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Estranged Spouse’s Claim on her Husband’s Estate was not Superior to that of Deceased’s Adult’s Children: Squire v Squire (2019)
When Richard Squire separated from his second wife, Corrine, they agreed to divide their assets equally, including the proceeds from selling the matrimonial home. Before he managed to change his Will to reflect the new circumstances, Richard died unexpectedly. His existing Will left everything to his estranged wife. As it stood, this would prevent Richard's adult children, from his first marriage, receiving any family financial provision, even though he had promised to change his Will to leave everything to them.
The case of Squire v Squire (2019) NSWCA 90 involved a successful appeal against the primary judge’s decision to not award provision under the Succession Act 2006 (NSW) against the “notional estate” of the deceased. It was decided by the Court of Appeal that the claim by the estranged spouse was not superior to that of the deceased’s adult children.
Eligible persons, such as spouses and children, can contest a Will if they believe that they have not been adequately provided for from a deceased's estate. The concept of notional estate suggests that transferred assets may potentially be included in providing towards a family provision claim.
Concerning the claim by Richard Squire's adult children, the principal issues for the Court of Appeal were:
1) whether the primary judge erred in his assessment of the wife’s financial position;
2) whether the primary judge erred in his finding that the wife had not received a financial settlement;
3) whether it was "reasonable" for the wife to expect that the deceased make a provision that would allow her to own an unencumbered property worth up to $600000;
4) whether the Court should conclude that adequate provision for the applicant children was not made from the deceased’s estate.
In his last Will, dated March 2007, the whole of Richard Squire's estate had been left to his second wife, Corrine Squire; however, if she did not survive him for 30 days, the estate was to be divided equally between his three children and Corrine's two children by her first marriage.
A couple of weeks before his unexpected death on 29 April 2015, aged 64, he and Corrine ended their 10-year relationship and both took steps to effect a permanent separation. The principal asset was a jointly held interest in the matrimonial home in the Sydney suburb of Baulkham Hills, purchased with Richard's funds in about 2007/8. The property was sold in March 2015, but settlement was only effected shortly after his death, on 7 May 2015. On his death, Corrine became entitled to the proceeds of the sale of the home. The deceased's share of the proceeds of approximately $250000 was potentially capable of being made the subject of a "notional estate" order.
Richard Squire’s children decided to make a family provision claim on their father’s estate. Claire Beech and Paul Squire, each aged in their late thirties, are two of three adult children of Richard’s first marriage. His third adult child Catherine decided not to continue with her claim. The children applied for family provision out of the “notional estate” of $85000 each, justifying their claim by reference to specific financial needs. Paul Squire sought $10000 for his wedding and $75000 to be able to enter the Sydney property market. Claire Beech wished for $25000 to support her farming business and $60000 for her three children’s schooling costs, two of whom suffered from medical difficulties.
At first instance, the primary judge dismissed their claims arguing that there remained an obligation from the deceased husband to his estranged wife, including a “moral obligation”, to provide adequate funding so that she could buy a new mortgage-free home. The judge described the wife’s claim as “superior” and was not satisfied that the children making claims had been left without adequate provision for their proper “maintenance, education or advancement in life”.
The Court of Appeal, however, considered that provision should be made for the children. The Court noted that Richard Squire had told his children that he intended to create a new Will leaving all of his estate to them. Moreover, the Court held that there was no obligation to make provision for the estranged wife, given the arrangements made, even if a court had not formalised them. By engaging in a systematic division of their jointly held assets and liabilities, the deceased and his spouse had agreed on a final settlement. This settlement terminated any obligation the deceased had to make any testamentary provision for his former spouse's maintenance or advancement in life. Given the economic and social circumstances, the wife could reasonably be expected to live in much more modestly priced permanent accommodation than an unencumbered property worth up to $600000. At the time of the deceased's death, the natural objects of his "testamentary bounty" were his adult children. The deceased's half share of the sale proceeds should be designated as notional estate to enable the claims of the children to be satisfied.
What does it mean?
A family provision claim is where a party makes an application to the Court for a portion, or a larger portion, of a deceased person's estate. It is important to obtain legal advice before making such a claim.
This particular case demonstrates family provision claims can cover a broad spectrum of circumstances and financial need.
It also emphasises the importance of renewing a Will without delay when there has been a change of circumstances.
If you think that you have grounds to make an application for a family provision claim, it is important to act as soon as possible as time limits apply.
Contact our Wills and Estate Lawyers in Sydney, NSW
Szabo & Associates Solicitors provide expert advice on all matters relating to Wills and estates. If you have been omitted from a Will, or inadequately provided for, please contact us on (02) 9281 5088 or complete our online contact form.