The will divides the estate equally between three children. One of them has lived in the parents’ Toorak house for ten years and cared for them in their final years. The other two live in Hong Kong and want the house sold. The child in occupation says the parents always promised it would be theirs, and refuses to move. Rates and insurance are falling into arrears. Nothing in the will mentions occupation.
This is one of the most common, and most bitter, estate disputes.
Where everyone stands
- The executor must collect and protect estate assets and administer the estate in the interests of all beneficiaries. Letting one beneficiary live in the house rent-free, indefinitely, is generally not consistent with that duty.
- The occupying beneficiary has no right to stay just because they are a beneficiary. They may have other claims, though: a family provision claim, a claim based on promises they relied on, or a claim for the value of care or improvements.
- The other beneficiaries may ask the executor to obtain possession, charge an occupation fee or rent, or offset the value of occupation against the occupier’s share.
- If the house is transferred to all the children as co-owners, any one of them can generally apply to VCAT for an order for sale or division of the property.
Ways it is resolved
- A buy-out. The occupying child buys out the others at market value, with credit for any agreed adjustments.
- A time-limited licence. They stay for an agreed period, paying outgoings, before the property is sold.
- Sale with an adjustment. The property is sold and the occupier receives a defined amount for care or improvements.
- A court or VCAT order if nothing else works. This is the slowest and most expensive path.
Avoiding it
If one child lives with you or cares for you, deal with it in your will: a right to reside, an option to purchase at valuation, or an extra gift for care. Where a will is silent on these matters, disputes commonly follow.
Frequently asked questions
Can a beneficiary live in the deceased’s house rent-free?
Not as of right. Being a beneficiary does not give a right to stay in an estate property, and an executor who lets one beneficiary live there rent-free indefinitely is generally not acting consistently with their duty to all beneficiaries. The position is different if the will grants a right to reside or the beneficiaries agree to an arrangement.
Can an executor make a beneficiary move out of the estate house?
An executor must collect and protect the estate’s assets, and can take steps to obtain possession from a beneficiary who has no right to stay. The usual first step is to negotiate a buy-out, a time-limited licence or a sale with an adjustment. A court or VCAT order is the last resort because it is the slowest and most expensive path.
What if the child living in the house says the parents promised it to them?
They may have a claim, such as a claim based on promises they relied on, a family provision claim, or a claim for the value of care or improvements. These claims depend on the evidence and need to be resolved, by agreement or by the court, before the property is finally dealt with.
How can parents avoid a dispute over the family home?
If one child lives with you or cares for you, deal with it expressly in your will, for example through a right to reside, an option to purchase at valuation, or an extra gift for care. Where a will is silent on occupation, disputes commonly follow.
Chua Tan Associates advises families, executors, trustees and their professional advisers on estate planning, estate administration and estate disputes, in Australia and across borders. To arrange a confidential consultation, please contact our Melbourne office on +61 3 9602 3988 or submit an enquiry. Advice is available in English, Mandarin and Cantonese.
Justin Chua (蔡智勋), lawyer and mediator, Chua Tan Associates, Melbourne. General information only, not legal advice. Victorian law unless stated otherwise.
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