separated or not?

Last week the High Court provided an interesting new direction in Family Law when it decided a case about a property settlement, a property settlement where the Husband and the Wife were not necessarily separated.

There's a few reasons why us family lawyers are interested in this decision and it could have some pretty big impacts on how people manage their assets in their grey years.

Distilling the wisdom of the High Court in the case which has the pseudonym "Stanford", it can provide some new approaches to how the court must consider what is fair - "just and equitable" in a property settlement.  I think of even more interest is that the case opens a gateway that in certain circumstances you don't need to be separated as a pre-requisite to asking the court to divide property between you and your spouse.

The case centred upon a couple where the Wife had a stroke and then developed dementia.  Their marriage was a second marriage for both of them, both had now adult children from their previous marriages (often a complicating factor in "grey divorces").  Although it was a second marriage, they had been married for over 20 years.

Despite the passage of time since they had married, the house in which they had lived for all of that marriage remained in the Husband's sole name.  No doubt the Wife had made contributions of both the financial and non-financial kind to that house.  The Wife had also sold the house she had at the commencement of the marriage and it would appear applied that money to their lives.

So, by the time she is in a nursing home and suffering dementia, she has no assets in her name and the house in which she had lived for the last couple of decades and was now worth a not insignificant sum, was in her Husband's name only.

Her daughter then wants her to move to a different nursing home, one requiring substantially more money than her mum has.  So, the daughter, on behalf of her mother commences a family law application seeking a property settlement, a property settlement when the Husband and Wife had not separated other than the change of circumstances arising from the Wife's change of health.

I won't muddy the waters by going into how the case got complicated because the Wife died during the appeal process (a story for another time) or on what it might mean for how courts consider property applications in the future.  Nor, how a lot of the case turns on the fact that the daughter after her mother's death was talking about assets she would receive from her mum's estate.

Instead, today's emphasis is on what this means for the growing number of instances where a couple due to age, dementia or ill health are living apart but would not have otherwise parted ways.  In the instances where I have seen similar things happen to couples, it is not separation as contemplated by the traditional reading of the Family Law Act.

Yet, you can imagine such sad circumstances could lead to a situation where the Family Law Act needs to apply, where one party would be provided better care, or security, or the meeting of expenses if their property, or maintenance issues were settled.

With an ageing population and the pressures on our aged care and health care systems, the situation faced in "Stanford" is going to become more common.

After last week what we can see is that even if the change of health is the only reason a couple are now apart, the doors to the court to sort out their finances may still be opened.