The Entangled Entitlements of Family Law Litigants
The extent of the interaction between Family Law and Estate Law is not always apparent, but as complicated family situations evolve, the forced and at times uncomfortable synthesis of the two becomes painfully evident. Like vapour from a brewing pot of family ties and personal relationships, gradually a competing set of legal entitlements emerge.
Both Family Law and Family Provision claims are based on the relationships of claimants to the deceased. Given that humans are capable of creating weird and wonderful (and often entangled!) webs of human relationships, it would be naive to expect that law based on such convoluted fact scenarios could be simple.
Consider the following scenario:
- Sarah meets Sam. Both are in their 40s and have children from previous relationships.
- They live happily together for 25 years, after which they separate.
- Sarah and Sam begin property proceedings in the Family Law Courts.
- 6 months into the proceedings, Sam dies of an unexpected heart attack. Sam’s grieving (but surprisingly zealous) Legal Personal Representative agrees to continue the family law litigation on behalf of Sam’s estate.
- The Court orders that Sarah is to receive the house that they lived in.
- There are no other significant assets left in Sam’s estate.
- Sam’s children discover that they’ve been left out of his will.
- Sam has gifted his entire estate to a charitable organisation.
- Sam’s children make a Family Provision Claim against Sam’s estate.
Sarah is lucky to have started Family Law proceedings before Sam’s death. Proceedings usually cannot be initiated after the death of a party although in some circumstances, the Court may make an order to set aside an existing order and make new orders in their place.
If Sarah had failed to commence Family Law proceedings, she would have had to make a Family Provision Claim against Sam’s estate. If this occurred, the Supreme Court would have been obliged to consider her interests as a claimant in conjunction with the competing claims of Sam’s children and the existing beneficiaries in Sam’s will.
Having started proceedings in the nick of time, Sarah now has some advantages up her sleeve.
- Firstly, the Family Law Courts are not necessarily obliged to consider the interests of beneficiaries in Sam’s Will when determining what a just and equitable property settlement would be.
- Secondly, the fact that Sam has died becomes a relevant factor that can be considered by the Court. The fact that one party to the relationship has died, whilst the other has survived, almost always leads to the conclusion that the surviving partner has continuing maintenance needs whilst the deceased partner has none.
The outcome of the Family Law proceedings have made a drastic impact on the Family Provision claim prosecuted by Sam’s children. With one set of assets at the heart of both proceedings, where there is a winner there must also be a loser.
At the moment, the law is clear, where Family Law proceedings determine the assets available for distribution through the deceased partner’s estate, the Family Provision claim must wait (Harry & Harrision & Ors  FamCA 457), even if this means that there is nothing left for the Family Provision claimants to receive!
Call 13 43 63 to speak with one of our family law experts or accredited specialists in New South Wales. Our offices are in Sydney, Parramatta, Campbelltown, Newcastle, Penrith, Wollongong and Gloucester.