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Law Reform in South Australia: Succession Act 2023 (SA)

Introduction

The Succession Act 2023, assented on 28 September 2023, makes significant reforms to South Australia’s succession laws. When it comes into effect – on a date yet to be set – it will repeal three Acts (the Administration and Probate Act 1919 (SA), the Inheritance (Family Provision) Act 1972 (SA) and the Wills Act 1936 (SA)) and amend several others that overlap with this area of law. 

The Succession Act 2023 (SA) has brought about significant changes and reforms to succession laws in South Australia. This comprehensive legislation aims to modernise and streamline the process of managing and distributing assets upon a person’s death. 

Given these are the most significant changes to South Australia’s succession laws since the early 1970s when the Inheritance (Family Provision) Act 1972 (SA) came into effect, it is important to be aware of what these upcoming reforms will look like.

These changes have important implications for South Australian residents and their families, as well as legal professionals working in the field of estates and trusts.

Image of Last Will and Testament Document for Succession Act 2023 (SA)

Entitlement to Inspect the Will of a Deceased Person

Image of couple inspecting Last Will and Testament documentDefined classes of people will now be given the express right to inspect a copy of a deceased person’s will before a Grant of Probate is made, including:

  • Any person named or referred to in the Will (regardless of whether they are a beneficiary or otherwise);
  • Any person named as a beneficiary in an earlier Will of the deceased person;
  • A surviving spouse, domestic partner, child or step-child of the deceased;
  • A former spouse or domestic partner of the deceased person;
  • A parent or guardian of the deceased person;
  • A person who would be entitled to share in the estate of the deceased on intestacy;
  • A parent or guardian of a minor referred to in the deceased’s Will or who would be entitled to a share of the deceased’s estate if they died intestate;
  • A person committed with the management of the deceased’s estate under an administration Order immediately before the death of the deceased person; and
  • Any other party who has a claim against the estate (at law or in equity), so long as they can demonstrate a ‘proper interest in the matter’ and inspection of the Will is “appropriate in the circumstances”.

This provision brings South Australia in line with other jurisdictions in Australia, ensuring transparency and fairness in the distribution of assets.

Remedy for Executor/Administrator Failure

Image of judge's gavelNew section 98 of the Act is in some ways a coordination of causes of action and remedies available at common law. However, it creates a clear statutory pathway for aggrieved beneficiaries to issue proceedings against an executor if they believe that the executor has failed to perform any duties or comply with any undertaking or direction of the Court. This is given context by new section 81, which sets out (in very general terms) the duties of an executor.

The Court may make any or all of the following orders:

  • requiring the executor/administrator to pay into the estate an amount equivalent to any financial benefit the executor/administrator as obtained (directly or directly) by their failure;
  • requiring the executor/administrator to compensate any person who has suffered loss or damage; or
  • any other order appropriate to compensate persons who have suffered loss or damage as a result of the failure of the executor/administrator.

However, it is important to consider the potential challenges that may arise, such as the strict three-year timeframe for seeking such orders.

Distribution of Intestate Estates According to Court-Approved Agreements

Section 111 introduces an entirely new concept, which allows the Court to approve an agreement for the distribution or “redistribution” of an intestate estate (or part of one), in a manner other than to those family members or relatives specified by Division 3 of the Act.

Previously, this result could only be achieved either by contractual agreement, or by an order made under the Inheritance (Family Provision) Act 1972 (SA). The problem with the former was enforceability (requiring a separate set of proceedings) and stamp duty implications in transferring dutiable property. The latter required potentially expensive and unnecessary proceedings (if all parties were in agreement). Section 111 has sought to remove some of those obstacles by creating a new process.

Procedurally, the section requires:

  • the application to be made by the administrator of the intestate estate;
  • all persons who are entitled to share in the distribution of the intestate estate (or part of the intestate estate) must be parties to the agreement, and have notice of the application;
  • the Court to be satisfied that the terms of the agreement are, in all the circumstances, “just”.

Satisfying the Court of those matters will no doubt require that all interested persons who are not **sui juris are separately represented, and that the agreement is recommended as being in their interests.

** The meaning of the term sui juris means of full age and not under disability; legally competent to manage one’s own affairs; independent (Source: Collins Dictionary)

It is also noteworthy that an agreement can provide for the distribution of an intestate to persons who are not blood relatives of the intestate (step-children for instance).

