Protecting your estate after separation

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Separation, and in the case of married couples, possible divorce, can be an enormously stressful time. The many stressors that resulted in the separation in the first place may well be followed by complex blended family situations, arrangements to wind up family run companies, assessment and distribution of assets, relocation to different places of living – not to mention dealing with the emotional strain that will no doubt have been a constant companion.

Any wonder then that having dealt with these complex logistical jigsaws, both parties may well, metaphorically speaking, draw a huge sigh of relief before tackling the formal process of financial settlement, and possible application for divorce.

But I’ve changed my Will, surely that says it all?

 Divorce and formal annulment of a marriage or partnership carries with it some implications with regard to a former spouse in the provisions of a Will, nevertheless, astute parties will no doubt also attend to the important matter of updating their Wills to reflect new arrangements and intentions. While individual circumstances and desires can vary considerably, it may be that each party to the relationship believes that with all that done, should either of them die, their former partner will have no claim on their estate.

Certainly, a person’s Will is a legal and binding method of indicating specific desires in the distribution of an estate. Clear direction may have been given in revised intentions with regards to the distribution to a newer partner or spouse, children, and so on. It may also be clear in indicating a lack of desire to direct any amounts to a former spouse.

However, irrespective of such directions, a former spouse still retains one right that is relevant to this discussion.

The Succession Act NSW 2006

First mention of a Succession Act leads to immediate visions of the Court of Henry 8th and potential conflicts with Spanish rulers. But no. This Act specifies all aspects of creation and implementation of Wills in NSW.

One such aspect is that it clearly states that a former spouse is an eligible person in terms of who may make a claim on an estate. Separation, divorce – as described above, and even a new Will – do not preclude a former spouse from making a claim on the deceased’s estate.

Of course, being eligible to make a claim does not presume any likely outcome of such a claim, and it is important to realise that any such claim needs to be instigated within 12 months of the death.

The Supreme Court takes many factors into account in such deliberations. One major factor that a claimant must prove is that they were financially reliant on the deceased leading up to and at the time of death. Another consideration is whether there was a fair and equitable financial settlement after the separation.

Given the above, ensuring a full and equitable property settlement, showing clear separation of financial obligations, and making very clear intentions with regard to a former spouse in a Will, all combine to provide estate protection. However, one final option is also available.

Deeds of Release

A Deed of Release is an agreement, ratified by the Supreme Court, that legally binds both parties to mutually release any right to make claim upon the other’s estate under the Succession Act. This is a very clear and defining solution to any possible future claim by a surviving spouse.

An experienced estate lawyer can provide timely and expert guidance so that all bases are covered in this important aspect of estate planning.

 

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