloves can come off.

One example from the New Zealand Courts illustrates the problems.  Kirby v Sims dealt with the estates of a late farming husband and wife.  The couple had built up their farming interests and when the wife passed away there was over $3,000,000.00 of assets.  The wife had not left “sufficient” legacies to three children.  The Court ordered $750,000.00 to be paid to one daughter, $600,000.00 to one son, and $350,000.00 (Australian dollars) to another son.  Because those three children had ‘won’ the other family members who opposed them was also ordered to make a payment for legal fees (each also received over $50,000.00 in costs). 

The family members who ‘lost’ in the High Court then appealed to the Court of Appeal (Fisher v Kirby). They asked the Court to reduce the amounts paid to the claimants. And they challenged the costs award. The son who received AUD$350,000.00 also asked the court to increase his share.

The Court of appeal refused to change the awards paid to the New Zealand children, but did agree to increase the award to the third son from AUD$350,000.00 to AUD$500,000.00. In terms of costs one ‘winner’ had their costs award reduced to $35,000.00, due to certain aggressive arguments taken in evidence (of course, he kept over $600,000.00 in damages).

So, after all the legal costs and two long Court cases, the family members the deceased couple wanted to help (nephews and nieces) were left with much less, and had also had the significant cost of two court cases. While they were not out of pocket, they received far less than the deceased had wanted.

These types of family battles which develop through the Courts are extremely costly and difficult for all involved.  The emotional cost some have said is the hardest to bear.  If one family member has a “big win”, with the others losing out, the family unit can break down and potentially never recover.

There are two lessons to learn from this.

First, if your parent (or grandparent) has given everything to certain family members, and left you with nothing or very little, you can probably change that.  The Courts recognise that you have a right to be provided for and recognised as a member of the family.  Exactly what you could receive from the courts will depend on many circumstances. Every case is different. You need to discuss this with your lawyer as soon as possible because there are time limits on when you can claim.  

Second, it is important to take advice when preparing your will, so that – as far as possible – your wishes are achieved. You should take the time to carefully plan your estate matters, and discuss proposals with your lawyer.  He or she will be able to advise you on whether a proposed legacy can be considered fair, or if further provision is necessary to avoid Court. Sometimes making a payment to a family member may be frustrating, but in the long run may end up saving a fortune. You may not be around to see the savings made by your family as a result, but there is no doubt they will greatly benefit.

  • Posted By: Graham Day on Fri, 21st Jun 2019 @ 08:08:58

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