A person fortunate enough to amass some worldly possessions has the testamentary freedom to bequeath their assets in their will as they see fit (to family, friends and even charities). This freedom is subject to the will maker having the mental capacity to sign the will, being free from external influences and, ideally, having considered the moral claims certain family members may have to the estate.
Estate law is an area where the law intersects with the realities of life, including illness, aging, diminished mental capacity and family dynamics. Conflicts can arise and families can be drawn into litigation even if the deceased disposed of their assets as they wished, and more so where capacity or free will have been impaired. This article discusses some of the most common legal claims in estate law.
Testamentary capacity
A will is valid only if the will maker understood the nature and effect of the instructions they gave and the document they signed. There is extensive case law addressing situations where will makers lacked the necessary capacity to execute a will, resulting in those wills being found invalid. If the will is declared invalid, any prior would become operative. If the will maker does not have an earlier will, the intestacy rules apply. The outcome of cases where capacity is challenged will depend heavily on the specific facts and the medical evidence presented.
In the recent decision Lane v Li1, the will maker made a new will four weeks before he died. The new will adjusted the division of his property, disinherited two out of his six children, and added provisions for two new individuals. Medical notes described him as agitated, confused and delirious. A video recording taken of the will being written and signed showed him drowsy and at times unintelligible. Two doctors made conflicting assessments on whether he had the necessary capacity to make a will. After taking into account the medical notes and the video evidence, the Court found that he did not have capacity.
While Lane v Li is a case where there was contemporaneous evidence of the will signing, other cases are more nuanced. In Loosely v Powell2 the evidence was largely circumstantial. The witness testimony, medical evidence, the type of prescription medication used and irrational changes to the will six days before the will maker died led the Court to conclude that the will maker did not have testamentary capacity. Capacity had not been assessed at the time the will was signed, and the Court could not find clear evidence to assess capacity retrospectively.
Undue influence and duress
Newspapers love a good headline: "Millionaire leaves his entire estate to his nurse/hairdresser/gardener/estranged ex-wife". Eye-catching news aside, in some of these situations, the will maker may have been subjected to undue influence or duress which could render the will invalid.
Duress and undue influence are distinctly separate concepts. A will is made under duress when a third party has in some way coerced or applied pressure to the will maker, by making threats or applying economic pressure. Duress cases will be rare. More commonly, a will maker will be subject to undue influence. Undue influence arises if the free will of the will maker is overborne even though no force is used or threatened. Persuasion, appeals to affection or family ties, or "pity for future destitution" will not usually be sufficient to amount to undue influence.3
In Lane v Li, video evidence showed that the beneficiaries who stood to gain the most were in the room when the will was being drafted and some even took an active role in instructing the lawyer and making suggestions to the will maker. At points, one of the named beneficiaries and the lawyer conversed in another language about the will and did not translate these conversations to the will maker. There was also clear evidence of past manipulation from that particular beneficiary, who was not named in the first will, but was gifted $500,000 in the revised will. Her son, who was present during drafting, was also included in the revised will. This resulted in a document which was clearly "not the product of Frank's free will".
De Rooy v Coleman4 illustrates a more subtle example where the Court found that the will maker was subject to undue influence when he executed his new will. Undue influence was not immediately obvious, but on a careful analysis of the facts it was found that, after falling ill, the will maker became completely dependent on his former partner and was "incapable of opposing" her. The Court found that this influence was used to procure his new will, which was drafted to the benefit of the former partner.
In Green v Green5, the Court of Appeal commented that the essence of undue influence in New Zealand is the impairment of free will and does not require wrongful or improper intent. In that case, the will maker was subject to undue influence when deciding to remove his daughter as executor of the estate, even though he had testamentary capacity. In addition, the irregular presence of a lawyer who was meant to be advising the will maker was in fact facilitating the undue influence by the will maker's son rather than neutralising it.
In summary, a will may be set aside for undue influence where the will maker's free will is impaired, regardless of whether the influence is overt or subtle, and even if there is no wrongful or improper intent.
