Many people only obtain family law advice after a relationship has broken down. Few consider that they may no longer have capacity to do so when that time comes.
Over recent decades, demographic shifts, health advancements, and social changes have led to an ageing Australian population and the emergence of more complex family structures. An ageing population creates unique challenges for family law, as longer lifespans and/or prolonged ageing-related illness or disability add a further dimension of complication to family relationships.
For older Australians considering cohabitation with a new partner, obtaining family law advice early may be instrumental in helping secure financial arrangements for their care, and save their loved ones the heartache, stress, and expense of litigation.
The median age at marriage in Australia has increased steadily over recent years, and with it, the median rate of divorce. [1] De facto relationships are also on the rise, increasing by 6% each census year since 1986. [2]
These rapid social and demographic changes are resulting in more diverse family structures. With the age for marriage and divorce increasing, many Australians are re-partnering later in life and are also more likely have children from their previous relationships.
Put simply: Australians are living longer, more likely to live with a de facto partner, and those who marry (and divorce) do so later in life – usually after accumulating greater wealth.
In this context, consider then that we are about to see the most significant intergenerational transfer of wealth in Australian history – $3.5 trillion over the next two decades, according to the Australian Productivity Commission.
As the nature of relationships, family, and society rapidly evolve and become more complex, so does the legal system’s response. How then can older Australians, and their families, plan for and protect their future?
The High Court examined some of these emerging issues in Fairbairn v Radecki, [3] a dispute regarding an elderly de facto couple.
Ms Fairbairn and Mr Radecki had been in a de facto relationship for approximately 20 years. They each had adult children from prior relationships, and had agreed to keep their assets separate throughout the relationship, although they lived together in a house owned by Ms Fairbairn.
In 2017, Ms Fairbairn moved into an aged care facility after developing dementia. Mr Radecki continued to live in the home they had shared. Ms Fairbairn’s children sought that Mr Radecki sell their mother’s house to pay for her care. Mr Radecki refused, whilst providing some financial support and continuing to visit Ms Fairbairn regularly.
As Ms Fairbairn had lost capacity, the Public Trustee commenced family law property proceedings on her behalf seeking orders for the sale of Ms Fairbairn’s house, on the basis that the parties had separated.
In a unanimous decision in favour of Ms Fairbairn, the High Court agreed that separation had occurred. The relationship breakdown did not result of Ms Fairbairn’s incapacity, nor the parties living apart. Rather, they pointed to Mr Radecki’s poor conduct towards Ms Fairbairn as the that separation had occurred in 2018. [4]
Specifically, their Honours emphasised Mr Radecki’s “persistent refusal… to make ‘the necessary or desirable adjustments’” for Ms Fairbairn was not consistent with a mutual commitment to a shared life with her.
An ageing population is a vulnerable population.
The High Court’s decision sends a clear message to separating parties that they are not afraid to intervene in family law disputes to correct power imbalances due to the age and frailty of one party.
Significantly, Fairbairn follows the trend of other recent family law decisions by this High Court shifting the onus onto the stronger party to take proactive steps towards mitigating disadvantage or power disparities in their financial relationship. [5]
The High Court in Fairbairn did not agree with the view expressed by the Full Court of the Family Court in their earlier decision, [6] that parties treating each other poorly is (unfortunately) common in relationships and family law matters.
It is clear from emerging High Court precedents that a higher standard of conduct is expected from family law litigants. Stronger parties will be expected to level the playing field where clear disadvantage exists.
This decision raises many interesting questions for family lawyers, including:
Family law has long recognised that parties can remain in a relationship despite living separately, including involuntarily and enduring separation – such as a spouse moving into a care facility due to illness. [7]
The decision in Fairbairn v Radecki reinforces that:
The Australian population is aging and changing rapidly. By 2026, over 22% of Australians will be aged over 65. [8] Over the next 40 years, the number of Australians aged 85 and over is expected to triple, and the number of centenarians to increase six-fold. [9]
Accordingly, family lawyers can expect to see more cases like Fairbairn involving issues of capacity, and increased involvement of third parties in Family Court proceedings.
Many children need to consider this important question as their parents age, and particularly so if that parent has re-partnered and/or lost capacity. Decisions around care of a loved one are difficult, and may be further complicated if clear financial arrangements aren’t in place.
The implications of Fairbairn extend to a systemic and policy level, as discussed in my previous article with Amber Crosthwaite, partner in Lavan’s Aged Care, Seniors Living & Disability Services team. [10]
For individuals with significant or complex assets, specialist advice on how family law solutions can protect assets and preserve familial wealth is an essential component of estate and future planning.
In certain cases, a Financial Agreement may help avoid disputes between new partners and children from previous relationships.
As Fairbairn v Radecki aptly illustrates, finances, family, and relationships do not exist independently or in a vacuum – there are a myriad of considerations and dynamics that interconnect and interplay. As such, family law solutions must also be considered and integrated holistically with tax, healthcare, estate and succession advice when planning for the future.
[1] Since 2010, the median age at marriage has increased from 31.4 to 32.2 years for men, and 29.2 to 30.6 years for women. (Australian Bureau of Statistics).
[2] Increase of 6% in 1986, 12% in 2001, 18% in 2016. (Australian Bureau of Statistics)
[3] Fairbairn v Radecki (2022) HCA.
[4] Fairbairn v Radecki (2022) HCA 18 (Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward, Gleeson JJ).
[5] Thorne & Kennedy [2017] HCA 49; Hsiao & Fazarri [2020] HCA 35; Clayton v Bant [2020] HCA 44.
[6] Radecki v Fairbairn [2022] FamCAFC 307 (Full Court of the Family Court).
[7] Stanford v Stanford (1992) HCA 52.
[8] Guselli, Confronting ageing the talk Australia has to have (October 2023) University of Sydney.
[9] Intergenerational Report 2023, Australian Government.
[10] Better care requires sharper approach, Business News.