Unbeknownst to most, even following a property settlement, your former partner may continue to have a claim on your estate once you pass away.
When you separate, it is advised and encouraged that you finalise your property settlement with the Federal Circuit and Family Court of Australia, your Divorce (if you were married) and to update your Last Will and Testament. This is seen as the best way to protect your assets whilst you’re alive and when you pass away.
However, despite having finalised your property matters, being Divorced and updating your Will to reflect your wishes, your former partner is still able to make a Family Provisions Claim after you pass away.
The reason for this is that section 57 of the Successions Act 2006 (NSW) provides that a former spouse, including de facto spouses are entitled to make a Family Provision Claim on your Estate, regardless of any property settlement or Divorce that has occurred.
The success of your former partner’s claim may be problematic as you have taken the steps to sever your relationship and reflect your intentions, however, they still have grounds to make a claim and apply to the Supreme Court of New South Wales.
What can you do to protect your Estate from your former partner?
Section 95 of the Successions Act 2006 (NSW) allows parties to release their right to be able to make a Family Provision Claim on the other parties’ Estate. This would apply to both you and your former partner. This means that neither of you would be able to make a claim on the other’s Estate, meaning your financial relationship whilst you are alive and after you have passed away is severed.
In order to do this, during or after your family law financial settlement, you are able to enter into a written agreement that releases both you and your former spouse from being able to make a Family Provisions Claim.
Prior to entering into the agreement, each party is required to seek independent legal advice as to the advantages and disadvantages. For this reason, it is easiest to seek this advice and enter into the agreement at the time of your property settlement as you have already engaged your lawyer and are receiving advice from them.
Once independent legal advice is given and the agreement is signed, the agreement is then filed with the Supreme Court of New South Wales to be reviewed and approved. In the absence of the approval of the Supreme Court, the written agreement is not binding.
If you would like to know whether a Section 95 Release is appropriate for you and your family, please contact our office to arrange an appointment with one of our friendly team members.