NZLC - Preliminary Paper 24: Succession Law - Testamentary Claims

173 CHILDREN MAY CURRENTLY MAKE A CLAIM for “adequate provision for their proper maintenance and support.”¹⁰⁵ This applies to children of any age. Sons and daughters in their 50s and 60s can succeed in obtaining substantial awards against the estates of parents who have disinherited them, or have left property amongst the children in proportions which the courts regard as unjustified.

174 The purpose of the Commission’s proposals is to define the right of children to claim in more precise terms than the present law does. Those children whom will-makers have the responsibility of supporting at the time of death must clearly have a support claim. In the case of young children, young adults in training and disabled children, we think that the parent’s responsibility is generally accepted in the community. Our proposals for these children are contained in this chapter. The parent’s responsibility for mature children is much less clear and will be considered in the next chapter.

A child of the will-maker should be able to claim a support award to ensure the child’s maintenance and education while the child is

175 Applying our proposed legislation, the judge now comes to the children’s claims, which are directed at the balance of $70 000. A lump sum support award amounting to $40 000 might (depending on the circumstances) be made for Child3, as she must complete her secondary schooling (and perhaps tertiary education) before she can reasonably be financially independent. Child2 might be awarded $25 000, slightly less, because she has begun tertiary education and has part-time employment. At this point we leave open the question whether Child1, as an adult child without a disability, is entitled to claim under this provision. In any event, as the estate is large enough, Child1 can retain the

176 By comparison, under the present law, each child might perhaps be awarded between $33 750 and $54 000 each. There would be no separate, priority award for children who are still dependent on the will-maker, though the capital sum awarded to these children would probably be larger than that awarded to their adult siblings.

177 The Commission considers that separating out the claims of children who are likely to be dependent on the will-maker has these advantages:

The purpose of support is to ensure that the will-maker’s child is reasonably maintained and educated for the period in respect of which the child may claim.

The amount of the claim is limited to what is reasonably necessary for this purpose.

180 CHILDREN UNDER 20 YEARS OF AGE – This generally accords with child support law during a will-maker’s lifetime. But that law allows custodians of children to claim support from their parent only when children are under 19 years, unmarried, and not in full employment or a Government-assisted work scheme, nor receiving a tertiary student allowance or social security benefit. The Commission’s proposals dispense with these additional requirements. It is enough that the claimant be a minor child. That is to say, a child under 20.¹⁰⁷

181 CHILDREN UNDER 25 YEARS OF AGE WHO ARE UNDERTAKING OR WISH TO UNDERTAKE EDUCATION OR TECHNICAL OR VOCATIONAL TRAINING – Article 28(1)(c) of the United Nations Convention on the Rights of the Child (1989) provides that states which are parties to that Convention recognise the right of the child to education, and shall make higher education accessible to all on the basis of capacity by every appropriate means. Higher tertiary education course costs and reduced allowance entitlements presuppose a greater degree of parental support for single students under 25 years of age.¹⁰⁸

182 Support through a period of tertiary education or technical or vocational training is very important in enabling a child to achieve financial independence. As Grainer says, “[i]t is possible that today one’s education and resultant earning capacity is one’s most valuable asset” and that the provision of educational opportunities for children is today “a crucial wealth transfer within families.”¹⁰⁹ It is unreasonable to expect all children in this category to be completely financially independent until their training is complete.

183 It is not proposed, however, that children who have returned to education after a prolonged period of independence should be able to claim under this head. There is therefore a limit of 25 years of age. Although expressed as an age limit, its basic purpose is to establish the longest period during which a parent’s clear legal obligation of support should exist. This limit also acts to put a ceiling on the amount which should be awarded. But intervening periods during which a child has been employed will not disqualify the child.

