The grief, anger and confusion which almost inevitably surround the end of a relationship, make it understandable that many people defer facing the legalities of a separation.
Last week we talked about some of the risks in delaying matrimonial and de facto settlements.
It is important to understand that where proceedings have been instituted prior to the death of a party, those proceedings can continue post-death.
This week we consider the risk of death of the other spouse where proceedings have not been instituted. They include:
- Is likely to significantly reduce the estate’s entitlement to a property adjustment, because the future financial needs of the party (which are otherwise taken into account) become irrelevant.
- Extinguishes the deceased’s right to financial maintenance from the surviving spouse under the Family Law Act.
- Extinguishes the right of children of the deceased to financial maintenance under the Family Law Act and Child Support (Assessment) Act. This may increase the financial burden on the surviving spouse in meeting obligations to children.
- Causes the deceased’s interest in any property held under a joint tenancy to automatically transfer to the remaining owner – regardless of the terms of the deceased’s will.
- In circumstances where the parties are separated but not divorced and the party has not yet changed their Will (and the living party remains an executor and/or beneficiary) results in the living partner potentially taking the benefit bequeathed under the Will.
- In circumstances where they are separated but not divorced, and they die without a Will – results in the living partner from receiving a substantial benefit under the intestacy laws.
- In circumstances where the deceased had a pre-existing death benefit nomination on their insurance policy or superannuation interest benefiting the living partner– results in the living partner potentially receiving that death benefit.
These are just some of the risks of delaying a settlement. There are steps you can take to protect your interests such as preparing a new will, advising your superannuation or insurance fund of new binding nominations, preparing a new enduring power of attorney and severing joint tenancies.
If you would like further information please contact Andrew Crooke a member of our Family Law Team on 07 4616 9898.
Prepared by Andrew Crooke