Surviving spouses attacking the estate of the first to die: Breaking it down (again)**

Last week's post considered the case of Sarant v Sarant [2020] NSWSC 1686.

The decision expressly also stated that in family provision applications (or testator family maintenance claims) the 'principles' or 'general principles' set down in previous decisions are not intended to be elevated into rules of law, propositions of universal application, or be viewed as a rigid formulae.

In other words, the jurisdiction of the court should not be unduly confined and the discretion should not be constrained, by statements of principle found in aspects of other decisions that are not at the core of the case, or by preconceptions and predispositions.

Ultimately then, decisions of the past do not, and cannot, put any fetters on the discretionary power of the court, which is left largely unfettered. That is, what is provided via previous cases is a guide and should not be used to turn a judge into a tyrant.

With the warning immediately above, the court did however make the following comments in relation to a claim by a spouse, particularly of a marriage of long duration, that it said were useful to remember:

1. A spouse, particularly of a long marriage, has a primary right to be considered by the deceased, but the extent that they should provide for the surviving spouse is to be governed by their needs, both at present, and in the foreseeable future and also the needs of any competing claimants.
2. The capacity of the surviving spouse to provide for those needs must also be considered.
3. The general duty of the deceased to the spouse, to the extent to which their assets permit them to do so, is to ensure that the spouse is secure in the matrimonial home, to ensure that they have an income sufficient to permit them to live in the style to which the spouse is accustomed, and to provide the spouse with a fund to enable them to meet any unforeseen contingencies.
4. Generally speaking, the amount should be sufficient to free the mind of the spouse from any reasonable fear of any insufficiency as they grow older and their health and strength fail (see Permanent Trustee Co Ltd v Fraser (1995) 36 NSWLR 24 and Elliott v Elliott (Court of Appeal (NSW), 24 April 1986, unrep).
5. Concern as to the capacity of the spouse to maintain themselves independently, and autonomously, may also bear upon the notion of what is proper provision (see Richard v AXA Trustees Ltd [2000] VSC 341).
6. Where, after competing factors have been taken into account, it is possible to do so, a spouse ought to be put in a position where they are the master, or mistress, of their own life, and in which, for the remainder of their life, they are not beholden to beneficiaries (see Langtry v Campbell (Supreme Court (NSW), Powell J, 7 March 1991, unrep).
7. Greater weight may be given to the claims of parties who have entered 'a formal and binding commitment to mutual support' (see Marshall v Carruthers; Marshall v Marshall [2002] NSWCA 47, In the Matter of the will of G.G. Sitch (deceased) [2005] VSC 308 and Sellers v Scrivenger [2010] VSC 320).

Thus, in Steinmetz v Shannon [2019] NSWCA 114 the second wife of the willmaker (who had spent the majority of their adult life together) was awarded by the court a legacy of $1.75M, out of an estate of $6.8M otherwise left to the adult children of the willmaker from an earlier relationship. This provision replaced the gift under the will of an indexed annual annuity of $52,000 for the remainder of the surviving wife's lifetime.

The court specifically confirmed:

1. A key issue is how freedom of testamentary disposition is to be factored into an assessment of whether the provision made by a willmaker is adequate for the proper maintenance, education or advancement in life of a claimant.
2. The determination of the adequacy of the provision of a claimant is a matter for the court and it is to be determined as at the time the court is considering the application, rather than as at the time the willmaker made the will - this point alone may provide a reason for interference.
3. The rules the court apply should not be confined by notions of 'reluctance to interfere with freedom' of willmaking (see Slack v Rogan [2013] NSWSC 522).
4. In applying the rules, a court may consider what the outcome would have been under a matrimonial property adjustment under the Family Law Act. This is because, although the regimes are not identical, there is a substantial overlap.
5. Furthermore, there is neither social sense nor legal logic in parallel regimes that would have the consequence that a surviving spouse of a relationship which endures is left worse off than would have been the case had there been a separation immediately before death. That is, it should be assumed that the community expects a willmaker to provide for their spouse financially in a manner that is no less than the entitlement that would have arisen on a matrimonial property adjustment.

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** for the trainspotters, the title today is riffed from the Tears for Fears tune ‘Break it down again’.

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