Lyle Barns was a farmer who died in August 1998. He had a Will executed in May 1996 appointing his son Malcolm executor and left the whole of his estate to his wife Alice, making no provision for Malcolm, their adopted daughter Kathryn and her two children.
Malcolm had worked on the family farm his whole life. Kathryn was divorced and had been bankrupted. At some stage her parents made some financial provision for her. In their wills they Lyle & Alice wanted to ensure that the farm went to Malcolm and to preserve their estates from a family provision claim by Kathryn.
The day that he executed the Will, Lyle, Alice and Malcolm entered into a deed formalising an agreement whereby Lyle and Alice would make mutual wills— Alice leaving her whole estate to her husband if he survived her — with the additional gift to Malcolm and that the wills would not be changed unless the other parties consented in writing. They all agreed they would act to ensure that their estates would devolve in accordance with the agreed wills.
Probate of the Will was granted to Malcolm in January 1999. The estate had a net value of $A1.8 million. In March 1999 Kathryn made a family provision claim and sought a declaration that the deed was void the Supreme Court of South Australia dismissed Kathryn’s claim.
The issues that concerned the Court were what amounted to ‘the estate’ of a deceased person available to meet an order for family provision in the legislation; and the effect of mutual wills in the context of family provision legislation.
On Appeal the High Court held that the definition of ‘estate’ in the South Australian legislation included the property that was affected by the mutual wills contract.
“[T]here is no justification for a conclusion that the deceased left no estate out of which provision could be made for the appellant if a court saw fit.”
The Court considered that where there is a contract to leave particular property to a person in a will, that does not have the effect of removing the property from the Estate that may be the subject of a claim under the South Australian family provision legislation.
If Lyle, Alice & Malcolm had wished to keep Kathryn from making a family provision claim on the estate they could have avoided the effect of the legislation by making a gift during their lifetime so that the deceased died with no estate (this is not possible in all jurisdictions); However a person who has entered into a contract with the deceased to have the deceased leave property to the person by will is a beneficiary under the will rather than a creditor of the estate.