The Case for Doing the Deal Right - First Time...All the Time


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The Case for Doing the Deal Right - First Time...All the Time

This Morning: An Example of the Need to Get Things Done Right in Family Law – First Time, Every Time!

This morning we read this unfortunate news article in the Sydney Morning Herald….

It’s not unfortunate in terms of the work of the paper or journalist. Instead, it’s unfortunate because it demonstrates a complaint in hindsight, that a well meaning couple, did not carry through with the benefit of advice, to complete their family law matter properly. The result is something no-one intended.

Family battle of wills over missing signature exposes the limitations of estate law

Michaela Whitbourn Published: March 1, 2015 – 9:49AM

After a three-year marriage and a messy break-up, a young couple was moving on with their separate lives. Now a missing signature is holding them together in death.

In a bitter dispute that exposes the limits of the law, a young man who died without a will has unwittingly left his entire estate to his estranged wife – even though the couple had already split their assets and had new partners.

The man’s grieving family has no rights to the assets.

“It still astounds me now,” said his father, who described his “total shock” at the sudden death of his 31-year-old son.

Before his death, his son told him he had met the woman who was “the one” and the new couple spent the last 15 months of his life together.

A missing signature is at the heart of the legal battle. The man’s estranged wife, who wanted to remarry, had served signed divorce papers on him months before his death but he had not signed them.

If he had been divorced or had left a will, his estranged wife would have no claim on the estate, which includes a house, superannuation and a death benefit. But because they were still legally married and they had no children, the state Succession Act says she is entitled to the whole of the estate.

After the couple split, the man paid his estranged wife $35,000 under a property settlement which allowed him to keep the matrimonial home. He had built the house on a block of land he bought before he was married.

“She instigated the divorce proceedings – she got her money and moved on,” the father said.

The father will be entitled to have funeral costs and potentially some debts paid but he has no further rights to the estate, although the parties may come to an agreement.

The lawyer for the man’s father said the estranged wife was “getting a second, uncontested bite of the cherry”.

“It’s not something you can blame any parliament for, because it probably has not been brought to their attention previously,” he said.

“The way that the law should be … is that if there has been a property settlement between the parties and there has been no reconciliation of the relationship, then clearly the surviving spouse has received her or his fair share of the estate.”

But the lawyer for the estranged wife said “there was a lot to this that doesn’t seem fair to this girl either” and she had done nothing wrong. He said she had a legal right to the estate and had found herself the subject of a “hatred campaign”.

The woman was not legally represented when the property settlement orders were drafted. Her solicitor said the orders could have precluded her from entitlement to his estate, but they did not. Her late husband could also have made a will or signed divorce papers, but he did not.

The man was living with his new partner at the time of his death and they planned to buy a house and have children together. But the Succession Act only gives de facto spouses an automatic right to part of the estate if the couple had lived together for at least two years or had a child together.

The man’s new partner said his father was left “heartbroken” over the dispute. In a last-ditch legal bid, she will ask the Supreme Court to grant a “family provision order” to give her a share of the estate.

“I’m not by any means money-driven but I think that [her late partner] would want what’s right to take place,” she said.

It is readily apparent that the well-meaning Husband, intended to pay out the Wife for her interest in the property he was keeping, and that a deal was done.

The first mistake, was not having the deal the couple had done, cemented in either an Application to the Court for Consent Orders or by entering a Financial Agreement – each of which could have been prepared by lawyers at minimal cost when compared with the legal mess each party to this horror story now has to spend to unravel the issues caused by the lack of formality.

It is also readily apparent, that at separation, the Husband should have prepared a new Will, given that simply separating has no impact on the validity of a Will which benefits a spouse from whom you have separated. The Husband here, had either not made a Will or otherwise had not made a Will after his marriage (any Will signed before marriage, which does not contain a term stating it was in contemplation of the marriage is invalid upon the marriage). It is always appropriate to have a Will which records “up-to-the-minute” intentions as to what should happen to your estate so as to appropriately provide for changing family circumstances and children.

The consequences for the family of the Husband are wide ranging.

Not only are they grieving, but they are also likely to lose his assets which they had been conditioned to think that they would retain – after thinking he had sorted it all out with his former Wife.

The comment in the article concerning the new de facto spouse is an interesting one. Readers with legal knowledge will no doubt have picked up on the tactics in play – given that the general rule in family provision claims is that the estate bears all parties’ legal costs. Unless that general rule is displaced, the estranged Wife should be encouraged to settle the case so as to avoid the equity in the estate being eaten up by legal costs. This should mean a payment ought to be negotiated in favour of the de facto spouse to avoid the impact of the legal costs.

The moral of the story here, is to ensure you have properly resolved and documented your matters and your Will, so as to avoid issues for your loved ones and family who will not doubt be grieving upon your death and ought have the expectation that you will have updated your affairs to provide them with certainty and sensible foresight.

All the best.