Case Studies
The ‘Husband’?
James and Eleanor had been in an on-again, off-again relationship for 25 years. As a mature couple who had been in relationships before, they each valued their independence and maintained their own homes and separate finances. However, they spent most nights together, socialized as a couple and were committed to a joint life together. On a trip to Bali, they committed to each other at an informal beach ceremony, and Eleanor wore a ring James had given her on a necklace as a momento.
Eleanor was estranged from her son, but had a close relationship with her grandchildren, being the children of her daughter, who had tragically died quite young. Eleanor wanted to provide for these grandchildren, as she felt they needed her financial support, whereas James was financially comfortable, and she had not seen her son in over 20 years.
Eleanor passed away unexpectedly, with no Will. James applied to administer her Estate, saying he was her domestic partner. Eleanor’s son (Thomas) disputed the status of the relationship, and claimed that he should receive the full estate as the sole surviving child.
Although we are very happy to help families left in this unfortunate situation, and litigation such as this is a big part of the work we do, at Olivetree Legal, we would prefer to help prevent this problem. Throughout this litigation process, James and Thomas were at loggerheads with each other, each claiming the other was the “bad guy” in the situation. Sadly, the true cause of the problems was Eleanor – careful planning and legal documentation could have helped avoid a lot of conflict.
The ‘not-quite-ex’ Husband
Elliott and Grace were separated for twenty years when Elliott heard from a friend that Grace had recently passed away.
Elliott sought advice from us and we let him know that, as they were never divorced and Grace had not made a Will, he was entitled to receive 100% of her estate and superannuation. We assisted him with these claims, and Elliott was a very happy client, but we do feel for the memory of Grace, who may not have been too pleased with this outcome. If Grace had prepared a Will, she would have had control over how the assets passed upon her death.
The Ex Husband
Clara endured an acrimonious divorce after many miserable years dealing with her husband Edward’s gambling addiction, and after a huge family law battle she was awarded primary care of their two young children. The children had very limited contact from Edward, who had instantly re-partnered and started a new family. Clara unexpectedly passed away without having made a Will, understanding that her estate would pass between her children under the law of intestacy. However, Clara did not realise that, as the surviving parent of the children Edward gained full control of the inheritance to manage on their behalf.
It is sometimes surprising how many people who really need Wills just don’t get around to making them. We work with families to help with the estate administration process, and assist with creating tax effective structures for the beneficiaries where possible (through superannuation death benefits trusts, and estate proceeds trusts), but ultimately the best outcomes can be achieved with forward planning. For some of our clients, the most important decision is who they put in control of decisions, and of assets, if they lose capacity or pass away.
The Blended Family
Alexander and Elodie are a couple who have been in a relationship for ten years. Alexander has an adult son (Benjamin). Elodie is around 10 years younger than Alexander, and also has a son, Dante, from a previous relationship. Dante is 21 and has an intellectual disability. He lives with Alexander and Elodie, and is likely to need support for his lifetime. Alexander and Elodie also have a 16 year old together, Fletcher. They want to ensure that all 3 of the boys are ‘looked after’, but Elodie has concerns that Benjamin may want his inheritance as soon as Alexander dies, and may try to remove her from the home.
There is a lot to consider here, but most importantly it’s important to note that there are options. The couple need to weigh up their priorities and make the choice that works best for them. They may decide to put their home in joint names, so that (noting they live in Victoria, and may not be the same elsewhere) it passes directly to the survivor of them outside of the Will. This would give the survivor absolute ownership, which means that there are no restrictions on what they can do with the home after the first partner has died. Not everyone is comfortable with this, and some people prefer to hold the home as tenants in common, so that each of them may outline in their Will how their share of the house will be handled after their death. There are pros and cons to each of the ownership options, which Alexander and Elodie need to understand in order to make an informed decision about their Wills.
Elodie is also very concerned about how and where Dante will live if she passes away. She would like to put detailed plans in place so that the people left behind will have all the information necessary to make the transitions as smooth as possible for Dante. She is also thinking about the best structure for Dante’s inheritance, as she has concerns about the possibility of him losing the disability pension if he inherits too much, as well as someone taking advantage of his trusting nature.
The couple are both confident that, ultimately, Fletcher will have the capacity to make his way in the world, but if they were to both pass away in the next few years, they would want him to be able to stay in the home, continue to attend his school, and have his expenses paid for. Alexander notes that he paid Benjamin’s private school fees as well as his way through an undergraduate university degree, providing housing, Uni fees, and financial support so that Benjamin didn’t need more than a casual job at the local pizza shop for some spending money while he focused on his studies.
It is important for Alexander and Elodie to consider how they hold their assets (joint names, separately, in trusts or with superannuation funds), and the best way to benefit each of their intended beneficiaries. Having the right information is a critical tool to help them make these very important decisions.