184 DISABLED CHILDREN – This category includes children who are unable to earn a reasonable livelihood by reason of a mental, intellectual or physical disability which developed when the children were under 25 years of age. Children disabled at an early age may require more extensive support in quantity and duration if they are to enjoy similar opportunities to develop independently. Children whose disability developed when they were over 25 years of age may have had some real opportunity to develop financial independence. Children over 25 years of age may also enjoy greater disability support from public resources.¹¹⁰

185 We have defined this third category in clear-cut terms. This may be seen as unfair to those who suffer a continuing disability arising out of childhood, but who do not quite fit within the criteria laid down. For example, a child’s disability might not become fully apparent until the child is aged 26 or 30, and the child may not then have a reasonable opportunity to achieve financial independence. There may be a need for some discretionary power so that the court can extend the age limits. Whether this is necessary depends in part on what is decided for adult children generally: see chapter 7.

The measure of support should be sufficient

to ensure that the child is reasonably maintained, educated and advanced towards financial independence,
for the remaining period of eligibility, but no longer.

Courts should determine “reasonable” support considering (at the time that the will-maker died) each child’s

age and stage of development, including level of education or vocational training,
other actual and potential sources of support, including child support from a surviving parent or a support award from the estate of another deceased parent,
total support received from the deceased parent,
reasonable ongoing needs, and
actual and potential capacity to meet their own reasonable needs.

187 FORM AND PAYMENT OF SUPPORT – Awards should usually be lump sum payments, although courts should be able to order periodic payments if the child’s circumstances require. In some circumstances it will be appropriate for awards to be paid or transferred direct to the child. In other cases awards would be better made to custodians: those who are the sole or principal providers of (or who share substantially in the provision of) the child’s ongoing daily care.

Support awards may take the form of lump sums or periodic payments.

Support awards may be made to a child direct or to a custodian on behalf of the child.

188 PRIORITY OF CHILDREN’S SUPPORT CLAIM – Appendix B sets out proposals for resolving the relative priority of support claims competing with other claims and one another.

Will-makers should have primary responsibility for supporting children under 25 years of age and should not be able to rely on the State providing primary support: courts making support awards should not take into account any means-tested benefit available to a child under 25 years of age.

Will-makers should not have primary responsibility for supporting disabled children of 25 years of age or older. If welfare support is available, the will-maker’s duty is to supplement that support.

190 Because will-makers have a special and immediate responsibility for support during the period when their children are under 25 years of age, parental resources will meet the needs of children under 25 years of age before taxpayers’ resources. This accords with the express or implied policy of welfare and support law.¹¹¹ The policy of the Department of Social Welfare is based on the assumption that, while complete dependence on a parent ceases at an age no later than 18 years, some reliance on the parent’s resources may continue up until 25.

191 It follows that when making an award in favour of a child under 25 years of age no account should be taken of means-tested benefits payable to the claimant (the present law: Family Protection Act 1955 s 13). It also follows that no claimant should be able to contract out of making a support claim (see chapter 10).

192 The position is different with disabled children over 25 years of age. The general policy of welfare and support law (whether express or implied) is that a will-maker during his or her lifetime has a finite responsibility for his or her child. If a child in need is no longer a minor, even if that child has a mental, intellectual or physical disability, the will-maker is not legally responsible for meeting that need.¹¹² The needs of an adult child, especially a child with illness, or a child whose mental, intellectual or physical disability creates special needs, may be very significant. The Department of Social Welfare regards the child as a single person family unit and does not require support from parents. Parents are not legally obliged during their lifetime to devote all their resources to these special needs before and instead of taxpayers’ resources.

193 Will-makers should be required nevertheless to make provision to supplement state-funded welfare. The care a disabled child aged over 25 receives under the health and welfare systems should be taken into account by courts when considering the child’s claim to be supported from the will-maker’s estate. The court will also have to consider the effect on the child’s means-tested benefits of any provision which may be made from the will-maker’s estate, as it will augment the child’s own means.

We propose that children be able to claim a support award to ensure the child’s maintenance and education while the child is

194 The claims which other children might have against the estate of a will-maker are discussed in the next chapter.

New Zealand Law Commission

6 Children’s claims