Legal principles that allow those contesting a will to have their legal costs paid out of the deceased’s estate are out of date and should be changed, the state’s Chief Justice says.
In a wide ranging analysis of the centuries-old legal principle, Chris Kourakis said that in cases where the dispute goes beyond clarification of a will’s intent, those making a claim should pay their own costs.
“It is not obvious to me why a testator’s fault in the making of a will should result in a loss to the successful beneficiary in litigation over the estate,” he said in a recent decision.
“True it is there is a public element to the resolution of disputes over estates.
“… the bottom line is that the disputes are between private parties advancing competing claims to the testator’s bounty for their private financial benefit.
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“Of even greater contemporary significance is the effect of the old probate costs rule on parties to litigation of this kind.
“The probability of the payment of the costs of all parties out of the estate irrespective of the result gives the parties little incentive to make appropriate decisions as reasonable self-funded litigants about their prospects of success, and the proportionality of the expense incurred in bringing or defending proceedings.”
Kourakis made the additional comments in a case where costs were ordered to be paid out an estate.
“The principle has a long lineage, but it is perhaps so long that it has become something of an anachronism.
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“The probate costs rule is arguably anachronistic in modern times in which there is a greater concern with the need for proportionality in litigation. It may soon be necessary to reconsider it.”
An Adelaide probate lawyer told InDaily the Chief Justice’s comments were timely as there had been an increase in the number of contested wills.
“It’s a combination of changes in the structure of family relationships and the ability to fund your claim from the pot of money left behind,” the lawyer said.
“If it’s not going to cost them anything to have a crack at the estate, then they’ll do so; some estates are are almost exhausted by the costs.”
Kourakis’s comments were made at the conclusion of his judgement in the case of a 22-year-old murderer who had left a handwritten and unwitnessed will which was the basis for distribution of $550,000 in life insurance payouts.
The “will” left all his possessions to his mother; it’s validity was contested by the father who had previously divorced the mother.
The challenge failed and costs of the challenge were paid out of the estate.
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