Are divorce settlements still binding after death? Here is an example case.
We all know someone who has got divorced and whatever the background to the split, most couples find it a relief when it’s all over and they can start getting on with their new lives.
However, the fascinating recent case of Sismey v Salandron has raised the startling spectre of divorces being final during your lifetime – but possibly not binding after death.
The facts of the case
The Deceased in his lifetime divorced and agreed with his former wife to leave his property by Will to their son. The Deceased duly prepared and executed a Will in accordance with his divorce settlement. The Deceased was in a relationship with his then girlfriend and, at the time of the divorce settlement, the Deceased, his former wife and girlfriend all signed the settlement.
Two years later, after having been diagnosed with cancer, the Deceased married his girlfriend. At the time, he openly said that this was to enable her to benefit from his pension as his widow.
Marriage revokes a Will, and therefore the Will the Deceased prepared in accordance with his divorce settlement was revoked. No further Will was prepared and, under the rules of intestacy, the Deceased’s former girlfriend/new wife became the sole beneficiary of his estate. The divorce settlement was defeated and his son disinherited.
The inheritance dispute
The claimant in this case was the son of the Deceased. The son made a claim for the divorce settlement to be upheld and the property to be transferred into his name in accordance with the Deceased’s revoked Will.
The Deceased’s new wife made a counterclaim under section 11 of the 1975 Act. Section 11 of the 1975 Act sets out to limit the ability of a testator to make contractual agreements during their lifetime which prevent potential 1975 Act claimants from receiving reasonable provision from their estate.
The new wife argued that the Deceased and his former wife were collusive in reaching their divorce settlement and that the property should be used to make reasonable financial provision for herself.
What did the court find?
On the basis of email correspondence between the Deceased and his former wife, the court agreed that the divorce settlement was collusive. This is the first ever finding of collusion in respect of a divorce settlement.
The finding of collusion enabled the judge to consider the terms of the divorce settlement and whether the Deceased had received full valuable consideration for the divorce agreement.
Ultimately, the court found that the Deceased had received full consideration for his settlement on the basis that in exchange for leaving his property to his son, he had retained his sizeable pension. The Deceased’s estate was therefore administered in accordance with the terms of the divorce settlement and the property transferred to his son.
How is this going to impact 1975 Act claims and divorce settlements?
This case is a landmark ruling for family and inheritance law. Section 11 of the 1975 Act has never previously received judicial treatment, and it is often overlooked by practitioners when drafting divorce settlements and dealing with disputes on death.
The result is also likely to be of interest to insolvency practitioners who may seek to challenge the validity of a divorce settlement on the grounds of collusion. In those circumstances the insolvent party will need to establish that they received full and valuable consideration in their divorce settlement.
Terms requiring a party to make a Will in certain terms are increasingly common in divorce settlements. Anyone entering into such an agreement should consider the impact of this on the beneficiaries of their Wills.
If you have entered into a divorce settlement or have been disappointed by the terms of a Will which was the subject of a divorce settlement, it is important to take specialist legal advice early.
To discuss how your divorce settlement may be affected by death or inheritance rules, please get in touch.