A Spouse, a De facto & Intestacy

Brian Palombo died, suddenly and unexpectedly, at the age of 55 in October 2018 without a Will. Brian married Gail in March 1983, migrated to Australia in 1985 living with his parents at their home in St Clair (the St Clair property). Moving to their own home in St Clair in 1986, Brian and Gail raised three children, Ashleigh, Emma and Kristy.

Brian and Gail separated in about July 2010. Immediately before their separation, they had lived together in a property at Emu Plains, Gail continues to reside in the Emu Plains property. Following their separation, neither Brian nor Gail, initiated, negotiated or applied for a property settlement or entered into a Financial Agreement, under the Family Law Act 1975 (Cth).

Jacqueline Bailey met Brian in 2011 she had separated from her husband in 2010 and they divorced in 2013. Brian’s mother died in September 2010; when his father died in July 2013 Brian purchased the St Clair property from his father’s estate. Jacqueline has remained living in the St Clair property, which is still registered in Brian’s name.

Chapter 4 of the Succession Act 2006 (NSW) (“the Act”) provides the order in which your eligible relatives will inherit your estate if you die without a will.

A spouse is defined as person who was married to, or was a party to a domestic partnership immediately before the death of the intestate -which may include a de facto spouse. If the intestate leaves more than one spouse and children who are all issue of one or more of the surviving spouses, the spouses are entitled to the whole estate in shares determined by the Act in accordance with inter alia a distribution order of the court.

In May 2019, Ashleigh’s application for a grant of Letters of Administration was rejected as she had no “interest” in the deceased’s estate. On 11 June 2019, Jacqueline lodged a caveat requiring that

“[n]o grant of Letters of Administration be made in the estate of [the deceased] … without prior notice to me”.

The Court was satisfied the St Clair property, owned solely by the deceased, at the date of his death, forms part of Brian’s intestate estate. Gail is a spouse as she was married to Brian immediately before his death and there had been no divorce order made to dissolve their marriage.

Similarly, Jacqueline and Brian were not married to one another or related by family; their relationship wasn’t a registered relationship, within the meaning of the Relationships Register Act 2010 (NSW) and had not resulted in the birth of a child. However, the Court was satisfied that Jacqueline and Brian were in a de facto relationship for more than two years, and although Brian was the sole registered proprietor of the St Clair property, Jacqueline treated it as her home.

Section 126(3) of the Succession Act 2006 (NSW) provides the Court with the ability to distribute Brian’s estate between Jacqueline and Gail in any way it considers just and equitable.

The Court took the view that a distribution order which provides Jacqueline with the St Clair property, unencumbered, (the St Clair property was security for two loans that are liabilities of the deceased’s estate) and a lump sum of $500,000, would ensure that she is secure in accommodation, enable her to discharge the mortgage on her investment property, and still leave her with a lump sum of about $250,000 for exigencies of life. Gail received approximately $2,117,841 out of the estate and retains the death benefits that she has received.

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