In New Zealand the Family Protection Act 1955 allows children to make claims against their parent’s estate. If proper provision is not made the following people can claim provision out of the deceased estate. Section 3 of the Act provides an extensive list of who may apply.
Section 4(1) of the Act provides that if adequate provision is not available from the deceased’s estate for the proper maintenance and support of the persons who can claim under the Act, the Court may, at its discretion, order any provision it thinks fit to be made out of the deceased estate.
Maintenance and support
The Court interprets proper maintenance and support broadly to include emotional support – among other things. Proper maintenance tends to look at the financial provision, while support reflects the importance that the claimant played in the deceased’s life and connection to the family.
The court considers a wide range of factors when determining whether the deceased breached their moral duty to provide for an adult child including but not limited to:
- whether the child has been left anything;
- what the deceased’s opinions and wishes were – this is often expressed separately in a memorandum of wishes.
- the size of the estate;
- the character and conduct of the child, including the relationship between the child and the deceased; and
- what moral duty the deceased had to provide for others.
Adult children without any particular financial need who are left out of a parent’s will are typically awarded 10-15 per cent of the value of the estate as recognition of their place in the family.
Typically the Court reduces the significance of a deceased’s moral duty when they were estranged from their child.
Claims must be brought within twelve months from the date of the grant of probate or letters of administration. However, the court has broad discretion to extend the timeline depending on the circumstances.
Similarly, executors may distribute the estate six months after probate however if they distribute the estate to the beneficiaries within the six months, they may be personally liable should a subsequent claim occur.
The High Court
The claimants were the estranged children of the deceased and victims of sexual and physical abuse committed against them by him throughout their childhood.
The deceased moved his assets into a trust excluding his children from making a claim against his estate under the Act. He then left his children out of his will.
The deceased’s children filed a claim in the High Court following his death asserting that their father owed them a fiduciary duty which was breached when he transferred his assets into the trust. As assets held in trust are not part of the parent’s estate and may be protected against claims under the Act.
A fiduciary is someone placed in a position of trust to act in a person’s best interests with legal consequences if a fiduciary breaches their duties and obligations.
In the notable matter of A v D and E Limited as Trustees of the Z Trust  NZHC 2997 the High Court ordered that the Trustees of the Z Trust held the trust property on constructive trust for the plaintiffs as the transfer of the assets to the trust
“was in breach of the fiduciary duties…owed to the plaintiffs”.At 
the claimants could claim against the trust as
- The deceased breached his fiduciary duty to his children to not physically and sexually assault them when they were children.
- the long-term consequences of the abuse were that a fiduciary relationship and the accompanying duty continued into the children’s adulthood.
- This fiduciary duty existed when the deceased transferred his assets into the trust. Robert breached this fiduciary duty.
- As a result of the deceased’s breach of this fiduciary duty, the trustees of the trust knowingly received the assets and therefore held the assets on constructive trust for the estate.
The trustees appealed the High Court’s decision. The Court of Appeal held in D and E Limited v A, B and C  NZCA 430 that there was no fiduciary relationship or duties owed by the deceased to any of his adult children when he transferred his assets into the trust.
The Court accepted that the deceased had a fiduciary relationship with his children when they were young and had breached that relationship and his duties to his children when he abused them.
However, when the deceased was dealing with his assets, he was not exercising the power to protect his children’s interests. The deceased could deal with his personal property as he wished, without the constraints of fiduciary obligations.
The deceased’s fiduciary obligations were defined narrowly by particular powers and did not extend to any actions the deceased chose to take concerning his assets. Further, the transfer of the deceased’s assets affected a future possible claim under the Family Protection Act 1955 and not the children’s interests.
Similarly, there was no obligation on the deceased to hold or deal with his assets for the benefit of his children. The assets were acquired by the deceased without the children’s contribution several years after they had entered adulthood.
The decision on appeal
There was no breach of fiduciary duty when the deceased transferred his assets into the trust as the deceased’s fiduciary duty to his children ended when he no longer lived with or cared for them as there was no longer a relationship of trust.
The Court of Appeal held that there could be no basis in this case to impose a constructive trust. The children would only be able to claim under the Family Protection Act 1955 against the small number of assets in the deceased’s estate.