What does separation mean for your Will? It is no surprise that we get asked this question a lot. In 2018, nearly 50,000 divorces were granted in Australia equalling over 42% of the total number of marriages registered that same year. While there is a lot to consider when you’re in the throes of separation, your Will and Enduring Power of Attorney is something you shouldn’t forget about.
If you are married and have recently separated from your spouse, it is important you update your Will and here are three reasons why.
1. It is likely the surviving spouse will inherit the estate
Often when couples marry, they will complete reciprocal Wills and Powers of Attorney. That is, their Wills are set up to leave their estates in the hands of the other should one of them pass away.
These Wills remain in effect until a Divorce Order is obtained (and sometimes after too!) It is important to note the difference between a separation and a Divorce Order. Once your Divorce Order is finalised, this will nullify any provisions in your Will for your former spouse. A separation however, will not nullify these provisions. In fact, during the period of separation and before a Divorce Order is granted, the couple is still considered to be “married” and therefore the estate can be inherited by an estranged spouse (subject to the rights of any children). Therefore, if you were to pass away during that period, your former spouse can be entitled to receive your assets, regardless of your separation or whether you are in the process of finalising or have finalised your property settlement.
It is important to note that the nullification of the provision in your Will won’t occur if the Court believes you were intending to leave your surviving spouse a gift or in the event you updated the Will after your Divorce without amending the appointed executor or gift. It is tricky to know what the Court will do in circumstances where your wishes are unclear, so, to ensure your intentions concerning your former spouse are recognised, we recommend making a new Will as soon as possible following a separation.
2. The process of getting a Divorce Order can be lengthy
While a solution might be to speed up the Divorce, the reality is this can take time and often be a lengthy process. Many people are unaware that once a Divorce Order is made by the Court, this commences a time limitation that requires parties to have resolved their property settlements or have made an Application to the Court in relation to this within 12 months. Because of this, separating couples are often encouraged to resolve their property matters prior to making an Application for Divorce to give them as much time as required before a time limitation commences.
With this in mind, it is important to have a Will you’re comfortable with in the event it is required while you are in the process of finalising a property settlement or obtaining your Divorce Order. We do recommend obtaining a Divorce Order as quickly as possible after separation as until your Divorce is finalised your spouse still has a right to claim against your estate through a Family Provision Application. For example, if a spouse were to die before a divorce was finalised without a Will, the entire estate may pass to the former spouse.
3. It’s a great time to take stock
Big life events such as separation are a great time to take stock, think of the future, and ask yourself some important questions. As you consider your next steps, you may also choose to think about the kind of legacy you want to leave for your loved ones. This is a great time to consider updating or making your Will as you can begin the process of putting those plans into action. By taking another look at your Will following separation, you can ensure you are happy with what will happen with your estate and who it will be left to.
While these are just three reasons to consider updating your Will, keep in mind that when it comes to your estate, your Will isn’t the only thing that will need attention if you have separated. It will also be important that you look into any property owned jointly with your former spouse as well as your superannuation.
Dealing with Property
If you own property with your former spouse as joint tenants, you should also consider ‘severing’ this joint tenancy. This would mean that the property would be held as tenants-in-common instead. If you were to pass away without severing the joint tenancy, your interest in the property will automatically pass to your former spouse regardless of the provisions in your Will. Severing the joint tenancy will ensure that your entitlement is determined in accordance with your Will.
When it comes to your superannuation, you should know that your Death Benefits are not distributed according to your Will, rather the Trustee of your super fund is to determine who the benefits should be paid to. Upon separation, you should consider revoking any Binding Death Benefit Nomination in your former spouses favour and submit a new document to reflect who you would like as your new beneficiary/ies.
There is a lot to consider when it comes to separation but know that there are many professionals including counsellors, social workers, and family lawyers who are more than equipped to help you through this process. Of course if you would like assistance updating or drafting your new Will, or need advice about your estate, contact our team for a free consultation.