Succession Act 2023 (SA) Family Provision

Family Provision claims

Part 6 of the Succession Act 2023 addresses family provision claims. The Succession Act 2023 adds to and then further qualifies the categories of persons who would be eligible to make a family provision claim. Family provision claims are sometimes referred to as “inheritance” claims as they can usually be made by people who have a relationship of some kind to or with the deceased.

Eligibility to make a family provision claim

Former spouses or domestic partners of the deceased who have a property settlement agreement or Order of a prescribed kind, are excluded from making a claim. An agreement or Order of a prescribed kind is yet to be clarified, but it is likely to include a formal property settlement made under the Commonwealth Family Law Act 1975 or Domestic Partners Property Act 1996 (SA).

Where previously, step-children were only eligible to make a claim if they were, or were entitled to be, maintained wholly or partly by the deceased, this has been expanded to provide eligibility if the step-child satisfies any of the following:

  • The step-child is disabled and significantly vulnerable as a result;
  • The step-child was dependent on the deceased at the time of death;
  • The step-child cared for or contributed to the maintenance of the deceased immediately before death;
  • The step-child substantially contributed to the estate of the deceased; or
  • Assets accumulated by a parent of the step-child substantially contributed to the estate of the deceased.

 

Grandchildren will only be eligible if their parent (the child of the deceased) dies before the deceased, or if the grandchild was, or was entitled to be, maintained by the deceased immediately before the death.

Where before, a parent needed only to demonstrate they had cared for or maintained the deceased during their lifetime, eligibility is now limited to parents who cared for or maintained the deceased immediately before the death (or before they entered a residential facility), or parents who were maintained wholly or partly by the deceased immediately before the death.

Siblings will face a similar requirement. That is, they will need to demonstrate that they cared for or maintained the deceased immediately before the death (or before the deceased entered a residential facility).

Wishes of the Deceased are the "Primary Consideration"

The Succession Act 2023 now requires the Court to place the wishes of the deceased as the primary consideration when determining whether to make a family provision order (section 116(2)).

In other Australian states, similar legislation provides that the Courts may have regard to the reasons of the deceased for disposing of their estate in the way they have. The exception to this is Victoria where the Court must have regard to the terms of the deceased’s Will and any evidence of the reasons for disposing of their estate in the way they have.

The relevant section of the Succession Act 2023 provides a list of factors the Court must consider, including:

  • any evidence of the deceased person’s reasons for making the dispositions in their Will; and
  • in relation to the applicant for a family provision order:
    • the applicant’s vulnerability and dependence on the deceased;
    • the applicant’s contribution to the estate of the deceased; and
    • the character and conduct of the applicant.

Security for Costs in Family Provision Claims

Section 117 of the Act now authorises the Court to order that a party to family provision proceeding provide security for costs.  An order may be made where a party’s claim for family provision is “without merit” or they are “unwilling to negotiate a settlement of a claim for provision”. This amendment is intended to “discourage unmeritorious claims”.

An order for security for costs can already be sought in civil proceedings in South Australia under the Uniform Civil Rules 2020 (SA). However, in practice this is rarely, if ever, sought for family provision claims. Section 117 of the Act may be an attractive option for respondents seeking to protect themselves against weak or vexatious family provision claims, though it remains to be seen whether the Court will treat this provision any differently than the existing powers. It may be expected that the Court will be reluctant to exercise this power, except perhaps in cases involving small estates and blatantly unmeritorious claims.

Interestingly, a specific provision to make orders for security for costs in family provision claims does not appear to exist in any of the equivalent Acts throughout Australia.

Succession Act 2023 (SA) Law Reforms Conclusion

The Succession Act 2023 (SA) brings significant reforms to succession laws in South Australia. These changes reflect the evolving landscape of estate planning and administration, aiming to provide greater clarity, fairness, and efficiency in the distribution of assets upon a person’s death.

It is important for individuals, families, and legal professionals to familiarise themselves with these amendments, ensuring compliance and effective estate planning in South Australia. Monitoring the implementation and impact of the Act will be crucial in assessing its effectiveness and making any necessary adjustments in the future.

How FBA Can Help You With Your Estate Planning

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