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Why is estate planning important in family law?

Why Is Estate Planning Important In Family Law?

Every family law situation is unique, so it’s important to ensure your estate planning arrangements have considered your current marital or relationship status and your future wishes.

Consider this scenario… You’re in your second marriage which you entered later in life. The house you are living in is owned by your spouse. Your spouse has dementia and is moving into a retirement home, but you are both still very much in love.

Your spouse’s family were never accepting of you and now that your spouse has gone into the retirement home the family are trying to remove you from the house. Your spouse has a Power of Attorney appointing their child as Attorney.

Where does that leave you? As far as the Power of Attorney is concerned, the Attorney must act in the best interests of your spouse. It will be a matter of the facts in your situation as to whether a decision to sell the property is within their best interests. If the decision is made to sell the house and it is in your spouse’s best interests, you may be forced to leave the home you and your spouse once shared – but you may be entitled to a family law property settlement.

In Stanford v Stanford [2012] HCA 52, the High Court of Australia held that married couples do not need to be separated to make a property settlement order, where it is just and equitable to do so. The Court found that it might be just and equitable to make an order if the needs of one party are unmet and cannot be met by a maintenance order.

So, it’s important to be prepared, and sign a Power of Attorney and Appointment of Enduring Guardian while you have the mental capacity to sign such documents. It is also important to choose your Attorney and Guardian carefully. These don’t necessarily have to be family members, but someone who is trustworthy, and capable of making, or assisting you to make, financial decisions.

In the above scenario, had your spouse nominated you as a second Power of Attorney you would have greater control over the decisions being made on behalf of your spouse, and the possible sale of the home you are living in. Although as an Attorney, you must act in the best interests of your spouse.

Another reason to confirm your estate planning documents are up to date is to ensure that the appropriate person to benefit from your estate is nominated in your Will. If you’re in the process of separating, an existing Will appointing your spouse as executor and beneficiary of your estate will still apply until you are divorced, regardless of whether you have completed a property settlement.

If your defacto relationship is coming to an end and you have made a gift to your partner in your Will, the gift will still apply, despite the separation, unless you revise the document.

Another family law consideration when it comes to estate planning is your super nomination. If your relationship changes, remember to check your nominated recipient on your superannuation fund and amend if necessary.

If you’d like to discuss your estate planning or family law needs with one of our expert lawyers, contact us today.

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