Should a Spouse Receive Less in a Divorce because they are Terminally Ill?

An interesting decision out of an Australian Federal Circuit Court this month caught our eye when a judge ruled that a man was entitled to only 1/3 of the marital estate because he had been diagnosed with terminal cancer and was estimated to live for only one more year. In this case, after a 30-year marriage, the parties had accumulated approximately $1.5 million in assets that had to be divided in their divorce.

The Wife in the case argued that because the Husband had been diagnosed with terminal lung cancer and was expected to live for approximately one year longer, that she should be awarded a greater share of the marital estate, due to the fact that she had longer-term needs that had to be accounted for. The judge actually agreed with the Wife’s argument and ultimately awarded her 2/3 of the estate ($1M) , meaning the Husband only received 1/3 of the estate ($500,000).

The judge, in making this first-of-its-kind decision, had the following to say: “Is this just and equitable? The heart says ‘no’. The head says ‘yes’. With great reluctance I feel I must be guided by my head.” The judge went on to say that the matter, although distasteful to even consider, had to be “approached in a dispassionate way.”

Although this case raises extremely interesting legal and ethical questions, we know that such a decision would never come out of a California court. Although California law allows spouses to agree to whatever disposition of their marital estate they wish, when the decision is left to a judge, the law is clear that the court MUST divide the community estate of the parties equally. While there are some limited exceptions built into the statutes, with personal injury awards or for certain types of debt for example, the court generally has no jurisdiction to make orders for anything other than an equal division.

Even though the California courts are limited in power to only ordering equal division of community property, the courts do have broad discretion in the method of division ordered. The court has authority to make any orders that it deems necessary to effectuate an equal division of the community estate.

So, if this case was heard in California rather than Australia, it is clear that the outcome would have been different. The Wife’s argument for an unequal division of the marital estate would never have been considered as legitimate by a California judge. The parties in this case would have each received their ½ of the community estate, and when the Husband’s illness eventually takes his life, his half of the assets would be passed down to his heirs through his will or through the laws of intestacy. The Wife’s only hope for such a result would have been through agreement between her and her Husband. Otherwise, 50/50 would be the only result.

Please contact us if you are considering a divorce from your spouse, a legal separation, or have questions regarding child custody and visitation. Nancy J. Bickford is the only Certified Family Law Specialist (CFLS) in San Diego County who is also a licensed Certified Public Accountant (CPA) with a Master of Business Administration (MBA). Don’t settle for less when determining your rights. Call 858-793-8884 in Del Mar, Carmel Valley, North County or San Diego.

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