Attwood Marshall Lawyers Family Law Associate Laura Dolan joins Robyn Hyland on Radio 4CRB to discuss involuntary separation, a critical issue affecting many elderly couples. Unlike typical separations or divorces, involuntary separation occurs when one partner needs to move to aged care, forcing the couple to live apart. This discussion will explore the meaning of involuntary separation, its emotional and practical implications, the potential involvement of courts in property and financial matters, and why it’s a significant issue for our ageing population.
Involuntary separation occurs when a de facto or married couple are physically separated, most commonly due to health-related issues or cognitive decline. A typical scenario involves one partner suffering from dementia and needing to move into an aged care facility, with the other partner remaining at home.
For involuntary separation to occur, one person in the relationship must no longer have the capacity to decide the true state of their relationship. The key question is whether the relationship is ongoing or has ended due to the change in circumstances.
Sometimes, the relationship’s status is questioned because the capable partner might exploit the benefits of maintaining the appearance that the relationship is still intact.
These concerns often arise from the children of the individual who has moved into care, particularly when they are children from a previous relationship.
Conversely, children might take advantage by becoming involved in the personal affairs of the incapacitated individual, intending to force a separation to obtain a property settlement order and divide the couple’s assets for their own benefit or agenda.
It’s important to note that under the Family Law Act, whether married or not, the law does not require a willing separation to make property settlement orders.
The Act defines separation as follows:
1. The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of one only of the parties.
2. The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.
This means that even without mutual consent by the husband and wife, or de facto spouses, a court can intervene to settle property matters if a couple has separated, involuntarily or otherwise.
Next, we will delve deeper into the emotional and legal implications of involuntary separation, providing a case study and guidance on how to navigate these situations.
Case Study: Standford v Standford.
In Stanford v Stanford, a husband and wife were married for 37 years. Both were on their second marriage and had children from their first marriages.
The house they lived in was in the husband’s name only, and both had made Wills.
In his Will, the husband had left the house, subject to a life tenancy for his wife, to the children of his first marriage. The wife had left her assets to her children from her first marriage.
In 2008, the wife suffered a stroke and was later diagnosed with dementia.
The husband and wife’s children argued about which nursing care facility the wife should be moved to. The wife’s daughters favoured a facility that required payment of a $300,000 bond or entrance fee, which the husband did not like.
In 2009, the wife was admitted into a full-time high-care residential facility that did not require the payment of a bond.
During her time in care, her husband opened a trust account for her and deposited over $42,000 to cover her care costs.
In 2009, the wife’s daughter, as her guardian, applied to the Family Court for orders that the matrimonial home be sold, and the net proceeds be divided equally between the parties. She also applied for an order seeking that the husband’s superannuation benefits and the couple’s combined savings be divided equally.
As with all property settlements, the court looks at the assets available to both parties, the contributions they have made, and the future needs of both parties, when determining how to divide the matrimonial asset pool.
In this case, the magistrate concluded that “the overall percentage based on contributions should be split 57.5% to the husband, and 42.5% to the wife.”
The magistrate ordered the husband to pay his wife $612,931 within 60 days, determining that the division was just and equitable to ensure both parties’ future needs were catered for.
The husband, understandably, was unhappy about the outcome because it meant that he would have to leave his home of 48 years.
He appealed the decision by applying to the Full Court of the Family Court of Australia.
Unfortunately, after the appeal had been heard, but before a judgment was handed down, the wife passed away.
In October 2011, the court allowed the appeal and set aside the original decision made by the magistrate.
The Full Court determined that the magistrate had erred in several areas, not sufficiently considering the effect the orders would have on the husband, and the fact that the marriage was “intact” and the separation was involuntary.
The Full Court also noted that the wife’s needs were already being met and stated that it was “difficult to ascertain the reason why the Magistrate came to her conclusion given the wife did not have a need for a property settlement as such and that her reasonable needs could be met in other ways, particularly by maintenance.”
The outcome
The Full Court ordered that, on the husband’s death, the sum fixed by the magistrate as representing the value of 42.5% of the martial property, would be paid to the wife’s executor or legal personal representatives.
The Full Court emphasized that:
“The many years of marriage and the wife’s contributions demand that those moral obligations be discharged by an order for property settlement.”
In this case, a property settlement may not have been necessary, as spousal maintenance could have been just and equitable. However, in other cases, a property settlement may be the most suitable option.
In determining how financial and property matters should be handled, it always depends on the couple’s unique circumstances, the care and financial needs of each party, and the matrimonial asset pool.
How to be prepared
These are common scenarios we see all too often due to Australia’s ageing population and the prevalence of blended families.
As a parent, you would hope your child would not take legal recourse to end a relationship on your behalf in which you are happily involved. However, it is important to be aware of these possibilities and to try to establish a plan before this becomes a reality.
Binding Financial Agreements and a comprehensive estate plan can play a role in protecting your interests.
The first option is to establish a binding financial agreement with your spouse to set out how your finances and property will be dealt with in case of separation, including involuntary separation.
Your estate planning should also be up to date and reflect your current situation. Having an Enduring Power of Attorney allows you to appoint someone you trust to step into your shoes and make decisions on your behalf should you lose capacity to make decisions for yourself. When choosing your attorney, it is important to consider the family dynamics, and the qualities and capabilities of the person you are appointing to this powerful role.
As your health may decline in later years, it is also important to get trusted advice from financial and legal professionals about transitioning to aged care. There is a lot to consider and decisions that are made can have a big impact on your assets such as your family home, your Centrelink benefits, and your spouse.
Getting trusted advice can ensure that you have a plan in place that tackles any obstacles that may arise, before they happen, and that you are protecting yourself, your assets, and your family.
Attwood Marshall Lawyers – supporting families through difficult times
Attwood Marshall Lawyers has a dedicated family law team who practice exclusively in family law matters. The team is well-versed at assisting clients with divorce, separation, property settlements, binding financial agreements, and estate planning.
We are also one of the few law firms with a dedicated Aged Care department. Our team boasts three Accredited Aged Care Professionals who have in-depth understanding of the aged care sector and the issues many people face when transitioning to aged care.
For advice about divorce, separation, property settlements, or transitioning to aged care, please contact our Family Law and Aged Care Department Manager Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call our 24/7 phone line on 1800 621 071.
