Law Talks Episode: Who inherits? Navigating estate disputes in blended families and late-life marriages

Robyn: Good morning and welcome to another edition of 4CRB’s Law Talks. And for our topic today, we will be discussing estate disputes. And more specifically, who has top priority to inherit from an estate following the death of a loved one, particularly when you have a blended family scenario.  There was a recent news story that we will discuss that shines a light on the rights of a spouse in an inheritance claim and why they are considered at the head of the pecking order when a dispute over an estate arises.

And I’m joined today by Attwood Marshall Lawyers Estate Litigation Special Counsel, April Kennedy. Thanks for being here, April. 

April: Thank you for having me Robyn.

Robyn: Well, let’s start with this news story and the headline read: My father married a merry widow  who boasted at their wedding she’d already buried two Husbands. Five days later Dad was dead and she inherited everything. April, can you tell us a little bit about this compelling story? 

April: I can. It has quite an intriguing and ominous headline, as a start. So, this article was published in August last year. It’s told by the daughter of a man who had, obviously passed away and he accumulated significant wealth during his lifetime and 45-year banking career.

To the surprise of his children and other family members, this man married or remarried at the age of 83 years old and just five days after the wedding as the headline states, he died. It was a shock to the family. So, this father’s newlywed wife, despite being a stranger to the family, was actually someone known to the deceased.

It was I think his childhood sweetheart. But, she walked away with her new husband’s entire estate and his children from his previous marriage or a lengthy marriage were left with nothing. So, they didn’t even receive sentimental items that belonged to their mother, which I believe included China collections, and other collectibles. And so in the article, the father is described as being the victim of a predatory marriage.

So, this article really does bring up some interesting perspectives, as to who is entitled to benefit from an estate when a loved one passes away. And, what does that look like when someone enters a new marriage or relationship later in life, say at 83 years old, and there are children from a previous relationship, who is entitled to receive what?

It’s a difficult and a heart wrenching situation that many families’ face. And unfortunately, we have seen this type of scenario quite commonly.

Robyn: Yeah, it must be just heartbreaking for, excuse me, the children in that situation. And in a scenario such as this one that we’ve just discussed, how can a new spouse who may not have been married for very long inherit everything, potentially leaving out other family members who do have a good relationship with their loved one?

April: So, I suppose the short answer to that is because they are a spouse. So, where you are a spouse, you are considered the head of the pecking order. You are at the top of the line. And a spouse not, only includes a wife, it also includes a de facto partner. So, you don’t necessarily have to be married to be considered a spouse in this scenario.

But above all other persons who are able to contest a will or make a claim on the estate, spouses are generally looked upon favourably, when either they make a claim on their deceased partner’s estate or when they are receiving the bulk of the estate. And in the case that we just mentioned, it’s not clear if the father left a will that left everything to his new wife or if he, because if he didn’t have a will or if we didn’t know if he had a will, if he had a preexisting will that was invalidated because of his marriage, but what many people don’t realize is when someone marries, no matter what age, they automatically, or any will that they have previously made is automatically revoked.

So, that’s unless there’s a clause in there about their impending marriage, but if not, then their previous wills that might have left everything to their children or other beneficiaries whom they wanted to leave to, is revoked. And then they are left in a position where they are considered, or may be considered intestate, where they, they’ve passed away without having a valid will.

And when there is no will, or when the will is revoked, then the Rules of Intestacy apply. So, the Rules of Intestacy are a statutory formula which govern the distribution of an estate in circumstances where someone has passed away without a will. And the rules will determine who will benefit from that person’s estate.

Under the Rules of Intestacy, the new spouse may receive all or the bulk share of the estate, even if the marriage is only, has only been very short lived. Like for instance, in this situation, it was five days. So, to give you an example of this, it really depends on the, I suppose the family tree. If you have a blended family, that’s where it gets a little tricky.

So, say in this situation, for the story, the storyline that we’ve just, heard, if that person passed away in Queensland, then his new wife would receive the household contents or their chattels. They would receive a statutory legacy, which in Queensland is $150,000.

And then they would receive one-third of the balance of the estate and the other two-thirds would be shared with the children of the deceased. So, it’s not quite as unequitable as the situation of the story that we just heard. But in New South Wales, it’s a similar formula. The contents or the chattels go to the wife or the spouse or the husband and the spouse receives a statutory formula, which is based on a formula in the succession law in New South Wales. It is about five or six hundred thousand dollars. And then they receive one half of the balance of the estate and then the other half is shared equally with the children of the deceased.

That’s if this is a blended family, but if they had children that they shared together then it’s different. There’s different circumstances. So it really depends on what your family circumstances are when you pass away.

