When Grandchildren Become De Facto Children

In Chapple v Wilcox [2014] NSWCA 392, a grandson made a claim for a family provision order under Chapter 3 of the Succession Act 2006 (NSW) in respect of the estate of his deceased grandfather. Under the will, the estate consisted largely of a grazing property and pastoral business which passed to Mrs Wilcox, the deceased's only child (and the grandson's mother).

The grandson could have earned $100,000 per year but instead made a subsistence living by operating a tree lopping business. He had no assets and owed $107,000 to the Taxation Office. His father had recently won $1.3 million via gambling and was willing to give the grandson financial support. There had been limited contact between the grandson and the deceased since early 1993. On the other hand, Mrs Wilcox had devoted a large part of her life to the deceased’s pastoral business of which she was a part owner. She assisted her father in both business and personal matters, assumed sole responsibility for him in his old age and was a caring and dutiful daughter.

On the basis of these facts, in the initial court action the primary judge found that community standards and expectations required that provision be made for the grandson out of the estate and ordered provision to the extent of $387,000. He also ordered that the grandson's costs be paid out of the estate.

Mrs Wilcox initiated an appeal which was continued by her executor, and also challenged the costs order made by the primary judge. The Court allowed the appeal and rejected the grandson's application for provision, referring to the following comments of Hallen AsJ in Bowditch v NSW Trustee and Guardian [2012] NSWSC 275 at [113] in relation to a claim by a grandchild:

“(a) As a general rule, a grandparent does not have a responsibility to make provision for a grandchild; that obligation rests on the parent of the grandchild. Nor is a grandchild, normally, regarded as a natural object of the deceased's testamentary recognition.

(b) Where a grandchild has lost his, or her, parents at an early age, or when he, or she, has been taken in by the grandparent in circumstances where the grandparent becomes in loco parentis, these factors would, prima facie, give rise to a claim by a grandchild to be provided for out of the estate of the deceased grandparent. The fact that the grandchild resided with one, or more, of his, or her, grandparents is a significant factor. Even then, it should be demonstrated that the deceased had come to assume, for some significant time in the grandchild's life, a position more akin to that of a parent than a grandparent, with direct responsibility for the grandchild's support and welfare, or else that the deceased has undertaken a continuing and substantial responsibility to support the applicant grandchild financially or emotionally.

(c) The mere fact of a family relationship between grandparent and grandchild does not, of itself, establish any obligation to provide for the grandchild upon the death of the grandparent. A moral obligation may be created in a particular case by reason, for example, of the care and affection provided by a grandchild to his, or her, grandparent.

 (d) Generosity by the grandparent to the grandchild, including contribution to the education of the child, does not convert the grandparental relationship into one of obligation to provide for the grandchild upon the death of the grandparent. It has been said that a pattern of significant generosity by a grandparent, including contributions to education, does not convert the grandparental relationship into one of obligation to the recipients, as distinct from one of voluntary support, generosity and indulgence.

(e) The fact that the deceased occasionally, or even frequently, made gifts to, or for, the benefit of the grandchild does not, in itself, make the grandchild wholly, or partially, dependent on the deceased for the purposes of the Act.

(f) It is relevant to consider what inheritance, or financial support, a grandchild might fairly expect from his, or her, parents.”

Further, the unsuccessful grandson was ordered to pay the costs of the appeal action.

By contrast, in Re Filomena Rodi, deceased [2016] NSWSC 1696 an adult grandson, who lived with the deceased for about a decade in a close family relationship, and subsequently became an unemployed sole parent of a new-born baby, was granted family provision relief in the form of a legacy of $200,000. The deceased died on 13 January 2015, aged 95 years, leaving a will dated 10 December 2008, probate of which was granted on 8 July 2015. By her will, the deceased left her estate to her four children in equal shares.

In 2004, the grandson moved into the deceased’s home so as to provide the deceased with companionship that aided her continued occupation of her own home until her death and provide comfort to her children that she remained safe.

The grandson (initially with a de facto partner) lived with the deceased until her death. He continued to live in her home after her death. Whilst living there he acquired a new partner, married her in March 2015, fathered her child (born in February 2016) and, in July 2016, separated from her and retained sole care of the child.

The Court held that there was no question that, for about a decade preceding her death, the grandson was a member of the same household as the deceased. Further, the grandson’s residency with the deceased might be said to have placed him in the position of a surrogate son. The personal relationship between grandmother and grandson was direct, immediate, socially intimate and sustained; there was a personal bonding beyond merely a blood line. That there may have been an element of co-dependency, with grandmother and grandson each contributing to a positive family relationship which permitted the deceased to remain in her home despite advancing age, did not preclude characterisation of the grandson as a person who was “wholly or partly dependent” on the deceased. She provided him with a roof over his head, meals and communal living in a family setting, and he was dependent upon her for that. He was charged no rent or board but, for some years at least, he paid outgoings (including water rates and electricity charges) levied on the property.

The Court also ordered that the costs of the proceedings be paid out of the estate of the deceased.

Another case involving a successful family provision claim by a grandchild was Application by Craig-Bridges; The Estate of Ella Minnie Lillian Bush; The Estate of Ella Minnie Lillian Bush v NSW Trustee & Guardian [2016] NSWSC 1611, in which the deceased’s adult granddaughter Helene claimed the deceased did not have testamentary capacity at the time she made her last three wills leaving her estate to two charities and, in the alternate, that no provision was not proper provision for her adequate maintenance and benefit.

The deceased, Mrs Bush, died on 31 January 2015 aged 90. Her estate was valued at approximately $1 million.  The deceased’s husband died 20 years earlier and the deceased’s two children also predeceased her.  One of the deceased’s sons left 4 adult children who were the deceased’s closest living relatives at the date she died.

Mrs Bush had made a number of Wills. In a Will dated 8 June 2011 the deceased gave her whole estate to Helene and her sisters equally. The deceased then made three further Wills dated 22 November 2011, 12 November 2012 and 21 February 2013 leaving her whole estate equally to the Cancer Council of New South Wales and Wee Waa Anglican Church. The only difference between the three Wills was the executor. The Court held that the Wills were valid.

In relation to the family provision claim, Helene said that she regarded her relationship with Mrs Bush as that of parent and child. Helene was a grandchild and wholly or partly dependant on Mrs Bush. She was also a member of Mrs Bush’s household.  However, to obtain an order for provision she was required to establish further warranting factors.  Her Counsel submitted that those factors were that she was a beneficiary in the June 2011 Will, that she was in substance a de facto child of Mrs Bush and had maintained an extensive relationship with Mrs Bush throughout her life.  Those submissions were accepted by the judge who ordered that provision should be made for Helene for a 1/5 share of the estate being the share she would have received under the June 2011 Will.

Do these cases now “open the floodgates” to grandchildren making claims against their grandparents’ estates on the basis of being their “de facto children”? Do young couples have to think twice now about handing over their own children to the grandparents for extended babysitting duties, lest their own children end up legally displacing them and disinheriting them in future? Only time will tell.