In Queensland, moving in together, getting married, separating or divorcing can have unexpected consequences for whoever inherits your assets, receives your superannuation or makes important decisions on your behalf.
This article highlights practical examples for how your relationship status can impact your existing estate planning documents – such as your Will, an Enduring Power of Attorney (EPA) or Superannuation Binding Death Benefit Nominations (BDBNs) – and potentially impact your intentions for who will have access to your assets.
Moving in together
Living together in a de facto relationship doesn’t automatically invalidate your Will. However, your partner may acquire rights to make a claim against your estate, even if you haven’t included them in your Will. In addition, if you die without a will, your partner may become entitled to your estate.
Adam & Caroline’s story (Chapter One)
Adam and Caroline have been in a relationship for three years and recently decided to move in together. Both have been married previously and have children from their former relationships.
Adam owns the home they now share, while Caroline has retained an investment property. They have agreed to keep their finances largely separate and assume that, if either of them dies, their respective assets will pass to their children.
Adam prepared his Will several years ago, leaving his entire estate to his two children. Caroline has a similar arrangement in place for her daughter. Neither has updated their Will since moving in together.
What Adam and Caroline don’t realise is that living together in a de facto relationship may give them certain rights in relation to each other’s estates.
If Adam dies, Caroline may be eligible to make a Family Provision Application (FPA) if she believes Adam’s Will has not made adequate provision for her. This could potentially affect the inheritance Adam intended to leave to his children.
While moving in together does not invalidate their wills, Adam and Caroline should review their estate planning arrangements to understand the potential implications of their relationship and ensure their wishes are appropriately documented.
In summary, entering a de facto relationship does not automatically change or invalidate your Will or EPA. However, your partner may become eligible to make a FPA against your estate if you die without making adequate provision for them. This means they could seek a greater share of your estate, even if your Will states otherwise. Further, if you do not have a valid will when you die, your partner may receive some (or all) of your estate.
Getting married
Marriage generally revokes an existing Will in Queensland (subject to exceptions) meaning it is possible your assets will no longer be distributed as you have previously intended.
John & Sarah’s story
After being in a de facto relationship for four years, John and Sarah decide to get married. They already had their own Wills, EPAs and BDBNs and decided not to update these documents.
John’s Will appoints his brother as his executor and gives 100% of his residuary estate to his brother. Upon marriage, John’s Will is entirely revoked and the intestacy provisions will apply instead.
John’s EPA appoints his brother and Sarah as his attorneys. Upon marriage, the appointment of his brother is revoked and Sarah will become his sole attorney.
John’s BDBN nominates Sarah to receive 100% of his superannuation. The trust deed does not specify that marriage impacts the validity of a BDBN. Sarah will continue to be John’s spouse, so will continue to be eligible to receive his superannuation death benefits.
Adam & Caroline’s story (Chapter Two)
Remember Adam and Caroline from our first story? After living together for two years, Adam and Caroline decide to get married. Once again, they decided not to update their Wills.
In the event of Adam’s passing, his Will – which leaves his entire estate to his children – will be revoked and the intestacy provisions will apply. The same thing would happen to Caroline’s Will.
Uner the intestacy provisions, in the event of his death, Adam’s estate will be divided between Caroline and his two children in the manner set out in those provisions.
If Adam or Caroline had EPAs, the appointment of any attorney other than their spouse will also be revoked upon marriage.
In summary, in most situations getting married or entering into a civil partnership automatically revokes an existing Will. Similarly, an EPA is revoked upon marriage if it appoints someone other than the spouse. However, both a Will and an EPA can be made “in contemplation of marriage” meaning the documents acknowledge the terms will continue after the marriage.
Separating from your partner
If you separate from your husband, wife or civil partner, it will not automatically revoke your Will or EPA. Depending on your arrangements, your former partner could still inherit assets or retain authority to make financial decisions for you.
However, if you separate from your de facto partner, it will revoke your Will in a similar way to getting divorced.
Brett & James
After same sex marriage was legalised on 9 December 2017, Brett and James couldn’t wait to tie the knot. However, less than a decade later they decided to separate indefinitely and live different lives.
Brett and James had updated their Wills when they married and created EPAs and BDBNs – appointing each other as executors and attorneys. At the time, these documents stated they would leave everything to each other in the event of their passing.
The couple now live separately and the relationship has completely broken down. However, legally their separation alone does not impact those documents, and the terms within them remain in place. In addition, the trust deed for the superannuation fund does not specify that separation impacts the validity of a BDBN.
