Common Types of Contentious Probate & Estate Disputes Over a Will or Trust

Introduction

Probate disputes are legal disagreements that arise over a deceased person’s estate. These conflicts can involve everything from challenges to a will’s validity to conflicts over how an executor has managed assets. For a beneficiary, executor, or family member involved in an estate conflict, understanding the specific type of dispute with the guidance of experienced estate conflict lawyers is the first step toward resolving it.

This article outlines the main categories of contentious probate, including will validity challenges based on a lack of mental capacity or undue influence. It also covers family provision claims, executor misconduct, and trust disputes to help individuals identify which legal grounds may apply to their situation.

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Common Types of Will Validity Challenges for Individuals in Australia

Lack of Testamentary Capacity & Mental Illness

A will can be invalidated if the person who made it, known as the testator, lacked the required mental capacity at the time of signing. For a will to be valid, the testator must have understood the decisions they were making. 

Simply being unhappy with a will is not enough to have it overturned; specific evidence must prove a lack of capacity. A testator is considered to have the necessary mental capacity if they meet three key conditions:

• They understood they were making a will and the effect it would have.
• They were aware of the nature and general value of their estate, such as properties, bank accounts, and other assets.
• They could appreciate the people who might have a claim on their estate and were able to evaluate those claims.

Even if a testator has been diagnosed with an illness that affects their mental state, it does not automatically mean they lack the capacity to make a will. However, certain factors can be indicators of a lack of mental capacity, including:

• Memory loss that affects decision-making ability.
• Delusions that distort the testator’s perception of reality.
• An inability to perform daily tasks independently.

Undue Influence & Duress During Will Creation

A will may be declared invalid if it was created under undue influence or duress, which compromises the testator’s ability to make independent and voluntary choices about their estate. 

Undue influence typically occurs when an intended beneficiary uses unlawful pressure to get the testator to submit to their wishes. This often happens in relationships where there is a high degree of trust and dependence, such as with close relatives or trusted advisors.

Duress is a related ground for challenging a will and involves external pressure being applied to the testator. This can include:

• Harassment or threats of violence.
• Damage to property.
• The withdrawal of care or support to coerce the testator into making a will on certain terms.

Courts only recognise duress in exceptional circumstances where there is clear evidence of coercive tactics.

Unexplained changes to a will, such as suddenly modifying the distribution of the estate to favour one person, may suggest third-party involvement. For example, if a testator changes their will in their final months to leave their entire estate to a single child or a carer, it could raise suspicions of undue influence.

Improper Execution & Forgery Claims

A will can be challenged because it was not executed correctly. State legislation, such as the Succession Act 2006 (NSW) (‘Succession Act‘), sets out specific requirements for how a will must be signed and witnessed to be legally binding. If these formalities are not followed, the will may be deemed invalid.

Another ground for a will dispute is forgery or fraud. This occurs when the will itself is a fabricated document or when the testator’s signature has been forged. If it can be proven that the document was created or signed deceitfully, the court will not grant probate, and the will is considered invalid.

Family Provision Claims & Intestacy Rules

Eligibility for Family Provision Claims

A family provision claim is a specific type of probate dispute that does not challenge the validity of a will. Instead, it allows certain individuals to ask a court for a larger share of the estate if they have been left with inadequate provision. 

Confusing this with a will contest is a frequent error, as they are separate legal processes with different time limits.

A claim can be successful even if the will is legally valid. Those who may be eligible to make a family provision claim include:

• Spouses
• In fact partners
• Children
• Dependants who relied on the deceased for financial support

Factors Courts Consider for Provision

When a court assesses a family provision claim, it evaluates several factors to determine whether to adjust the distribution of the deceased person’s estate. The court’s goal is to ensure that eligible claimants receive adequate provision for their proper maintenance and support.

Key considerations include:

• The claimant’s current financial position and future needs
• The nature and duration of the claimant’s relationship with the deceased
• Any contributions the claimant made to the estate or the welfare of the deceased
• The total size of the estate and the competing financial needs of other beneficiaries
• Any reasons the deceased provided for excluding or limiting the claimant’s inheritance in the will

Intestacy Rules When No Valid Will Exists

Intestacy disputes happen when a person dies without creating a valid will, or when their existing will is successfully challenged and invalidated. In these situations, the estate is distributed according to a strict legal hierarchy set out in legislation, rather than according to the deceased’s wishes.

Under the Succession Act, the rules of intestacy prioritise the surviving spouse or in fact partner, followed by any children. If there are no immediate family members, the estate passes to more distant relatives. 

These rigid rules can lead to disputes, especially in blended families or where the legal status of a relationship, such as a de facto partnership, is contested.

Executor Misconduct & Estate Administration Conflicts

Breaches of Fiduciary Duty & Lack of Transparency

An executor has a legal obligation to act in the best interests of the estate and its beneficiaries. This is known as a fiduciary duty. Disputes often arise when an executor fails to meet this standard, leading to claims of misconduct or negligence.

Common grounds for complaint against an executor include:

• Acting in their interest: This occurs when an executor’s personal interests conflict with their duties to the estate. An example is using estate funds for personal expenses or selling an estate property to a relative at a discounted price.
• Lack of transparency: Beneficiaries are entitled to receive information about the administration of the estate. An executor who withholds information, fails to provide accounts, or ignores communication from beneficiaries may be in breach of their duties.
• Asset mismanagement: An executor must protect and properly manage the assets of the estate. This includes preventing property from deteriorating, selling assets for fair market value, and investing funds appropriately.
• Dishonesty or fraud: Any fraudulent activity, such as forging documents or misappropriating funds from the estate, is a serious breach and a clear reason for removal.