Robyn: April what will a court look out when determining who should receive what if a surviving spouse and adult children get into a dispute over a will and the estate?

April: So, the court’s role in this situation is to balance the needs of the persons to whom the deceased had a moral obligation to provide for, and that is against the deceased’s wishes or the rules of intestacy. So, the court needs to look at what are the needs of the spouse, of the children, of any person who is dependent on the deceased versus what their will says, or what the rules of intestacy say. So that’s what they need to look at. The court takes into consideration the deceased’s wishes, if there is a will, but each case is different, and it depends on the circumstances of that matter. There’s no cookie cutter way to determine the outcome of a claim against an estate.

It’s decided on its facts and…

Robyn: case by case basis..

April: case by case basis, yeah, that’s right. So, the spouse is the head of the pecking order, especially if the spouse was financially dependent on the deceased and generally spouses are dependent on each other or they are interdependent on each other. But where a will, where there’s a dispute about the will or someone seeking further provision from the estate where they haven’t been left anything the court will look at whether the person is able to make the claim so if they’re eligible to and that’s generally the spouse children or dependent.

Robyn: Yes.

April: They’ll look at the size of the estate, whether it’s large enough to provide for the claim so you know, when you’re looking at an estate that’s less than $500, 000, that’s considered a modest estate.

So that needs to be considered. The financial situation of the applicant, and if they have financial needs, that is considered. So, is the applicant very wealthy? Then that’s going to be a consideration as to whether they need any provision from this estate if they’re able to provide for themselves.

And they’ll look at the relationship, they’ll look at issues of estrangement, so they’ll look at how long that estrangement was for. What caused the estrangement? Who was the cause? Was the deceased the cause of the estrangement or was the applicant the cause of the estrangement? And that’s generally referring to children.

If they need to look at the type of support that the deceased gave to the applicant or vice versa, so did the deceased already give an inheritance to the person making a claim on the estate? That’s something that will be considered. You hear a lot of stories about their parents giving or buying a house for their child early on and saying to them, that’s your inheritance, and don’t look to the estate for anymore. So that will be considered as well. And there’s also consideration of the applicant’s conduct. Were they abusive? Did they have a history of abuse towards the deceased? And is that a factor as to why they have not been provided for in the will?

There are a number of different things the court will look at. They’ll also look at the beneficiaries. So, who did the deceased want to provide for? That’s a very strong consideration because the deceased turned their mind to who they wanted to provide for and that needs to be considered as well.

So, it’s all, it’s very discretionary and that’s why it’s hard to determine the outcome. 

And the court will consider a number of different factors when deciding whether a claim is going to be successful, whether somebody has been given adequate provision or not.

Robyn: What advice would you give to families to avoid these disputes in the first place, particularly blended families where there might be children from a previous relationship and a new spouse?

April: So I think the key takeaway for situations like this, is it’s really down to communication and planning. So what we tend to find in a situation like the story we just heard about is that people can be very secretive towards the end of their life, or they don’t want to upset the family members they have, or they don’t want to upset their partner, when considering their own estate planning.

But it’s really important for people to have these open conversations about their wishes, including their wills and not only the distribution of their wills, but also about what they want, what they want to happen to their body after they pass away. So conversations about ashes and, cremation, because that’s another area that causes a lot of grief for the remaining family is who is going to get, say, the ashes or who do they belong to? Or is the spouse going to keep them and not give a share? There’s a lot of different arguments that come up. And, it’s just important to one, communicate with your family, but to plan. So update your will when your circumstances change, or at least give some consideration to your estate planning as a whole.

Go and visit an experienced lawyer who will be able to give you advice about how to properly structure your will, especially when there is a blended family, you really need to get good specialist advice to put in place the best strategies to avoid or minimize any claims that might be made against your estate after you pass away.

Like we’ve said before, estate disputes can really take their toll on the remaining family.  And, you know, a lot of people tend to say, Oh, well, I’ll be, I’ll be gone. I’ll be gone. Let my family fight over it. And it can really take its toll on the family that you leave behind because they’re not, they’re left dealing with the scraps.

They are there dealing with the outcome of those decisions and the costs and they’re not able to properly grieve. So, I always recommend go and visit a lawyer who can help you navigate that, but also communicate with your family about these things.

Robyn: Yeah. It’s really not the kind of thing that you want to be dealing with off the back of losing a loved one. Thanks for your advice today, April. 

April: Thank you for having me, Robyn.

Robyn: You’ve been listening to Law Talks here on 4CRB, which you can hear every Friday morning from 9 o’clock.