If you’re going through a separation, the world as you know it is no doubt shifting dramatically. There are certain chapters of your life that need to close with some finality, and others that will, after some time, open up to you in a way that might be a little scary, but also, once the dust settles, hopefully freeing and exhilarating.
The exciting part is that in this, your next chapter, you are the author. You set the rules, create the boundaries and decide which characters are allowed to be in your story.
It may sound strange, at a time when there is so much else going on in terms of negotiating your financial separation and parenting plans, but an important aspect of moving forward into the next chapter of your story is getting your own personal legal and financial affairs in order. Specifically, it is very important to update any Will, Enduring Power of Attorney, and the nominated beneficiaries for your life insurance policies and/or superannuation death benefits. Importantly, if you have never had these documents, now is the hour!
A Will – deadly boring and incredibly empowering in equal measure. This document serves several really important purposes when you are separating from a partner. In the absence of a new (or updated) Will after separation, it may well be the case that from a legal point of view your former spouse may inadvertently score a leading role in your final chapter as an executor, a beneficiary, or a guardian in your estate.
That’s often not how you would write the script. So why not take control of something so thoroughly controllable and critical to your children and other loved ones?
A Will serves the following crucial functions in the context of separating from a former spouse:
- Executors: A Will allows you to appoint the person who will be in charge of distributing your assets (or looking after them in the role of trustee for minor children until they “come of age”). You may wish to appoint a trusted family member or friend for this role in preference to your former spouse.
- Guardians: A Will allows you to set out any wishes that you may have in relation to who may care for any of your children who are under the age of 18. The presumption at law is that minor children will return to their surviving biological parent. Sometimes, however, our clients will feel troubled by this if there are concerns about the other parent such as drug or alcohol addiction, violence, or an historically poor or limited relationship between the other parent and the children. A Will and supporting documents can clearly set out your wishes regarding guardianship in a way which will better arm your chosen guardians to face any necessary application pursuant to the Family Law Act as to ongoing arrangements for the children in the event of your death.
- Beneficiaries: Usually, you will want to ensure that your estate is passed on directly to children or other chosen beneficiaries, and not to your former partner. This is particularly the case where there is a dispute about property settlement. You need to take control and make a new Will in circumstances where you are not yet divorced because potentially, in the absence of a new updated Will, your former partner will take all (or a significant portion) of your estate in the event of your death.
It is equally important to create (or update) your Enduring Power of Attorney so that your former spouse does not obtain control of your finances or personal/health decisions in the event that you lose capacity. Further, it is crucial to review any beneficiary nominations you have made on your life insurance policy and/or in relation to your superannuation assets to ensure that the associated payments flow to your chosen beneficiaries (and not your former spouse) in the event of your death.
Estate planning is not a “one-size-fits-all” exercise. If you would like to discuss your personal circumstances, or have any questions about the issues raised here, please do not hesitate to get in touch. The relationship between family law and estate planning is also discussed further in our podcast series, “We Need To Talk”.