Separation from your partner or spouse is not an easy time for anyone. While there might be a number of other issues at the top of the stress list, it is extremely vital that you prioritise the reviewing and updating of your will. Without doing so, in the unfortunate event that you pass away or become incapacitated, the consequences can be disastrous.
Firstly, what is a will?
A will is a legal document that allows the distribution of a person’s assets, pursuant to the wishes one left behind before he or she died. A will appoints a person or persons as executor who will then be responsible for the distribution of the assets on the deceased’s behalf, in accordance with their instructions.
Assets are essentially the tangible valuables that belong to a person. These can include land, houses, cars, bank accounts, and insurance and superannuation policies. Wills appoint a beneficiary who in the event of your death or incapacitation will inherit your belongings.
Without a will, the distribution of your assets will be left up to the government, where a strict formula as to how the assets will be divided is conducted via the intestacy rules of the Succession Act 1981 (Qld). The correct term for this outcome is ‘intestate’ and is of course, a less desirable outcome for most.
Wills with regards to separation
There are factors besides simply separating from a marriage or a de facto partner that should be considered as clear indicators your will might need reviewing and updating. These can include changes in family circumstances, including:
- Marriage or the start of a de facto relationship (especially if there are children from a previous relationship);
- the birth of children or grandchildren;
- if an executor or beneficiary already named in your will dies;
- if financial circumstances change.
Depending on the type of relationship between yourself and your partner, the entitlements to each other’s estates can dramatically differ. Wills are not the only part of estate planning, but the management of your financial affairs must also be considered. Some of the main points of review following a separation might include:
- Jointly owned properties;
- superannuation funds and death benefit nominations;
- life and risk insurance policies;
- the circumstances surrounding the decision as to whether your will should include Testamentary Trusts;
- any powers of attorney and personal arrangements;
- having knowledge of the reasons for asset protection and benefits of owning property in family discretionary trusts.
Separation and Wills
If you and your spouse both had your own wills prior to marriage, these will automatically be annulled following the legal joining of your assets. This means that if you or your spouse die, the assets will be left to the living spouse. If you and your spouse are currently going through a separation but have not yet divorced, there will be no effect on the joint will until it has been amended. There have been unfortunate situations where a party dies before the finalisation of their divorce and the soon-to-be ex-spouse is still considered the spouse for the purposes of intestacy rules and therefore entitled to the estate.
In the situation where you gift your estate to your partner who then becomes an ex-partner, the affairs do not change in the event of your death unless you update your will. Therefore, assuming that you no longer want your ex to be gifted your estate, it is important that you keep your will up to date.
Separated parties can choose to seek a Court Order to help with the settling of their financial affairs, known as a property settlement. A divorce, on the other hand, involves a process with a few more intricate steps. A divorce may only be sought 12 months after separation, and this can be either before or after the parties have completed their property settlement.
It is vital that legal advice is sought to help navigate the legal intricacies surrounding these issues, for a legal specialist can help with the understanding of the laws involved, answer any questions you may have in relation to how things will change following a separation, and discuss the impact this will have on estate planning.