How Much is a Promise Worth? What You Need to Know About the Law Reform (Testamentary Promises) Act 1949

The situation seems simple.  A promise is made (by the "promisor") to someone (the "promisee"), that they will be rewarded in the promisor's Will for work or services carried out. Time passes, and the (now deceased) promisor has failed to follow through on their promise, leaving no such reward (or less than what was promised) in their Will. The promisee can then claim against the deceased's estate for the remuneration that was promised to them. Such claim is made under the Law Reform (Testamentary Promises) Act 1949.

As can often be the case with estate matters, "simple" becomes complex. Below are a few points to be aware of if you think you may have a claim against someone's estate or conversely, to best protect your future estate from such claims.

1. Any claim against the deceased promisor's estate by their surviving partner or spouse (under the relevant relationship property legislation, the Property (Relationships) Act 1976) would take priority over a claim under the Law Reform (Testamentary Promises) Act 1949 ("the Act").

2. To be successful the promisee has to prove the following:

(a) That they have provided services to the deceased or carried out work for them;    
(b) That the services or work were carried out during the deceased's lifetime;    
(c) That the deceased promised to reward the claimant for these services or work (as opposed to a promise that was unrelated to the work or services    performed) by way of a testamentary provision; and    
(d) That the deceased failed to make the testamentary provision or remuneration, as promised.

3. The Courts have adopted a broad definition of "work" and "services".

(a) The Court of Appeal1  has considered companionship, affection and emotional support as qualifying services for an application under the Act, provided that they are exceptional and not what would normally be expected of a relative within a family relationship. Services to a family member, are assessed against the context of that particular family, not by an objective standard of a "typical family."

(b) "Work" and "services" can include farm work and assistance with the deceased's property or business; extensive housekeeping, caregiving and financial support and assistance. These examples are easier to quantify in money terms than those listed above at 3(a).

4. There are no strict requirements as to the form of the promise. A promise does not have to be expressed and instead can be implied from the surrounding circumstances. In Byrne v Bishop the Court of Appeal upheld the deceased's promise to make a testamentary provision for the children as a reward for their services.  The children were successful in their claim despite remaining unaware of any promise having been made by the deceased as he had told their father of the promise instead.

5. An important element, in proving a promise, is how the claimant understood the deceased's words and conduct. While corroborating evidence of a promise would support a claim under the Act, it is not a mandatory requirement and a claim will not necessarily fail without this.

There is a long list of possible factors that a Court will consider, in determining whether such claims will succeed. If you are concerned that your estate may be vulnerable to such claim, or that your hard work will not be rewarded in the way you have been promised, contact us today for advice on your options.

Peter Fuscic on (09) 306 6746 (pfuscic@mcveaghfleming.co.nz)     

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1 Byrne v Bishop [2001] 3 NZLR 780; (2001) 20 FRNZ 609 (CA) at [6]