What provision should a testator make for a spouse? As always in this area of law, the answer is ... it depends.
We encounter many cases of what the court describes as 'blended families'. That is when a testator with children from a first marriage and a spouse from a second marriage seeks to provide for them both.
To whom does the spouse owe a duty and what is the extent of that duty?
Blended families have been particularly problematic for the courts throughout the years. The courts often consider the deceased’s primary responsibility as being to the surviving spouse rather than adult, able-bodied children who have an earning capacity. If there is sufficient money in the estate after the spouse has been provided for, the children's needs will then be considered.
So what is adequate provision for a spouse?
Guidance can be obtained from the oft-quoted case of Luciano v Rosenblum, in which it was said:
“ ... the duty of a testator to his widow is, to the extent to which his assets permit him to do so, to ensure that she is secure in her home, to ensure that she has an income sufficient to permit her to live in the style to which she is accustomed, and to provide her with a fund to enable her to meet any unforeseen contingencies.”
It is therefore reasonable to argue that a spouse or de facto spouse of a deceased person should be provided with the following:
1. An unencumbered home.
2. An income similar to that to which he or she is accustomed.
3. Money in the bank.
It is not uncommon for a testator with a blended family to try to resolve the problem by providing their spouse with a 'life estate', that is, the right to live in the property as long as they wish, and then allow it to pass to his or her children upon the death of the spouse.
But some case law says a life estate is insufficient provision for a spouse because he or she should be given the freedom to change residence if they choose. An elderly widow or widower is likely to want to move into a nursing home and should have the freedom and available assets to do so.
The problem with that approach, however, is that giving an elderly spouse unfettered ownership of a residential property leads to a scenario where an entire estate passes to that spouse's beneficiaries on his or her death in favour of the deceased's children.
The court has sought a way around this dilemma by making what is known as a 'Crisp Order'. This is an order of the court wherein a charge is made over a residential property, giving an elderly spouse the right to live in the propery or move to a nursing home if necessary, while the property itself (or monies leftover from the sale of the property after nursing home expenses) reverts to the children.
Bear in mind:
In considering what provision the court ought to provide for a spouse or de facto they will consider the totality of the relationship involved, not just the length. For example, a wife of 30 years who raised the deceased's children will likely require a greater level of provision than a partner of a much shorter duration.
In some circumstances it may be appropriate that a widow be left with something less than a full interest in a home. For example, when the estate is small, there are competing children with need and the spouse has a short life expectancy.
The law provides for people according to their requirements and not to reward past services or compensate for past losses.
You need to exercise caution when considering other cases because the breadth of facts to take into account is wide, factual circumstances of each cases vary widely and no two cases are alike.
There are no hard and fast rules to adopt. While the legislation in each state outlines the court’s basic considerations, in practice the facts vary widely.
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