WHAT DOES THE LAW REFORM (TESTAMENTARY PROMISES) ACT DO?
The Law Reform (Testamentary Promises) Act 1949 allows people, in estate litigation cases, who have provided work or services for a deceased person to bring a claim against the estate of that person where the deceased has made a promise to reward the claimant for those services.
The promise does not have to be contractually binding. It can be made before or after the work or services have been provided and can be either express or implied. However there must be a relationship between the promise and the work or services provided and the deceased person must have the mental capacity to make the promise.
The purpose of the legislation is to protect persons who have performed work or services for the deceased on a promise that has not been honoured by giving them the right to make a claim against the deceased person’s estate. The Testamentary Promises Act also provides an element of re-dressing any unjust enrichment of the estate at the expense of the person providing the work or services.
WHAT WORK OR SERVICES PROVIDED UNDER THE LAW REFORM (TESTAMENTARY PROMISES) ACT CAN BE TAKEN INTO ACCOUNT?
“Work” or “services” can be broadly interpreted to include tangible work like housekeeping and farm work and also intangible services including companionship, affection and emotional support. However the services need to go beyond what would normally be expected of a relative, a member of the same household, a neighbour, or a friend.
WHO CAN MAKE A CLAIM UNDER THE LAW REFORM (TESTAMENTARY PROMISES) ACT?
Anyone is eligible to bring a claim under the Act regardless of their relationship with the deceased.
WHAT IS THE TIME LIMIT FOR BRINGING A CLAIM UNDER THE LAW REFORM (TESTAMENTARY PROMISES ACT?
The claim must be filed with the Court within 12 months of the grant of probate. The Court can extend this timeframe if it thinks it is necessary but only if the estate has not been distributed.
HOW DOES THE COURT DEAL WITH CLAIMS UNDER THE LAW REFORM (TESTAMENTARY PROMISES) ACT?
The Court, in estate litigation cases, has a wide discretion to award an amount which is reasonable in all the circumstances. Partly this reflects the fact that difficulties of proof can arise because the person who is alleged to have made the promise is no longer alive.
Therefore in exercising its discretion the Court can award less to a claimant than the amount said to have been promised by the deceased.
WHAT FACTORS ARE RELEVANT IN A CLAIM UNDER THE LAW REFORM (TESTAMENTARY PROMISES) ACT?
All the circumstances of the case are relevant in estate litigation cases. This includes the circumstances in which the promise was made, the reasonable value of the work or services provided, the size of the estate, the nature and strength of any competing claims and whether the deceased made any gifts to the claimant during the deceased’s lifetime.
Alex McDonald, Estate & Trust Barrister, Auckland