Living arrangements, access to children and the division of property are usually the main priorities for people when a relationship breaks down. However, when going through a breakup, it’s not uncommon for important issues to be put on the backburner. If you’re not careful, this can lead to some unintended and catastrophic results.
Here’s 4 things you should bear in mind:
1. Enduring Power of Attorney (EPA)
Regardless of whether a separation actually occurs, it’s a good idea to have an enduring power of attorney set up. An EPA can only be revoked by the termination of a registered relationship or divorce (and even then, only to the extent it gives the divorcee power). This helps to protect your interests in a worse-case scenario.
Finalizing a divorce or separation is a messy affair at the best of times. Getting yourself a new EPA will ensure that the right people are appointed to make personal, health and financial decisions if the need arises.
2. Your Will
It’s important to be proactive when dealing with life-after-death. Getting your affairs in order now means that your family will have one less worry at a tremendously difficult time. Ensuring that you have a Will in place will provide ongoing security for your family and peace of mind for you that, no matter what happens to you, those you love will be looked after.
Like an EPA, only a divorce or termination of a registered relationship can revoke a Will. After you and your partner separate, it’s important to create a new will that reflects your changed circumstances. Remember that until your divorce or separation is finalised, that person remains your “spouse”. In other words, it doesn’t matter how long you’ve been apart for: if you didn’t finalise the paperwork, your ex can still make a claim against your estate.
3. Your Superannuation
For a word that starts with “super”, superannuation may be one of the more boring topics in the world. Still, there’s a reason it’s on this list. Bear in mind that, on top of your member balance, your super provider may have a life insurance policy.
It might sound like a contradiction in terms, but you should think about your “death benefits”. That is, who receives your Super balance and associated life insurance money when you die. A binding death benefit nomination (BDBN) binds a superannuation trustee to pay your superannuation death benefits to your nominated beneficiary (spouse, child, or your estate).
When you re-enter the relationship market, remember to update your BDBN to ensure that your death benefits go to the right person.
4. Jointly Held Assets
A good couple is one that shares. You should be totally open with your partner – share your secrets, your desires, your mortgage… Well, maybe not that last one. See, although these assets are likely to be dealt with as part of your property settlement, you might still run into trouble down the track.
In the event of your death, assets held as “joint tenants” will automatically pass to the surviving joint owner, irrespective of what it says in your will. You won’t have any ability to control what happens to your property from beyond the grave. If you weren’t dead, this would be highly embarrassing for you.
We recommend severing your joint tenancy and instead holding your assets as “tenants in common.” This means that both you and your partner can hold their own interest in the asset. Once the tenancy (and relationship) comes to an end, you can direct how your share of the property will be dealt with.
Take it from us: the consequences of not having your affairs in order are never simple. Contact our Estate Planning Team to get your affairs in order today.