Unreasonable Delays in Estate Distribution

Executors are expected to manage and distribute an estate within a reasonable timeframe. In New South Wales, this is typically within 12 months from the date of death. When an executor fails to act promptly without a valid reason, it can cause significant financial harm and uncertainty for beneficiaries.

Estate administration disputes can be triggered by several issues, including:

• A failure to apply for a grant of probate in a timely manner.
• Poor communication with beneficiaries about the progress of the estate administration.
• Disagreements over which debts should be paid from the estate.
• Conflicts regarding the sale or transfer of specific assets.

While some delays, such as those caused by tax complications or property sales, may be justifiable, complete inaction is not. Beneficiaries who are affected by unreasonable delays can apply to the Supreme Court for orders to compel the executor to act.

The Legal Process to Remove an Unfit Executor

If an executor is unfit, unwilling, or unable to perform their duties, beneficiaries can apply to the Supreme Court of NSW to have them removed. The court will only grant a removal if it is in the best interests of the estate.

The process generally involves the following steps:

1. Seek Legal Advice: The first step is to consult a lawyer to assess whether the concerns about the executor’s conduct meet the legal threshold for removal.
2. Collect Supporting Evidence: To succeed in a removal application, you must provide clear evidence of the executor’s misconduct. This can include emails, financial records, and timelines that document the mismanagement or delays.
3. File a Court Application: A formal application is prepared and filed with the Supreme Court. This application must be supported by affidavits and the collected evidence, and all relevant parties, including the executor and other beneficiaries, must be notified.
4. Attend the Court Hearing: If the executor contests the application, the matter will proceed to a court hearing. Both sides will present their evidence, and the court will determine if removing the executor is justified.

Trust Disputes & Contentious Probate Issues

Ambiguous Trust Terms & Interpretation Disagreements

Disputes related to a trust often begin with the document that created it. When a trust deed contains ambiguous or unclear language, it can lead to different interpretations among the parties involved. These disagreements frequently centre on critical aspects of the trust’s administration.

For example, beneficiaries and the trustee may have conflicting views on how distributions should be calculated and paid out. Similarly, vague terms can cause disputes over the types of investment decisions the trustee is permitted to make with the trust’s assets.

Trustee Authority & Breaches of Trust

Conflicts can also arise from the actions of the person appointed to manage the trust. A trustee is granted specific powers by the trust instrument, and acting outside this authority can trigger a legal dispute. Beneficiaries may challenge actions they argue fall beyond the scope of the trustee’s granted powers.

A more serious issue is a breach of trust, which occurs when a trustee fails to act in the best interests of all beneficiaries. This can happen if a trustee makes decisions that favour one beneficiary or group of beneficiaries at the expense of others, violating their fundamental duty of impartiality.

Case Study on Equitable Estoppel in Kramer v Stone

The Promise of Inheritance & Detrimental Reliance

The High Court of Australia case of Kramer v Stone [2024] HCA 48 (‘Kramer case‘) provides a clear example of how a verbal promise of inheritance can be enforced, even when it contradicts a written will. 

The Kramer case involved David Stone, a share farmer who worked on a 100-acre property for decades. In 1988, the farm’s owner, Dame Leonie, promised him that he would inherit the farm upon her death.

Relying on this promise, Mr. Stone continued to live and work on the farm for another 23 years, earning a meagre and irregular income. He acted to his detriment by forgoing more profitable employment opportunities and a different lifestyle. 

The evidence presented showed that he endured substandard living conditions, including:

• a lack of fresh water;
• no insulation; and
• vermin infestations.

All of this was endured in the belief that the farm would one day be his.

The High Court Decision on Proprietary Estoppel

When Dame Leonie passed away in 2016, her will left the farm to her daughter, with only a cash gift of $200,000 for Mr. Stone. The executors of the estate argued that for Mr. Stone’s claim to succeed, he needed to prove that Dame Leonie had provided further encouragement after her initial promise.

The High Court of Australia rejected this argument. It found that a legal principle known as equitable estoppel applied. The court determined that the following elements were satisfied:

• A clear and unequivocal promise was made to Mr. Stone.
• It was reasonable for him to rely on that promise.
• He acted in reliance on the promise to his significant detriment.

The court ruled that these factors were sufficient to establish the estoppel. As detailed in the Kramer case, there was no additional requirement to prove that the promiser offered subsequent encouragement or had actual knowledge of the specific acts of reliance. 

The court’s decision made it unconscionable for the estate to break the promise, and it ordered that the farm be held on trust for Mr. Stone.

Conclusion

Probate disputes involve various legal challenges, from contesting a will’s validity based on a lack of mental capacity or undue influence, to family provision claims and conflicts over an executor’s management of an estate or trust. Correctly identifying the type of probate dispute is critical for any beneficiary or executor to understand the legal process and evidence required.

Because each type of contentious probate matter has its deadlines and requirements, getting early legal advice is the most effective way to protect your rights. If you are involved in an estate dispute, contact the experienced will dispute lawyers at Law Bridge to discuss your situation and receive clear advice on the best path forward.

Frequently Asked Questions