Family Protection Act claims
The most common challenge to an estate is through a claim under the Family Protection Act 1955 (FPA). The FPA allows spouses, partners and children to make a claim against an estate where the will maker has not adequately provided for their proper maintenance or support in accordance with the moral duty owed. The court can make further provision for the claimant out of the estate to repair the testator's breach of moral duty but will not rewrite the will entirely in accordance with what the court thinks is "fair". A court's award under the FPA is discretionary but the court will consider several factors, including the size of the estate, the nature of competing claims, the contributions made to the estate and the claimant's financial means. The courts have refrained from giving guidance as to the appropriate percentage a claimant should receive out of the estate in the event of a breach of moral duty.
There is a wealth of cases where spouses and adult children have challenged provisions made for them in a will (or lack thereof). Many more cases settle privately, as litigation under the FPA can be both uneconomic and unattractive. Family litigation brings out the family's "dirty laundry" before the court, and some would rather settle, if only to avoid dragging up unpleasant memories.
In the leading decision Williams v Aucutt6, the testator split his estate between his two daughters in a proportion of 95/5 on the reasoning that one daughter was financially stable and the other had greater financial need. The Court increased the 5% share to 10%, on the grounds that providing support goes beyond maintenance and can include sustaining and providing comfort. Fundamentally, the Court determined that the sister's place in the family and her relationship with the deceased needed to be recognised.
In Ormsby v Van Selm7, the main asset of the estate was a farm, which was left to the son. The two daughters of the deceased received the residue of the estate, which amounted to 3.2% of the estate for each of them. The High Court, on appeal, allocated 30% of the estate to one sister to reflect her present economic need and 25% to the other sister.
In its current state, the FPA can be circumvented by forward thinking testators who wish to disinherit a potential claimant. The recent decision of A, B and C v D and E Limited as Trustees of the Z Trust8 for example, left the adult children without a remedy. The testator, who was by all accounts a very abusive father, placed most of his assets into a trust before his death and did not name his three children as beneficiaries of that trust. The adult children could not bring a claim under the FPA in relation to the transfer of assets, and the estate itself had minimal assets. The children argued the father had a fiduciary duty towards them that continued into adulthood as a result of the abuse sustained at the hands of the father. The Supreme Court, while sympathetic to the appellants, found that the fiduciary duty the father owed to his children did not extend into adulthood, the assets held in the trust were not part of the estate, and the FPA could not change that outcome. The Court acknowledged the gap in the law which left the children without a remedy for what would otherwise have been a breach of moral duty.
The future of the FPA
The FPA has been criticised as out of touch with the reality of modern society and the changes to family structures since the 1950s. While the current legislation and the weight of case law tends to favour claims by adult children for maintenance and support, there is on-going societal debate as to how much assistance adult children should receive from their parents' estates, and whether the FPA remains relevant in modern society. The Law Commission recommended changes to the FPA in 2019 which would allow surviving partners to make a claim where they lack the ability to maintain "a reasonable independent standard of living", considering any financial disadvantages that arose out of the relationship. In terms of the moral duty owed to adult children, public consultation revealed strong conflicting opinions as to whether adult children who are not disabled and who are over 25 years old should be able to make a claim against an estate at all.
To address the potential injustice of an FPA claim being defeated through the transfer of assets to a trust, the Law Commission recommended that the courts be granted the power to recover property for the purposes of satisfying a claim against an estate in some circumstances.
In 2022, the Government responded to the Law Commission's recommendations on succession law reform, agreeing in principle that reform is needed and directing the Ministry of Justice to consider the Commission's findings and undertake further policy work. The Government acknowledged that implementing changes would be a significant undertaking that would take considerable time. However, recently, a spokesperson for the Minister of Justice confirmed that succession law reform is not currently part of the Government's work programme.
Until reform occurs, families need to navigate the current framework. Open conversations with family members and intentional estate planning are key to avoiding subsequent family litigation.
Co-authored by Calina Tataru (Senior Associate) and Hugo Young (Law Clerk) with the assistance of Sam Davey (Summer Clerk).
1[2024] NZHC 3663
2[2018] 2 NZLR 618
3Hall v Hall (1868) LR 1 P&D 481
4[2025] NZHC 3444
5[2017] 2 NZLR 321
6[2000] 2 NZLR 479
7[2016] NZCA 323
8[2024] NZFLR 281 also referred to as "the Alphabet case".