This means that if something happened to either of them, the other will continue to be his attorney.
If either were to pass, the other will continue to be his executor and will continue to benefit from his estate. The survivor of the deceased will also continue to be eligible to receive their former partner’s superannuation death benefits.
Alternatively, if either (or both) had updated his will before their death to remove any gifts, the survivor would still be entitled to make a Family Provision Application against the estate if he believes he has not been adequately provided for (as described in the Moving in example above). In this instance, the court will ordinarily have regard for any property settlement that has occurred between Brett and James.
In summary, unless you are in a de facto relationship, separation alone does not automatically revoke a Will or EPA. A spouse will continue to be eligible to make an FPA while you are separated but not legally divorced. In addition, in order to remove a former spouse from an EPA, the document would need to be revoked or a new one prepared to replace it.
Getting divorced
Divorce changes how certain provisions in your Will and EPA operate, but it doesn’t necessarily cancel those documents entirely. It also doesn’t automatically resolve every question about your superannuation.
Harry & Hayley’s story
After six years together and having two young children, Harry and Hayley have made the difficult decision to get divorced.
Both have existing Wills, EPAs and BDBNs which appoint each other as executors and attorneys and leave everything to each other in the first instance, then equally to their children.
Their divorce revokes the appointment of their former spouse as their attorney. If they had appointed additional or backup attorneys, those attorneys would be able to act as the attorney. Similar provisions apply in relation to the appointment of executors under their Wills.
Their divorce also revokes the parts of their wills that appoint each other and gift their residuary estate to each other. This means that if Hayley dies, the gift to Harry will be revoked. However, if her will appoints Harry to look after her assets until their children turn 18 years old, Harry can continue to be appointed into that role.
Further, if Harry was receiving maintenance payments from Hayley at the time of her death and is not remarried, Harry can make a FPA against her estate for further provision.
In summary, divorce (or an annulment or separation of a de facto relationship) effectively revokes the entitlements of your former spouse to your estate and any gifts to the spouse or appointment to a role (e.g. as executor or trustee, except in relation to managing assets gifted to their children) will not be effective. However, a Will that has been made ‘in contemplation of a divorce’ will continue to be effective.
In addition, a former spouse is generally not eligible to make a FPA, unless they remain single (i.e. have not remarried or entered into a new civil partnership) and were receiving (or entitled to receive) maintenance at the time of death.
An EPA on the other hand cannot be made in contemplation of a divorce and your former partner’s rights will be revoked upon your divorce.
What about superannuation?
Many Australians underestimate the value of their superannuation, but it forms a significant part of your asset pool.
Your superannuation doesn’t automatically form part of your estate and – depending on your fund’s rules and your arrangements – it may be paid directly to a beneficiary rather than distributed under the terms of your Will.
If you have previously nominated your partner (or former partner) to receive your superannuation, changes in your relationship don’t necessarily mean that nomination will automatically be updated or cancelled.
A de facto relationship, marriage or separation do not impact the validity or contents of your BDBN, unless the trust deed for the superannuation fund provides otherwise.
While a person remains your “spouse”, they are eligible to receive your superannuation death benefits under a BDBN and, if the BDBN is invalid, can apply to the trustee of the superannuation fund to request payment.
A spouse includes a husband and wife (even when separated), a civil partner and a de facto partner.
However, upon divorce (or termination of a civil partnership), typically your former spouse will no longer be eligible to receive superannuation death benefits. This means that a BDBN nominating a former spouse will no longer be valid as the former spouse is not eligible to receive superannuation death benefits.
Take aways
Regardless of whether you are starting, progressing or ending a relationship, these major life events can impact your estate in multiple important ways.
- Your assets could go to someone you didn’t intend: Your existing Will may no longer operate as you expect, or a partner or former partner may have rights to claim against your estate.
- Your superannuation could be paid differently from your other assets: Your beneficiary nomination and the fund’s rules may determine who receives your superannuation death benefits.
- Someone you no longer want involved could retain decision-making authority: An existing EPA may continue to operate after separation, even if your personal circumstances have changed.
In order to protect your wishes, you should always review your estate planning assets with a trusted lawyer as large life milestones occur. If you are going through any of the following situations and would like to discuss your options, please contact Kimberley Barnes for a confidential discussion.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific circumstances It is intended for information purposes only and should not be regarded as legal advice. Further professional advice should be obtained before taking action on any issue dealt with in this publication.