As our society's population ages, there is an increasing likelihood of unique issues arising in property settlement for elderly couples who are physically separated, due to illness or old age, despite still being married. In such instances, property settlements can become complex, challenging and emotionally charged.

For example, the 2012 High Court judgment of Stanford v Stanford significantly impacted on how the Family Court approaches property settlement applications in these circumstances. In this blog post our Family Lawyers explore the key aspects of this case and the implications it may have for elderly couples undergoing involuntary separation due to age and health factors and the division of their family home to release funds to pay the deposit for a bed in a nursing home or retirement village.

Stanford v Stanford: The facts

The Stanford v Stanford case involved a couple who had been married since 1971. Sadly, in 2008, the wife suffered a stroke and had to move into full-time residential care, being later diagnosed with dementia. The husband continued to care for her and set aside funds for her medical needs while living in the family home.

In 2009, the wife's legal representatives applied to the Family Court for orders altering property interests between the couple under the Family Law Act 1975. The Act allows the court to make property settlement orders if they are deemed "just and equitable." Initially, the magistrate ordered the husband to pay a significant sum to the wife, representing her contribution to the marital assets.

The Legal Argument and the High Court’s Decision 

The husband appealed to the Full Court of the Family Court, challenging the notion that involuntary physical separation alone justified a property settlement order. He argued that mere physical separation, especially when involuntary, should not automatically lead to such orders.

The High Court's ruling held that it would not have been just and equitable to make a property settlement order if the wife were alive because she had never expressed a wish to divide the family property. However, the Court acknowledged that under different circumstances, involuntary separation might warrant property settlement orders.

The majority stated that demonstrating one party's unmet needs, which cannot be addressed through a maintenance order, might justify a property settlement order. Hence, involuntary separation alone does not grant the Family Law Courts the power to consider property settlement. There needs to be evidence of more than just physical separation.

What does this mean for future matters of property settlement for elderly couples who are physically separated?

Following the Stanford v Stanford decision, the suggested approach to property settlements in similar cases involves three key steps.

Firstly, examine the parties' existing legal and equitable interests as individual entities, not just joint property.Secondly, determine, under s 79(2) of the Act, whether it is just and equitable to make an order to alter the parties' existing interests.Finally, consider the factors in s 79(4) of the Act, including those in s 75(2).

It is crucial to understand that each case is unique, and the court's decision will depend on the specific circumstances of the couple involved. If a couple remains in a relationship despite physical separation, and the relationship has not irretrievably broken down, a property settlement application may be successful. However, when parties are genuinely separated and have made an application to alter their interests, this usually establishes the just and equitable grounds for a property settlement order.

How can our Family Law team resolve property settlements for elderly couples who are involuntarily physically separated?

Property settlements in cases involving elderly couples facing physical separation due to illness or old age require careful consideration. The Stanford v Stanford case has shed light on the complexities involved and highlighted that involuntary physical separation alone is not sufficient grounds for a property settlement order. It is important for individuals in such situations to seek legal advice and understand their rights and responsibilities to ensure fair and equitable outcomes for both parties involved.

Should you be (or know of) a couple who are physically separated and require support to resolve matters of property settlement, it is highly recommended that you seek legal advice. To discuss your Family Law matter and find the best option for you, please contact our Sydney Family Law team on 02 9891 6388.

New South Lawyers’ communications are intended to provide commentary and general information. To that end, people should not rely on this communication as legal advice. Accordingly, they should seek formal legal advice for matters of interest arising from this communication.

To find out more, chat with a member of New South Lawyers' Family Law Team today.