When a person dies, disputes can arise as to the division of their property and the contents of their Will. Sometimes how property is dispersed under the Will does not reflect what a deceased may have promised during their lifetime and in some circumstances, this can give rise to a valid testamentary promises claim.
To bring a testamentary promise claim the following circumstances must exist:
- The claimant must have rendered services to, or performed work for, the deceased in the deceased’s lifetime. The services need to be beyond those naturally incidental to a close family relationship.
- There must be an express or implied promise by the deceased to reward the claimant.
- There must be a nexus between the services and the promise. So, the promise cannot be to reward past services or work, the work or services need to be provided, at least in part, as a result of the promise and the promise needs to relate to the work or services.
- The deceased must have failed to make the promised testamentary provision or otherwise remunerate the claimant.
Even if the elements of the claim exist, the Court has a discretion to make such award as is considered reasonable to recompense for the services provided, subject to the limitation that any award should not be greater in value than what was promised.
In considering what award to make the Court can take into account:
- the circumstances in which the promise was made and the services were rendered or the work was performed;
- the value of the services or work;
- the value of the testamentary provision promised;
- the amount of the estate; and
- the nature and amounts of the claims of other persons in respect of the estate.
In a recent High Court case McMillan v Pretty  NZHC 1094 a claim was bought by the nephew of the deceased who claimed his aunt had made a promise to him that, in consideration and reward for providing a loan of $185,415.60 interest-free to her and her late husband in order to renovate the Waiheke Island house, he would inherit the house after their deaths and/or be the primary beneficiary of their wills. His case was that he provided the money as well as various domestic and other services as a loving and dutiful nephew. He sought to be awarded a full interest in the house.
In his aunt’s Will the claimant was to equally share the estate with another beneficiary.
To be successful in his claim the claimant needed to satisfy the Court that his aunt made a promise to leave the house or estate to him to specifically reward him for the provision of funds to her and her late husband for the renovations.
In this case there was evidence of the claimant borrowing the funds for which he had to pay interest, and correspondence from the deceased’s lawyer setting out the understanding that the deceased and her husband intended to carry out substantial renovations which the claimant was to pay for and that the claimant would become the legal owner following their deaths. The lawyer advised drafting up a contract to record the agreement but that did not happen.
Further funds were required to complete the renovations. The claimant was reluctant to provide these funds unless his interest was protected and there was a breakdown in the relationship between the claimant and deceased.
Nine witnesses provided evidence of what they had heard and their observations to support the claimant’s position.
There were previous Wills which left the property to the claimant, but later Wills treated the claimant’s contribution as a loan.
The Court accepted the claimant’s account saying it was clear there was a close and affectionate relationship between the claimant and the deceased which was supported by the fact that the deceased felt comfortable to ask the claimant for money for the renovations.
In its decision the Court acknowledged that as she aged the deceased’s position about the claimant’s inheritance changed, but the claimant continued to support her. The promise had been made and not kept.
The property as worth $1,400,000. Having considered the position of the other beneficiary who was not wealthy, the Court ordered the net sale proceeds of the house were to be divided ¾ to the claimant and ¼ to the other beneficiary. The Judge considered such an award recognised the promise made and added to the half share the claimant was left to recognise the advance of funds, and also recognised the other beneficiaries claim.