De facto or not?
Have you ever wondered what would happen to your assets if you died without a will? Many people assume that if they are not married and have no children that everything will automatically go to their family members such as parents or siblings.
You might be surprised, but the law is not so clear cut.
Have you been in a relationship for the past 2 years? Do you live with your partner? Have you ever filled out a form at the doctor’s office indicating that you are in a de facto relationship? Are you trying to make a life together but do not see the point in making your relationship official by marriage? If you answered yes, your partner could be considered a ‘de facto spouse’ and may be entitled to your entire estate if you die without a will.
Whether or not your partner is considered a ‘de facto spouse’ depends on the facts. Recently the New South Wales Court of Appeal reviewed a decision made by the Supreme Court of New South Wales (the Court) in which the judge found that a couple were not a de facto couple because there was no evidence of birthday cards or Christmas cards between them, there had been no sexual relationship for a number of years and they occupied separate bedrooms. The surviving partner had repeatedly told Centrelink and his doctor that he was a single man and that he was sharing a house with a lady who was a “friend”. Despite witnesses confirming the couple were in a loving relationship the judge wasn’t satisfied that the couple were in a de facto relationship but found that he was in a “close personal relationship” with the deceased when she died and he was given provision of $85,000 from the estate which was valued at around $700,000.[i] The New South Wales Court of Appeal dismissed the appeal and upheld the decision made by the judge.
In October 2017 the Court heard a case where the deceased died without a will and the Court was left to decide whether the assets should go to the deceased’s long-term de facto spouse or his mother.[ii] The Court looked at the nature and quality of the couple’s relationship and was interested in all of the intimate details. Ultimately the mother was awarded nothing and the de facto spouse was awarded the entire estate. What convinced the Court was the fact that the couple were in a close, loving and monogamous relationship, were financially interdependent, lived in close proximity (but not always together), consulted each other about decisions around renovating a home and were known among family and friends as a couple. Surprisingly the fact that they lived in separate houses did not have an effect on the Court’s decision and the Court accepted that the couple had a ‘mutual commitment to a shared life together’. These cases remind us that each relationship has its own unique circumstances. Not having a will means that there is no documentation of your intentions around the distribution of your estate, possible litigation and the Court ultimately determining who’s entitled to your assets.
Having a professionally drafted will means that you can consider the nature of your relationship, determine what gifts you want to make and get advice about reducing the risk of family provision litigation in your estate.
[i] McCarthy v Tye  NSWCA 284.
[ii] Estate Pamplin; Irwin v Pamplin  NSWSC 1477.