At Tonkin Legal, we are often asked what parents should do in terms of updating their will if their child has separated from their partner.
The thinking behind this question is ‘If I die while my child is involved in a family law property settlement, will any gift to them form part of the asset pool for distribution between them and their former spouse?’ The answer is relatively straight forward:
- If you are still alive when your child’s separation occurs, it’s unlikely that the inheritance will fall into the asset pool for division.
- If, however, your death occurs before your child’s separation, the chance of any inheritance forming part of the asset pool for division is increased.
In any event, the possible separation of a child from a partner is something any parent should consider when making a Will.
Other ways to protect your child’s inheritance
There can be no guarantee that a Will of a parent containing an inheritance to a child will operate to avoid benefitting an estranged spouse of that child. However, Wills can be drawn containing trust provisions which allow a separating child to make their former spouse’s claim to inherited assets more difficult to maintain.
Wills can be prepared which, if death of the willmaker brings them into play, leverage the negotiating powers of the child inheriting: they make the task of claiming these funds more complex and problematic for the former spouse.
In some cases, it may be possible to structure the parent’s assets so that they do not fall into the their estate on death, and therefore cannot be passed on via the Will to an adult child who may develop family law problems. Discretionary Trusts and superannuation funds (including self-managed superannuation accounts) may be relevant and useful here.
In summary, a separating child is a sound reason to review your testamentary affairs, including (but not limited to) your Will, but asset protection should be considered as early (and as widely) as possible.
As always, seek professional advice in relation to your own personal circumstances.