By Jessica Strangio, Senior Lawyer
Contrary to popular belief, a family law property settlement does not automatically preclude one’s estate from being subject to an Application from a former de facto or spouse. The Succession Act 2006 (NSW) “The Act” is clear on who is eligible to make a claim against an estate or a Will, and that includes a former de facto or spouse. To offer some protection, parties may consider entering into something called a Deed of Settlement and Release pursuant to Section 95 of the Act, or otherwise known as a Section 95 Deed, as part of their family law property settlement. But a Deed in itself is not the protection. Below, we look at when such a Deed is binding, and things to consider when preparing such a document.
A Section 95 Deed is a document that, once parties enter into and obtain the relevant release from the Supreme Court of NSW, precludes them from making a claim against each other’s estate. Effectively, the release is the Supreme Court approving the Deed to make it binding upon the parties. For more information about this, our family law experts can advise on the best situations in which to negotiate for one of these documents.
Again, caution should always be exercised in the preparation of these documents. There have been instances where poor drafting or intention has resulted in these Deeds being overturned, and it is a lesson for parties and lawyers in ensuring these documents are prepared in accordance with the Succession Act, and not prepared for an unconscionable purpose. One example of such a Deed not being approved was in the case of Neil v Jacovou [2011] NSWSC 87, where the release was not granted because the judge was not satisfied that the Deed was to be in the surviving party’s advantage or fair or reasonable in the circumstances. In that case, the family provision claim was explored. This case also highlighted the need for parties to obtain independent legal advice before executing such documents. Where proper advice is obtained from the beginning, it reduces the risk of inflated legal fees. Here at Rafton Family Lawyers, we provide that advice from the beginning, giving parties the best opportunity to avoid any loose ends in a property settlement.
However, in another matter, Robinson v Robinson [2020] NSWCA 4, the appeal Judge upheld the decision of the primary judge to approve the release of the Section 95 Deed. It was found that the primary judge in that matter was able to approve the release on the evidence before them, despite argument from the appellant that the case required a hearing for determination. It was also held that the appellant was given appropriate legal advice at the time they entered into the Deed. It is therefore essential that parties are advised about their rights, obligations and financial position when it comes to entering into a Section 95 Deed and the advantages or disadvantages they offer.
Whilst case law provides a great deal of guidance, each and everyone’s circumstances are different. If a party or parties are concerned that death is looming, advice should be obtained immediately. If death is not likely imminent, it is always important to obtain advice for peace of mind and protection for the future, to ensure there are no loose ends left after a property settlement is completed.
Our team at Rafton Family Lawyers is here to help you with these queries.
For more information or to enquire about a consultation, contact us at reception@rafton.com.au