Relationship Property Agreements are Essential

Brian and Mary (not their real names) wanted to ensure that their wishes would be met in the event that they separated or died.

They were aware of the 50/50 sharing provisions of the Property Relationships Act and wanted us to ensure that their wishes were not overridden by that Act.

They had both been in previous relationships and were mindful of the competing obligations they had to each other and to their own children from those previous relationships.

In a nutshell they wanted to make it clear that certain assets were Brian’s, certain assets were Mary’s, others were joint and they wanted to provide each other with security of residence in their house in the event that one of them died.

Their wishes were sensible and they were in clear agreement about how they wanted these issues to be dealt with in the event of separation or death.

An agreement was drafted to allow for all of this.  Despite great efforts to keep this project moving and to get an agreement signed (along with the necessary new Wills) Brian and Mary did not consider it to be their most pressing issue and several months elapsed.

Then Brian died unexpectedly of a heart attack.  The agreement or their new Wills had not been signed.  Disaster had struck.

Mary, who was less well off than Brian, received nothing under the provisions of Brian’s old will.

As his de facto partner she was required bring a claim against his estate under the Property (Relationships) Act and under the Family Protection Act in order to get what she felt she was entitled to out of his estate.

At a time when she was least able to cope with the emotional and psychological strain of dealing with Court proceedings she was pitted against his (previously amicable) children in what would become a bitter and long running dispute lasting many years.  Brian’s estate was unable to be administered during this period.

At the end of this terrible ordeal Mary was awarded a half share in the family home, a half share in some other assets which were declared by the Court to be relationship property and a further sum under the Family Protection Act for her maintenance and support.

Because it had been necessary for her to bring the Court proceedings and the Court considered that Brian’s children had been excessively greedy and difficult the Court also awarded her “costs” (although these were only a fraction of what she actually paid in legal fees) which came out of the estate funds. 

Ultimately, Mary received slightly more than what Brian and Mary intended her to receive but had paid a huge amount in legal fees.  The emotional and physical strain of the whole ordeal has left her visibly drained.

Brian’s children received far less than they would have otherwise received out of the estate had the agreement been signed due to the enormous cost of this litigation. 

The once amicable, even caring, relationship between Brian’s children, Mary and Mary’s children has become one of extreme bitterness.

Sadly in our firm we see family separations and deaths on a weekly basis and situations like this are common.  New Wills may cost you several hundred dollars and a complex property relationship agreement will cost even more.  But we see clients every week who truly wish they had got around to it.

Brian was only 46.

This article has been prepared by Cavell Leitch Law for general information purposes only and important exceptions and other relevant factors may not have been included.  If understanding the legal area covered by this article as it affects your specific circumstances is important to you then please contact us for a proper legal opinion.