It’s a sad but seemingly inevitable fact of life these days that many relationships fail. This is a difficult time in anyone’s life but while dealing with the emotional toll, we also need to be realistic about the implications of the split for what we leave to our children or other beneficiaries should we unexpectedly die.
A key priority for a couple who separate, therefore, is to attend to their estate plans. This means amending and updating their wills, their nominated powers of attorney, enduring guardianship, superannuation beneficiaries, life insurance policies and even advanced care plans, in order to reflect their new circumstances.
This is important because failure to do so potentially leaves your ex-partner in a position to inherit all or most of your estate should you suddenly die before updating these documents. This can be the case even where there is no will in place, as intestacy rules may favour your ex-partner in terms of your estate. If you have an Enduring Power of Attorney and you divorce or your civil relationship is terminated, your Enduring Power of Attorney appointing your ex-partner will be revoked.
Key things to attend to
If you divorce or your civil relationship ends, it’s important to make it clear what rights and benefits you wish for your ex-partner to receive should you die or lose capacity by updating your will and any Enduring Power of Attorney.
This is because any clause in your will which makes a gift to your ex-partner, or which appoints your ex-partner as an executor, will be revoked when you divorce or your civil relationship is terminated. This is also the case regarding Enduring Power of Attorney in favour of your ex-partner. If you are in a de facto relationship which ends, or if you have not formally divorced or terminated your civil relationship, it may be unclear whether or not your ex-partner is entitled to receive any gift under your will or if your Power of Attorney has been revoked.
Property and other matters
Most experts in estate planning following separation advise that the estranged couple reach a property settlement as a matter of priority. This is particularly the case if there are jointly owned assets to ensure certainty of inheritance for any potential beneficiaries from the relationship such as children.
In order to achieve this certainty, documentation needs to be prepared and registered after separation to change the way in which the ownership of real estate is held from that of joint tenants to tenants in common. This does not need the signature of the estranged spouse and will prevent them from automatically receiving all of the property if you die before a settlement is reached.
A property settlement should be considered alongside divorce arrangements. If there is no chance of reconciliation between you and your spouse, then after 12 months of separation you should apply for divorce so as to finalise the changes reflected in your updated estate plan and end any further claims by your ex on your estate. It should be noted all of these points apply to de facto couples as well.
When couples separate but fail to amend estate planning documents or reach a property settlement, their affairs can become messy and complicated if one of them dies or becomes incapacitated. This situation can adversely impact beneficiaries such as children and mean your wishes for how your assets are distributed after your death are not fulfilled.
If you separate from your spouse, you need to make a comprehensive review of your estate plan. This process can be difficult and time-consuming but can be made much easier if you consult legal professionals with more than 100 years of experience in estate planning and wills, such as Delaney & Delaney. We’ve been working in this area since 1915, a demonstration of our integrity, compassion and commitment to excellence for our clients. Contact us today on (07) 3236 2604 or email@example.com