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The Estate Planner – March 2018

What is a Domestic Partner?

Who is a “domestic partner” has profound implications as far as estate planning is concerned, particularly when someone dies without a Will or a Valid Will. Whether a person is a domestic partner also has implications and whether a Will can be challenged.

The Administration and Probate Act (Vic) 1958 defines an (unregistered) domestic partner as someone who was living with a deceased person in a genuine relationship at the time of death, and either had been continuously living with the deceased for at least two (2) years immediately prior to the death, or has a child with the deceased.

However, given the complexities of modern relationships, there have been various cases over the past few years indicated flexibility in this definition.

For example, in Maroti v Ristic (2015) VSC 3, Justice Landowne said that “The Act does not necessarily require physical cohabitation.” And that Section 39(2) of the Domestic Partnerships
Act provides that in determining whether the domestic relationship … exists or has existed the Court must take into account all the circumstances of the relationship, including:

a) The degree of mutual commitment to a shared life;

b) The duration of the relationship;

c) The nature and extent of a common residence;

d) Whether or not a sexual relationship exists;

e) The degree of financial dependence or

f) independence and any arrangements for financial support between the parties;

g) The ownership used in acquisition of property;

h) The care and support of children; and

i) The reputation and public aspects of the relationship.

This view may perhaps be contrasted with the recent New South Wales case of Smoje vForrester (2017) NSWCA 308, which was an appeal against a decision by the NSW Supreme Court to make provision for the Plaintiff for further provision. In this case, the deceased had been terminally ill, and was living in a hotel. The Plaintiff in the initial case visited the deceased to provide her with care in the months preceding her death, and sometimes slept on the floor in the hotel room. Initially, the judge had found that the plaintiff qualified as being in a “close personal relationship” with the deceased, and found that they were “living together”.

This decision was appealed, and the appeal was allowed, the appeal court judges decided that “whilst living together does not require that the living occur at a single place, it will ordinarily include elements of interaction and sharing whilst engaging in activities associated with occupying the same place.” In this case, repeated visits for a single purposes, without more, were not found to satisfy that requirement. That is, the provision of personal care during the last six months of life were not enough to demonstrate a genuine domestic partnership in the absence of other factors.

De Facto & Intestacy in Victoria

Where people have not made a Will and are not married, it is important to consider the definition of partner. Many people, particularly those who have experienced prior failed relationships, value their independence, and choose to maintain separate residences, but still consider themselves in a committed relationship.

As outlined in our November 2017 newsletter, on 1 November 2017, some significant changes were made to the distribution of assets for people who die without making a valid Will, which (statistic suggest) is around 60% of Australians.

The new law essentially increases the benefit passing to a spouse or de facto partner, reflecting the general attitude of the Court at this time that a person’s primary responsibility is to provide for their spouse.

Where a person dies with a spouse/partner, and either no children, or children with that surviving spouse/partner, 100% of the Estate will pass to that surviving partner. It is, therefore, particularly important to ensure that a committed relationship is recognised. In this case, it may be worthwhile considering the registration of a relationship, as a registered caring partner will be accepted under intestacy provisions, even where the technical requirements of a ‘de facto’ have not been met.

Of course, it is far easier to ensure that your wishes are upheld if a valid Will is in place!

When Powers of Attorney go Wrong

There have been many changes recently to legislation relating to Powers of Attorney. Previous Estate Planner newsletters have discussed the changes relating to Financial and Personal decisions (2015) and Medical Treatment (February 2018).

It is important to consider the responsibilities of the attorney nominated under these documents, and the steps that can be taken to rectify contraventions by an Attorney.

Under the current legislation, Powers of Attorney must act in the best interests of the Principal (the person who made the power of attorney document), and are not allowed to obtain a financial advantage, or cause loss to the Principal as a result of their actions.

There are a number of specific and general offences outlined in the Powers of Attorney Act 2014, and the duties of an attorney are outlined in Part 6, Division 1 of that Act.

When an attorney has acted improperly, or contravened the provisions of the Act, an application may be made to VCAT for compensation to be paid to the Principal by the attorney.

If you are considering making a Power of Attorney, it is wise to obtain advice to ensure that the most appropriate appointment is made. Alternatively, if you have been appointed as a Power of Attorney, make sure that you understand your responsibilities, and the possible outcome if you do not fulfil these obligations.

If you have any concerns or questions about the operation of the Act please do not hesitate to contact our office.

THE ESTATE PLANNER MARCH 2018

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