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In an unusual case heard by the Full Court (the Appeals Court) of the Family Court in early 2012 the Court decided that in certain circumstances it is able to make a property settlement agreement even when the parties have not actually separated.

In this case, an older couple had both been married before and had adult children from their previous marriage. The wife became ill and needed to go into an aged care facility. There was no question of divorce and they were separated only because of her medical condition. Her adult children after seeking Family Law advice brought an application to the Federal Magistrates Court as her case guardians seeking property settlement orders that the home in which the couple had lived be sold and that she receive some of the proceeds of sale to pay for the bond and fees payable to the aged care facility. The husband wanted to stay in the home but agreed to continue paying ongoing expenses and maintenance for his wife to remain in the aged care facility. By the time the matter came to be heard by the Court the first time the wife’s condition had deteriorated to such an extent that she needed to be in high care where in fact it was not necessary for her to pay any bond.

The Court ordered that she receive 42.5% of the asset pool by way of a property settlement agreement and that the home be sold. The husband appealed and the Full Court said that although the Court does have the power to order the sale of the property, it was  appropriate in these circumstances to consider other alternatives such as payment of ongoing maintenance, temporary property orders or an adjournment until the parties’ situation settled.

By the time of the hearing of the appeal the wife had passed away and her children continued the application on behalf of her estate. The argument then became one of whether the wife’s estate should receive anything as this would only go to her beneficiaries. The Court ultimately decided that it was just and equitable to give to the wife’s estate 42.5% of the total assets but that this payment be postponed until the husband either sold the home voluntarily or ceased to live in it.

For more information about a Property Settlement Agreement, click here.

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Family law situations can be complex and sometimes they can involve serious issues.  Information outlined is proposed to provide general guidance only. Due to the seriousness of legal matters as well as the uniqueness of your individual situation, professional advice should be sought. For advice, please contact one of our Family Lawyers.