Estate Planning Lessons from Crothers v Cahill: Protecting Your De Facto Partner in Life and Beyond

The Western Australian Supreme Court decision in Crothers v Cahill [2025] WASC 478, handed down on 12 November last,  offers invaluable insights for couples in de facto relationships and the people who advise them. As second marriages and de facto partnerships surge 10% post-COVID and 25% of Australian households include stepchildren, this case highlights critical estate planning considerations that can make the difference between family harmony and costly litigation.

The Case That Could Have Been Avoided

When Robin Geoffrey Tarrant died in July 2024, he left behind his de facto partner of over eight years, Vanda Crothers, with only a limited right to reside in their jointly-owned home for ten years. Despite Ms Crothers having contributed $170,000 towards paying off their mortgage and sharing renovation costs, the Will essentially treated her as a temporary occupant rather than a life partner who had built a shared future.

The court's decision to award Ms Crothers full ownership of the deceased's half-share in their Roman Road property (in exchange for $150,000 to the estate) demonstrates how inadequate estate planning can lead to outcomes that differ significantly from what the will-maker intended.

Key Lessons for De Facto Couples and Their Advisers

1. The "Right to Reside" Trap

Family provision claims often involve the contested interests between a de facto partner and the deceased's child or children from a former relationship. The Crothers case demonstrates that merely granting a partner the right to reside in the family home is insufficient for long-term relationships in which substantial contributions have been made.

Practice Point: Consider outright gifts or life estates rather than limited residence rights. If using residence rights, ensure they're coupled with meaningful financial provision.

2. Document Financial Contributions

The court specifically noted Ms Crothers' $170,000 contribution to reducing the mortgage and her sharing of renovation costs. Courts assess both direct financial contributions (such as income, assets, or property) and indirect contributions (such as homemaking, child-rearing or supporting the other partner's career).

Practice Point: Maintain records of financial and non-financial contributions throughout the relationship. This evidence becomes crucial in family provision claims.

3. Health and Age Considerations

The court emphasised Ms Crothers' age (64), health issues (type 2 diabetes with complications), and diminishing working capacity. The applicant, aged 60, would likely cease work over the ensuing years, resulting in a substantial reduction in income, which was a key factor in a similar case.

Practice Point: Regularly review wills as partners age, particularly considering health changes and retirement planning needs.

4. The Adequacy Test for Modern Relationships

The court applied the established principle that "a spouse is entitled to have a home, income to enable them to live in the style to which they are accustomed, and to provide them with a fund to meet unforeseen contingencies". This standard applies equally to de facto relationships.

Practice Point: When drafting wills involving de facto partners, apply the same provision standards you would for married spouses of equivalent relationship duration.

Current Trends Demanding Attention

Recent developments make these lessons increasingly relevant:

• 40% of estate disputes involve blended families, with contested wills costing families $50,000-$200,000 in legal fees on average

• 45% of second-marriage couples fail to update wills, risking ex-partners inheriting over current families

• De facto partners may need to prove their relationship status to claim inheritance rights

Proactive Strategies for Estate Planning Facilitation Practitioners

1. Comprehensive Relationship Documentation

Advise clients to maintain evidence of their de facto relationship, including joint bank accounts, shared living arrangements, and mutual commitment indicators.

2. Regular Will Reviews

To reduce the possibility of a family provision claim it is essential to obtain sound legal advice when preparing your Will and to ensure that your Will is regularly reviewed. This is particularly crucial when relationships change or develop.

3. Consider Binding Financial Agreements

A couple living or intending to live together can prepare a binding financial agreement under the Family Law Act 1975 (Cth) that sets out how property will be divided if the relationship ends. These can complement estate planning by clarifying intentions.

4. Address Superannuation and Insurance

30% of blended family estates misdirect death benefits due to old nominations. Ensure beneficiary nominations align with will intentions.

The Settlement Alternative

The Crothers case demonstrates the value of early, realistic legal advice. Most family provision claims can be settled between the legal representatives of the applicant and the estate, which will avoid costly Court proceedings. The parties' ability to reach a negotiated settlement saved significant litigation costs and emotional trauma.

Moving Forward

As Australian society continues to embrace diverse relationship structures, advisers must adapt their estate planning approaches accordingly. The Crothers case serves as a reminder that traditional estate planning models may inadequately serve modern de facto relationships, particularly those involving substantial financial interdependence and long-term commitment.

The court's willingness to look beyond formal legal status to examine the reality of the relationship and contributions made provides both a warning and an opportunity. For advisers assisting clients with their estate planning, the case emphasises the need for nuanced, relationship-specific estate planning that recognises the legitimate expectations created by committed de facto partnerships.

The bottom line

In an era where de facto partnerships have become increasingly prevalent in Australia, treating these relationships as materially different from marriage in estate planning is both legally risky and socially outdated. The Crothers decision reinforces that courts will apply substantive justice over formal categories—a lesson every estate planner should heed.