Confessions of an Estate Planner: Part 5 Estate Litigation - Claims of Spouses

Estate Litigation

This area of litigation is often called challenging a will. A will can of course be challenged if there is something wrong with it or how it was made or how it is to be read.

At common law a willmaker is free to do as they wish. Just like anyone can decide to make a gift of something to someone during their lives.

The common law has been changed by statute in most modern jurisdictions to allow certain eligible people (usually those closely related to the deceased) to be able to claim for better provision out of an estate (if adequate provision has not been made for them in circumstances where they should have been properly provided for). 

Societies demanded (and legislated many years ago) to protect the rights of wives and dependent children. This area of Estate Litigation is termed Testator's Family Maintenance and more recently Family Provision.

Part 5 deals with spouses. 

At one end of the spectrum you have the legally married devoted spouse of 30 years claiming that adequate provision has not been made for them.

At the other you have de-facto gold digging mail order bride or sometime on and off girlfriend who has only recently come on the scene.

You might ask yourself how could someone not make provision for a devoted spouse of 30 years? Well life is a very strange beast and there are some very different and wonderful situations out there. Here are but three examples:-

(a)       a lengthy period of estrangement although the couple is still legally married;

(b)       the family farm is left to children (who are working the farm) by-passing the spouse;

(c)       the deceased overestimates their own net worth and underestimates their liabilities and whilst making provision for
           a spouse, that provision is not adequate.

I also regularly encounter the blended family scenario where the surviving spouse is not the parent of the surviving children (and provision has been made for the biological children of the deceased and the surviving spouse is not at all enchanted with that and in reality needs financial support to survive comfortably). 

There is a lot of room for confusion, unfulfilled expectations, disappointment and of course protracted and expensive litigation.

What is a spouse?

Before a spouse can claim Family Provision they must show they are eligible.

S5AA of the Succession Act 1981 sets this out succinctly:-

“5AA Who is a person's spouse 5AA

(1)       Generally, a person's spouse is the person's:-

(a)      husband or wife; or

(b)       de facto partner, as defined in the Acts Interpretation Act 1954 (the AIA), section 32DA; or

(c)       civil partner, as defined in the AIA, schedule 1”

So if there is a legal marriage that has not ended in divorce or annulment there is no doubt at all you have a spouse that is eligible to claim.

The situation is more complicated with de facto partners. There is an additional requirement in S5AA (2) (ii):-

“(ii)     the person and the deceased had lived together as a couple on a genuine domestic basis within the meaning of the AIA, section 32DA for a continuous period of at least 2 years ending on the deceased's death;”

This is where it gets interesting. 

Section 32DA (Meaning of Defacto Partner) of the AIA provides:-

“(1)     In an Act, a reference to a de facto partner is a reference to either 1 of 2 persons who are living together as a couple on a genuine domestic basis but who are not married to each other or related by family.

(2)       In deciding whether 2 persons are living together as a couple on a genuine domestic basis, any of their circumstances may be taken into account, including, for example, any of the following circumstances—

(a)      the nature and extent of their common residence;

(b)      the length of their relationship;

(c)       whether or not a sexual relationship exists or existed;

(d)       the degree of financial dependence or interdependence, and any arrangement for financial support;

(e)       their ownership, use and acquisition of property;

(f)        the degree of mutual commitment to a shared life, including the care and support of each other;

(g)      the care and support of children;

(h)      the performance of household tasks;

(i)        the reputation and public aspects of their relationship.

(3)       No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether 2 persons are living together as a couple on a genuine domestic basis.

(4)       Two persons are not to be regarded as living together as a couple on a genuine domestic basis only because they have a common residence.

(5)       For subsection (1)—

(a)      the gender of the persons is not relevant; and

(b)       a person is related by family to another person if the person and the other person would be within a prohibited relationship within the meaning of the Marriage Act 1961(Cwlth), section 23B, if they were parties to a marriage to which that section applies.

(6)       In an Act enacted before the commencement of this section, a reference to a spouse includes a reference to a de facto partner as defined in this section unless the Act expressly provides to the contrary.”

I have underlined some key parts of the section. What these key parts tell us is:-

• no one indicator of what might show that a couple are living together on a genuine domestic basis is conclusive. I suggest that to succeed a claiming spouse would need to prove at least several of the matters (“It’s the vibe your Honour”);
• just because a couple lives together does not mean they are defacto partners or are in a de facto relationship;
• same sex couples are included;
• as there is no hard and fast rule (and no one knows what goes on behind closed doors) it is an area regularly and ferociously litigated by diametrically opposed parties.

Courts like documentary evidence when deciding cases (usually to back up the testimony of a party). How the deceased and surviving potential partner recorded their relationship status with the following (amongst others) is usually compelling:-.

• Centrelink;
• the Australian Taxation Office;
• the Child Support Agency;
• Medicare;
• any private health insurer;
• any bank or financier for credit;
• any landlord;
• any prospective employer or an employment agency; or
• any psychologist or medical practitioner.

Now that I have settled everything in your mind about a potential spouses eligibility to claim in Family Provision applications, I have to let you down and inform you that it is whole different ball game when it comes to Superannuation Death Benefits (as to which see Confessions of an Estate Planner Part 4).  In short:-

• the rules of the Superannuation Fund dictate if someone is eligible as a spouse and usually the Trustee of the Fund (not a Court) will decide if that person is an eligible spouse;
• Federal Superannuation Law (not the Queensland Law set out above) applies (the laws are similar but there are different legal definitions);
• unless the rules of the Superannuation Fund say so, there is no minimum duration of the relationship (2 continuous years up to the date of death in Queensland as set out above). In other words someone could be successful if they can show the relationship lasted 2 weeks (I have been involved in such a case).

If you find what I say hard to believe here is some further reading for you. 

Stories like this one (which has been in the news lately) are not uncommon. The wannabe girlfriend got the lot and the deceased’s minor children got nothing. Note this comment:-

  “Military Super did not allow its members to nominate beneficiaries, she said, and had complete discretion over who would be paid out in the event of a serviceman’s death.”

This illustrates what I said above. If this matter was before the Supreme Court of Queensland (i.e. a Family Provision Application) the girlfriend would not have been eligible due to not living with the deceased in a genuine domestic relationship for 2 years prior to his death.

Now what about the children of a second or third spouse or the children of a wannabe spouse. It all gets very interesting.

Part 6 will deal with the claims of children, step children and children of domestic partners.