Tuesday, October 4, 2022

Parents joined to a child’s family law dispute (for no reason?**)

Anecdotally, there appears to be an increasing number of situations where the parents of a spouse are forcibly required to provide disclosure of their personal arrangements as part of their child’s property settlement proceedings.

Arguably, the highest profile case in this regard was MacDowell and Williams [2012] FamCA 479.

In this case, the parents of a woman going through a property settlement allegedly had access to wealth in excess of $20 million.

Following a marriage of around 7 years, the husband as part of the matrimonial litigation tried to get access to the wills of his former in-laws and the deed for a trust, which he believed his wife was a primary beneficiary of.

Acknowledging that each situation would depend largely on the facts, the court in this case decided:
  1. While the husband could get a copy of the trust deed, the court flagged it was unlikely that the trust would be taken into account in any form under the property settlement (i.e. it would be treated neither as an asset or a financial resource), given that the wife was only one of many potential beneficiaries and had received less than $30,000 of distributions from the trust during the entire marriage;
  2. The wills did not need to be disclosed on the basis that the parents had full testamentary capacity and may change their wills, or indeed, may otherwise spend or dispose of a substantial part of their wealth; and
  3. The privacy of the parents’ personal affairs was seen as an important factor in denying access to the wills and estate planning documents.
Interestingly, the court did however note that if the wife’s parents had lost capacity or they were in extremely poor health, then it may have created a situation where the wills would be required to be disclosed.

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** For the trainspotters, the title of today's post is riffed from the Church song 'It’s no reason'.

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