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Growing Stronger Podcast Ep #27: Love, Affection, But No Money

Posted on 13th January 2022
Catherine Henry Lawyers
Catherine Henry Lawyers

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Growing Stronger Podcast Ep 27 Love, Affection, But No Money

In episode 27 of our podcast, Growing Stronger, Tanya Chapman discusses an estate case concerning a blended family – where the spouses have no children together but have children from previous relationships.

These later-life de facto relationships come with different concerns. For example, both parties will usually be older and will have accrued their own savings, superannuation, assets, and property by the time their current relationship started. They may agree that they will continue to be financially independent and that throughout their relationship they won’t intermingle their funds, they will each pay their own way and on their death, their estate will go to their children or their family. This is a sensible and reasonable decision to make. But after death, can the surviving de facto make a claim on the estate?

That’s what happened in the case that we’re covering in this episode.

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To continue the discussion join our Growing Stronger Podcast Group on Facebook. Engage in conversation with other listeners and our host, Tanya Chapman, on the cases we have covered, plus more.

Case: Wertheim v Perpetual Trustee Company Limited [2021] NSWSC 1229

Special voice actors: Rob Dilley, Sky Berzins and Beau Chapman

Note

  1. This is a brief summary of the topic and the case law covered in the episode and is not a full transcript of the recording
  2. The case discussed in the episode is a NSW case, so what we’re discussing will be based on the law in NSW and is not intended to be taken to be applied Australia-wide.
  3. While this podcast is aimed to be informative, it is not intended to be a substitute for legal advice. For any matter we discuss, we summarise, skip over parts that may be too technical and only generalise. You should still see a solicitor for complete advice that relates directly to your particular situation.

SUMMARY

This case revolves around Adrian Armytage who died on 13 October 2019. In September 2021, the Supreme Court made orders about what was to happen with Adrian’s estate.

Who was Adrian?

Adrian was born in 1934 and for most of his life worked as an automotive engineer. He married and had 4 kids – David, Jodi, Kriz and Becci. He and his wife divorced in 1986.

The applicant in this matter is Carol Wertheim.

Carol was born in 1946. She had also been married and divorced and had one child from the relationship – Emma.

Adrian and Carol first met in 1996 when Adrian was 62 years old, and Carol was 50 years old. They were both single with adult children who had already left home. They started a relationship and soon after began living together at Adrian’s unit in Hornsby.

When they started their relationship, Adrian had more money and assets and was concerned about ensuring that the assets he had acquired over his lifetime would pass to his 4 children on his death.

Adrian and Carol were together for 23 years until his death in 2019. Adrian made his last will in 2008, 11 years before his death and after he and Carol had been together for some 12 years.

In his will, Adrian left Carol with a gift of $20,000 plus the right to continue to live in the Hornsby unit for two years from the date of his death, after that she had to get out. The residue of the estate was to be divided equally among his 4 children.

When Adrian died, his estate was worth an estimated $3,163,642.

So you might be able to see why, with an estate worth more than $3m, Carol might not have been satisfied with $20,000 and free accommodation for 2 years.

She made a family provision application.

LESSONS

There were two options available to Adrian the court mentioned:

  1. A Binding Financial Agreement (BFA) – sometimes called a prenuptial agreement – can actually be made at the start of a relationship, in the middle or at the end. The agreement sets out the various assets of each of the parties and records terms of how the assets will be divided when the relationship breaks down. It can also include terms about what happens if one of the parties dies and whether the surviving party may make a family provision claim.

This is one way to get the agreement in writing. If you have an agreement like the one in this case or if you want to have an agreement like this, consider doing a BFA.

You and your partner would each need to see different family lawyers to get separate independent legal advice and there are legal costs involved. But the benefit is that:

a. You have a written record of exactly what you and your partner have agreed. This means that at a later date, it is harder for your partner to lie and say they didn’t agree or that you had a different agreement.

b. It is available written evidence should that partner make a family provision claim on your estate. It does not rely on the credibility of a witness or the ability of the witness to recall events; it holds more weight as reliable evidence in court.

BFAs are a tricky document and need to be done just right. This is why I recommend seeing a family lawyer with experience with BFAs.

  1. Consent Orders

These are even better than a BFA because they are already court approved.

If you and your partner reach an agreement – for example, an agreement like this one “I won’t make a claim against your estate, and you won’t make a claim against mine” – you can take that agreement to the court and ask the court to make them into orders which are called Consent Orders. The Orders are legally binding and prevent a party from making a claim later.

Again, getting these orders right can be tricky, so it is best to see a family law professional. My family law colleague, Rob Dilley, says:

“Consent orders provide the seal of the court as a way of finalising the property matters at the end of the relationship. This means that a Senior Registrar has examined the orders and assessed them independently of the parties’ representatives and has done so through the filter of the law. If the court signs off on the orders and seals them then they are far more difficult to overturn. Consent orders are the most secure way to finalise your property matters. To re-open a matter once settled by consent there would have to be very exceptional circumstances to warrant the courts’ attention.”

As mentioned earlier, these can be expensive. Around $5,000-$15,000 depending on the complexity of the matter. You need to weigh that up against how much a family provision claim might cost you. Adrian could have completed Consent Orders while he was alive to ensure that his estate went to his children. Let’s say it cost him $10,000 to get the orders. Now look at the legal fees associated with Carol’s family provision claim – all up it cost the estate about $230,000. And when I say it cost the estate, really what I mean is that’s how much Adrian ended up paying since it came from his assets.

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