Family Breakdown and Estate Planning

Where there is a breakdown in a relationship between spouses, either married or de facto, the estate plan needs to be considered. If one of the parties dies, there are a number of consequences.

If the ex-spouses did not redo their Wills since their separation, and one dies, then the gifts or bequests to their former spouse will still apply. Most spouses leave everything to each other initially, and this would still take effect. So even though they were separated, and they probably didn’t want everything going to their ex-spouse, it would still take effect because the deceased did not attend to their affairs properly.

If a married couple has divorced, but they ex-spouses still hasn’t redone their Wills, the divorce at least saves some of the problems. A divorce doesn’t invalidate a Will that was signed prior in time, but the divorce operates such that the ex-spouse is deemed to have predeceased the person who dies. So any gifts to the ex-spouse, or even the appointment of the ex-spouse as executor, will not take effect.

The Family Law Act differentiates between a married relationship and a de facto relationship, but the Administration and Probate Act does not. It may just be a bit more difficult to prove a de facto relationship than a marriage. Under the new provisions of the Administration and Probate Act, an ex-spouse can make a dispute against the Will, if the Will has been amended to leave them out, and they still haven’t got a final settlement under the Family Law Act.

Where an ex-spouse dies and property proceedings haven’t commenced for a family law property settlement under the Family Law Act, then the surviving spouse will need to make a claim on the Will of the deceased in the Supreme Court (or County Court) in Victoria. The jurisdiction changes from a federal jurisdiction under the Family Law Act, to a State jurisdiction, and the law applying to the surviving spouse will depend on which State they live in.

So, if you separate, redo your Will. However, be aware that if you haven’t got a final property law settlement such as Consent Orders or a Binding Financial Agreement, then the Will might be challenged. I would recommend immediately redoing your Will after a separation, and again after a family law property settlement.

Family Breakdown and Estate Planning