A family provision claim is an application to the Supreme Court of NSW for a share or a larger share from the estate of a deceased person.
To make an application for a family provision order in NSW, an individual must first establish that under the law, they are an “eligible person.” Section 57(d) of the Succession Act 2006 (NSW) provides that a “former spouse” is an eligible person and, in certain circumstances, may acquire a benefit from their ex-partner’s Estate.
For a former spouse to be successful in a family provision application, the former spouse must demonstrate that there are “factors” that warrant the making of the application. In this regard, the Court will have regard to a number of factors, including:
- the nature and duration of the relationship between the former spouse and the deceased;
- the obligations and responsibilities owed by the deceased to the former spouse;
- the former spouse’s financial resources and needs;
- whether the deceased and the former spouse had any children together (and the children’s age and needs);
- the former spouse’s physical, intellectual, or mental capacity;
- the formers spouse’s contribution to the deceased’s estate, or their welfare;
- any benefit the former spouse has received from the deceased’s estate during their lifetime; and/or
- any orders and/or agreements made in family law proceedings;
In the NSW decision of Lodin v Lodin; Estate of Dr Mohammad Masoud Lodin [2017] NSWSC 10, the Court considered a family provision application made by a former wife. In this matter, the deceased was a doctor who had separated from his wife after two years of marriage and one child together.
The couple’s divorce was finalised five years after separation and orders were made by the Family Court in relation to the property settlement. As part of those orders, the wife received a 38% share of the asset pool (a total sum of $164,500).
In 2014, the deceased died leaving an Estate worth approximately $5,000,000 to his only daughter, being the child he shared with his ex-wife.
The ex-wife applied for a family provision order against her ex-husband’s Estate on the basis that she was an eligible person and her circumstances warranted a family provision order. At first instance, Brereton J of the Supreme Court of NSW ruled in favor of the ex-wife and ordered that she be paid $750,000 from her ex-husband’s Estate.
In his judgement, Brereton J said that at [99]:
“The unusual and enduring impact of the relationship and marriage with the deceased on the plaintiff, and its contribution to her current circumstances of need; the respective post-divorce deterioration in her circumstances, and great improvement in those of the deceased; the impact of her care responsibility for the defendant, for 15 years after the matrimonial property settlement, on her earning capacity, and her corresponding indirect contribution to the deceased’s estate; and the relative paucity of the matrimonial estate at the time of the property settlement, compared to the amplitude of resources now available; all in circumstances where the only other claim on the deceased’s testamentary bounty was that of the defendant, for whom ample estate will remain after making proper provision for the plaintiff; together amount to circumstances which made the plaintiff, at the time of the deceased’s death, a person who ought to have been an object of his testamentary recognition, and thus constitute circumstances warranting the making of her claim.”
However, the decision was later overturned by the Court of Appeal of NSW on the grounds that:
- the deceased had continued to meet his child support obligations after the separation;
- the relationship with the ex-wife had ended many years ago and had only lasted for a short period;
- the former spouse’s disabilities and financial circumstances were caused by other factors (a previous motor vehicle accident); and
- there were property orders made in the family law proceedings when the divorce was finalised.
The Court of Appeal’s decision demonstrates that a former spouse is not normally regarded as a natural object of testamentary recognition, unless it can be shown that there is a social, domestic or moral obligation for the deceased to provide for them.
In the matter of Lodin, because the Court of Appeal recognised that the financial affairs between the deceased and his former spouse had been resolved by the property orders made by the Family Court in 1992, the Court of Appeal accepted that the deceased did not have an obligation to continue to provide for his former spouse.
The decision of Lodin highlights that a property settlement in the Family Court is an important factor that the Court will consider when determining a family provision application. However, a previous property settlement order and/or agreement is not conclusive, and the Court may still use its discretion when considering if there are other circumstances that may give rise to a family provision application made by a former spouse.