Legal Tip 310: Death without Divorces Formalised

When people get married, they remain married until a divorce is finalised. Without the divorce they are still spouses even if they don’t live together and even if either or both of them are in a defacto relationship with others.


This means that at death the ‘former’ spouse is still a husband or wife and will still have claim of the estate under Family Provision and/or intestacy laws


Example

Homer and Marge decide to break up. But they still remain friends. Homer enters into a defacto relationship with Ned, with Ned living in Homer’s house as his spouse.

Homer has never divorced Marge as she never asked him to and it all seemed a bit complex. But they did do an informal property settlement with Marge taking half of the assets and Homer the other half.

During a scrabble game Homer dies of a spider bite.

Homer didn’t have a will.

Under NSW Homer has 2 spouses. Marge is his legal spouse and Ned is his defacto spouse. They have equal standing and must share Homer’s assets

If Homer left no children Marge and Ned would get 50/50 of his estate each. Since Marge already got ‘paid out’ she would be double dipping sort of.

But there is some scope for the spouses to negotiate with each other.

see:
S125 Succession Act 2006 NSW.
SUCCESSION ACT 2006 - SECT 122 Spouses' entitlement where there are more than one spouse but no issue

 

And super laws may also deny Marge any interest in Homers super death benefit (incl insurance). Ned could get it all and leave Marge and Homers 3 adult kids with nothing from his accumulated super from the power plant

Reason : Super laws refer to dependants. Only tax law refers to a former spouse.

• the deceased's spouse or de facto spouse [Ned]
• a child of the deceased (any age) [Ned may be given priority by the trustee]
• a person in an interdependency relationship with the deceased
  • this is a close personal relationship between two people who live together, where one or both provides for the financial, domestic and personal support of the other. [Ned again]

The trustee of the fund need to determine who it pays - A dependant or the estate. Ned gets good legal support and makes a claim for a death benefit. If Homer had no nomination, or it was invalid. Homers not bright so he never checked. He just assumed his will would address this.

Marge doesnt live with Homer and fails the above eligibility. Homer would need to ensure his super nominations clearly specify his super goes to his estate. Marge may have claim on the estate if a property settlement wasnt finalised.