A warning for separated couples to make or update your will
An unfortunate story with an even more unfortunate outcome was recently reported in the media, in which a 30-year-old man was married, but he and his wife separated. The couple had finalised a property settlement, but before signing the Divorce Application provided to him by his wife, the man died. The man did not have a will and, as a result, the Intestacy Rules applied, which meant that his estate would be left to his wife as she was still classified as his spouse (notwithstanding that they had separated, finalised a property settlement and both re-partnered). Sadly for the man’s new partner, they had lived with each other just shy of the two years required to be considered a de facto couple. The result now is that the deceased man’s estranged wife is entitled to 100% of his estate.
In this article, Greg Cox discusses the importance for separating couples of having up-to-date wills.
Things would have been different if the man had:
While divorce has the effect of revoking a gift made in a person’s will in favour of their former spouse, or preventing the former spouse from taking under the Intestacy Rules, separation has no such effect. Further, the requirement for spouses to be separated for 12 months before they are able to apply for a divorce means that people who do not make or update their will prior to their divorce are at risk of their estranged spouse receiving part or all of their estate if they die. This is despite the fact that the former spouse may have already received significant property in a property settlement.
This is a timely reminder to those who are separated but not divorced to make or update their wills and otherwise review their overall estate plan, including particularly dealing with jointly owned assets and making or updating nominations for the payment of superannuation death benefits. Further, if you have entered into a financial agreement before or during marriage, it is also important to review your current will to ensure it contemplates and is consistent with the provision made for your spouse under your financial agreement.
No doubt, the 30 year old man referred to above did not think that he was going to die, and did not think that making a will, or signing the Divorce Application, was important to him at the time. Unfortunately, he and his family were not prepared for the worst case scenario.
However low on the priority list it may seem at the time of a separation, our clients should be aware of the need to update their will, as it is something we will discuss at our first meeting. HopgoodGanim strongly recommends making the time to create and/or review your estate plan, so as to cover the worst case scenario.