Costs in Family Provision
The costs of contesting a will in family provision are generally paid out of the estate, particularly where an applicant is successful. However, the outcome of the case can affect the costs order which the court sees fit to make, consequently, particularly in cases where the applicant is unsuccessful, the costs will not necessarily be paid out of the estate.
The following cases provide an example of the range of costs orders which may be made in cases where the applicant is unsuccessful, demonstrating that the orders made will vary depending on the circumstances of the case.
The applicant applied for a family provision claim from her mother's $298,000 estate which had passed entirely to the applicant's sister, save for a $34,000 left to the applicant. However, the applicant's claim was unsuccessful and the court concluded that given the small size of the estate and the sister's financial needs, the applicant had failed to establish that she had not received adequate provision.
- The legal costs of both parties accounted for a significant portion of the estate, totalling $108,285;
- The applicant had rejected multiple settlement offers more favourable than the outcome; and
- The applicant's persistence with her family provision claim had been unreasonable, given the modest size of the estate and the poor financial circumstances of the defendant.
The court determined that it was appropriate that costs should follow the event. Therefore, the applicant was required to pay both her costs and the defendant's costs.
The applicant made an applicant for family provision out of his father's $10 million estate. Under the will, the applicant and his sister had received $1.5 million legacies, while the remainder of the estate passed to the deceased's wife. However, given that the deceased had provided the applicant with substantial financial support during his life and that the applicant had stable - although modest - financial circumstances, his claim was dismissed.
- The legal costs could be easily absorbed by the estate given the significant size of the estate; and
- An adverse costs order would have had a detrimental effect on the applicant, given his modest financial circumstances.
The court held that both the applicant's and the defendant's costs should be paid out of the estate.
The applicant applied for family provision out of his father's estate. The applicant had had little contact with his father, following the separation of his parents when he was nine months old. Under the deceased's will the entirely of his $265,000 estate passed to his second wife, or their children in the event she predeceased him. The applicant's claim was dismissed as the court concluded that he had significantly greater financial circumstances than the deceased's widow and her children.
- If the costs were paid out of the estate, the estate would be reduced to merely $140,000;
- The applicant had given no regard to the principle of proportionality and had incurred excessive legal costs; however,
- The defendant's costs could be better absorbed by the estate than afforded by the applicant.
The court declined to make any order as to costs, meaning that each party was responsible for bearing their own costs.
DISCLAIMER: The information provided above is published for general informational purposes only and is not intended to be nor should it be relied upon as a substitute for legal or other advice.