I’ve Separated from my spouse - now what?
Separation from a spouse, whether married or de facto, brings many changes and uncertainties. While your immediate focus may be on the emotional and logistical aspects of separation, it’s equally important to address the legal implications concerning your estate plan. Many people are unaware of how separation affects their will, enduring power of attorney, and other legal documents, which can lead to unintended consequences. This article outlines what you need to consider and the steps you should take if you have recently separated from your spouse.
Understanding the "In-Between" Period: Separation vs. Divorce
One of the most common points of confusion is the difference between separation and divorce in the context of estate planning. If you are separated but not yet divorced, your legal status remains that of a married person. This distinction is crucial because the Succession Act 1981 (Qld) treats married and de facto couples differently regarding inheritance and estate administration:
Married Couples: If you are married, your legal obligations and entitlements under the Succession Act remain unchanged until you are legally divorced. This means that even if you are separated, your spouse retains certain rights to your estate.
De Facto Couples: For de facto relationships, the end of the relationship is typically marked by physical separation or some other clear indication that the relationship has ended. This timing can be more ambiguous than a formal divorce, which is why it is critical to update your estate planning documents as soon as separation occurs.
Why You Need to Update Your Will Immediately After Separation
If you are separated, one of the most important steps you can take is to update your will. Here’s why:
Prevent Unintended Inheritance: If you are separated but not divorced and pass away, your current will still treats your estranged spouse as your primary beneficiary. Any gifts or bequests to them will remain valid. This includes your residuary estate (everything left after specific gifts), which might unintentionally go to your separated spouse if your will is not updated.
Joint Tenancy Property Ownership: If you own property as joint tenants with your spouse, the property will automatically pass to the surviving joint tenant upon your death, bypassing your will entirely. To prevent this, it's advisable to sever the joint tenancy, turning it into a tenancy in common, where each party owns a distinct share that can be passed on through a will.
Risk of Will Contestation: A separated spouse, especially in de facto relationships, may still argue they were in a relationship at the time of death and claim rights to your estate. A recent case, In the Estate of HRA. deceased,1 illustrates how a surviving partner unsuccessfully contested a will by claiming de facto status. The surviving partner was unable to prove that a genuine domestic relationship was still in place, but the case highlights how these disputes can arise and why updating your will is essential.
The Importance of an Enduring Power of Attorney
Updating your enduring power of attorney (EPOA) is equally critical. An EPOA allows someone to make financial, health, and personal decisions on your behalf if you become unable to do so. If your estranged spouse remains listed as your attorney, they could retain decision-making power over these important areas.
Replace Your Attorney: If you don't want your separated spouse to be making these critical decisions, update your EPOA to appoint someone you trust.
Appoint a Substitute Attorney: Consider appointing a substitute attorney as a safeguard, especially if your primary attorney is someone older or has potential conflicts of interest.
What Happens If You Don’t Have a Will?
If you die without a will (intestate), the laws of intestacy will govern the distribution of your estate. In Queensland, the spouse receives the first $150,000 of your estate and household effects, with the remainder being split with any children. If you are separated but not divorced, your spouse could still be considered your legal spouse under intestacy rules and potentially claim the bulk of your estate. This scenario could lead to your estranged spouse inheriting a significant portion of your assets while excluding other family members, such as your children or new partner.
Other Key Considerations After Separation
Engage a Family Lawyer: It is crucial to engage a family lawyer to discuss property settlements and, if applicable, file for divorce. Many people delay this step, leading to complications in their estate planning and financial security. At Vicca Law, we collaborate closely with family law firms to ensure that your estate plan aligns with any agreements reached during your separation.
Review Life Insurance and Superannuation Nominations: Alongside your will, check and update your life insurance policies and superannuation beneficiary nominations. Many people forget that these do not automatically change upon separation or divorce. If your former spouse is still listed as a beneficiary, they may receive these funds regardless of your intentions.
Consider Testamentary Trusts: If you are concerned about providing for your children while protecting their inheritance from a former spouse, consider setting up a testamentary trust in your will. This can help ensure that your assets are managed according to your wishes and provide added protection against claims.
Regularly Review Your Estate Plan: Life circumstances change. Even after updating your estate plan following separation, it is wise to review it regularly to ensure it still reflects your current wishes and situation.
Final Thoughts: Take Action Now
The most critical takeaway is that prompt action is essential after separating from your spouse. Failing to update your estate planning documents can leave your assets vulnerable and lead to unintended consequences.
Don't leave your estate plan to chance. If you've recently separated from your spouse or de facto partner, now is the time to act. At Vicca Law, we can help you update your will, sever joint tenancies, and revise your enduring power of attorney to reflect your current wishes. Book a free consultation today at www.viccalaw.com.au or email Lidia directly at lidia@viccalaw.com.au to get started. Protect your assets, your family, and your future—reach out to us today.