This article is a part of our series discussing Family Provisions Claims, and focusses on claims by step-children. For a broader understanding of Family Provision Claims in Victoria, click here to read our previous article.
“The time when stepchildren should be considered to have a far inferior claim to the natural child of a testator has well passed” ruled Associate Justice Melissa Daly earlier this year.
Under the Administration and Probate Act 1958, a stepchild is an ‘eligible person’ to make a family provision claim against their stepparent’s estate, seeking adequate provision for their proper maintenance and support.
Who is a ‘step-child’?
Whilst the legislation does not define who is a ‘step-child’ for the purposes of Family Provision Claims, the case law has interpreted a step-child to include a child of a spouse or a domestic partner.
Further, the case law has indicated that this step-relationship continues after the death of the natural parent and is only severed when the relationship between the step-parent and the natural parent ends by separation (in the case of a domestic partnership) or divorce (in the case of a marriage).
Treatment of step-children claims
Claims by step-children are typically made when their natural parent has already died and often involve an argument that the step-child ‘stood aside’ to some degree and allowed their step-parent to inherit assets from the natural parent’s estate. But this is not the only instance in which a claim can be made.
Historically, claims by step-children have been less successful than claims by natural children, and the courts have expressed caution when looking at such claims, particularly where the relationship between the step-parent and the step-child becomes acrimonious or non-existent after the natural parent dies.
However, a recent decision of the Victorian Supreme Court may represent a changing of the tide.
James v Rost; Langan v Rost [2022] VSC 98
This case involved a claim by a step-son and a step-daughter of the deceased.
In 1965 Vera married Jack and they remained married until Jack’s death in 2006 at the age of 83. Vera had a daughter, Michaela, from a previous relationship and Michaela had a son, Saery. Jack also had two children, Marianne and Bernard, from a previous relationship.
Bernard was 14 years old when Vera and Jack married. Bernard lived with Vera and Jack for a few years after they were married, before leaving home at the age of 19 years to study. Bernard was married and had modest assets including his home, a small amount in a bank account and superannuation of about $143,000. He relied on expert evidence from a financial advisor in order to substantiate his claim for a legacy of $150,000.
Marianne was around 18 years old when Vera and Jack married. She never lived with Vera and Jack. Although there were some years she didn’t have a close relationship with Vera, she kept in touch by telephone and visited Vera and Jack from time to time, sometimes staying with them for a number of days at a time.
Marianne was married and had modest assets including her home, a small amount in a bank account and some shares. Marianne’s husband was paralysed from the neck down and received funds pursuant to an NDIS plan.
It was recognised that Michaela and Saery were in greater financial need than Bernard and Marianne. Michaela (now 70 years of age) had a low income and nearly no assets. Saery (now 40 years of age) had no assets, a low income and a chequered employment history. Michaela maintained that her mother Vera did not owe a moral duty to Bernard and Marianne.
The chief asset of Vera’s estate was the Avondale Heights property valued at $920,000. Initially, Vera purchased the first home that she and Jack lived in from 1963. She transferred this into their joint names after Jack’s retirement and the discharge of the mortgage.
In a number of prior Wills made before Jack’s death, Vera had left Marianne and Bernard a half share in the property. For Associate Justice Daly, this was an indication that Vera considered she owed a moral duty to provide for Marianne and Bernard in her Will, even though she did not wish to do so.
The Decision
The critical issue in this proceeding was whether Vera owed the claimants, Marianne and Bernard, a moral duty to make provision for them.
The Court held that the deceased did owe a moral duty to the claimants, because:
- when their father Jack died, his own wealth passed to Vera, rather than to his children;
- they had held off making a claim against their father’s estate when he died, when they would have been able to do so; and
- each of Marianne and Bernard were in some financial need, with no or limited capacity to improve their financial position.
In the words of Associate Justice Daly, “they should be, all other things equal…, entitled to Jack’s half share of the property (had he lived), or at least a substantial portion of Jack’s notional shares of the property”.
Her Honour also held that a further reason for “imposing a moral duty upon a testator in favour of step-children in certain circumstances is that, in many such cases, the step-children have on occasion of the death of their natural parent stepped aside in order to protect the resources of the surviving spouse…”.
By stepping back and allowing their father’s estate to pass to their step-mother Vera over 20 years ago, Marianne and Bernard had effectively made a material contribution to Vera’s resources, which warranted recognition in the distribution of Vera’s estate.
Bernard’s financial position was described as “modestly comfortable rather than affluent, with there being some scope to generate further income…, but not necessarily a substantial income”. The Court awarded him $65,000.
Marianne was in greater financial need than Bernard, as she had no superannuation or significant assets other than her home. She also had greater health issues and the responsibility of caring for her husband, which limited her ability to provide for herself. She was awarded $105,000.
Key Takeaways
While Vera clearly wished to benefit Michaela and Saery, and there was no question that they each had significant financial need, neither of these factors was enough to extinguish the moral obligation that she owed to Marianne and Bernard.
There is no question that blended families are becoming more common. It is therefore important to recognise when someone may have a moral obligation to provide for their step-children, and that this may not be immediately obvious.
Less than 20 years ago, the Court considered it “novel” to suggest that a step-parent has an obligation to provide for a stepchild.
With James v Rost, perhaps it can be said that this novelty has well and truly worn off.
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