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Advising global cryptocurrency exchange operators on entry into Australian market July 31, 2018

The rise in popularity and demand for cryptocurrency trading has resulted in a number of cryptocurrency exchange operators expanding into different countries, including Australia, to create a global brand. In Australia, new laws and regulations … Continued

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Maddocks advises French firm on major construction company acquisition August 6, 2018

Monday 6 August 2018 Law firm Maddocks recently advised French firm Bouygues Construction on its acquisition of leading Australian construction and fitout business AW Edwards. The acquisition is a key part of Bouygues’ continued expansion … Continued

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Do your construction documents conform with the new Ministerial Directions and Instructions for Public Construction Procurement? August 15, 2018

Are you a state government department or public body which procures public construction works and services? Are you in the process of determining which form of contract will be most appropriate for your procurement to issue … Continued

Same-Sex Marriage: Implications on Estate Planning for all

The recent legalisation of same-sex marriage in Australia, serves as a good opportunity to remind ALL people contemplating marriage about the implications of marriage, and divorce, on their succession planning. It is important that couples consider the effect of their marriage on their estate planning documents and update them accordingly.

Wills

In all Australian states and territories, marriage revokes a Will that is made prior to marriage.[1]

If a new Will is not created once married, at the time the person passes away, they will be deemed as not having made a Will. This means that the person’s assets will be distributed in accordance with legislation, possibly in a manner that was not intended by the deceased person.[2]

Exception to the general rule

An exception to the revocation of a Will upon marriage applies where the person made the original Will in contemplation of marriage. The application of this exception differs across the states and territories.

Victoria, New South Wales, Tasmania, Queensland, Northern Territory Western Australia, South Australia, ACT
The exception applies where a Will is made, expressly or impliedly, in contemplation of marriage to a named person, or of marriage generally. The exception will apply where a Will is made in contemplation of marriage to a named person.

To do this, a Will needs to specifically state that the will maker is making the Will in contemplation of marriage to their partner.

Overseas marriages now recognised, but Wills need to be revised

Same-sex couples who have married overseas in accordance with the marriage laws of those countries will now have their marriages recognised under Australian law. If you or your spouse made a Will before the new Australian laws came into effect, it is possible that those Wills are now invalid.

But what about divorce?

Divorce affects your Will in different ways depending on which state or territory you are in.

Victoria, New South Wales, Tasmania, Queensland, Northern Territory, South Australia, ACT Western Australia
Unless a contrary intention is expressed in the Will, on divorce, the following will be revoked:

  • a gift to a former spouse: that gift will pass as if the former spouse had predeceased the testator
  • an appointment of the former spouse as an executor, trustee, or guardian
  • a grant made by the Will of a power of appointment exercisable by, or in favour of, the former spouse.
Divorce revokes a Will unless a contrary intention is expressed in the Will or other evidence exists to prove such an intention.

Importantly, separation does not affect a Will. If the Will is not updated on separation and the testator dies, then their existing Will remains valid. Therefore, it is important to ensure that all estate and succession planning documents are updated to reflect any changes in circumstance, as they arise.

Other considerations

Not all of your assets are necessarily covered by your Will.

Superannuation nominations

Marriage is unlikely to affect a nomination for superannuation purposes. If a person has nominated their (unmarried) spouse as their beneficiary, then that nomination will stand when those persons are married. A beneficiary is a person who is nominated to receive the superannuation benefits (death benefit) on your death. Generally, your beneficiary or beneficiaries must be a dependant. Dependants can include your current spouse or partner, your children or any other person who is financially dependent on you or in an interdependent relationship with you.

If you have not nominated a person prior to your marriage, then marriage provides a sensible time to review these arrangements.

Powers of Attorney

Consider making arrangements to appoint a substitute decision maker. For example, appointing a person under an enduring power of attorney to make financial and personal decisions on your behalf if you become legally incapacitated.

The effect of marriage and divorce on substitute decision making appointments differs depending on which state or territory you are in. For example, in Victoria, separation or divorce does not automatically revoke an existing or enduring power of attorney. By contrast, in Queensland, if you divorce, the power of attorney is revoked to the extent that it gives power to your former spouse.

Asset protection strategies

Binding financial agreements are similar to pre-nuptial agreements, in that a couple can use them to set out how their property and other assets would be divided if they were to separate. Couples can also use a binding financial agreement to deal with issues such as spousal maintenance.

Seek specialist family law advice before entering into binding financial agreements.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Private Client Services team.

[1] Section 13 of the Wills Act 1997 (Vic); Section 12 of the Succession Act 2006 (NSW); Section 14 of the Succession Act 1981 (Qld); Section 20 of the Wills Act 1968 (ACT); Section 20 of the Wills Act 1936 (SA); Section 14 of the Wills Act 1970 (WA); Section 16 of the Wills Act 2008 (Tas); Section 14 of the Wills Act 2015 (NT).

[2] See Administration and Probate Act 1958.

The recent legalisation of same-sex marriage in Australia, serves as a good opportunity to remind ALL people contemplating marriage about the implications of marriage, and divorce, on their succession planning. It is important that couples consider the effect of their marriage on their estate planning documents and update them accordingly.

Wills

In all Australian states and territories, marriage revokes a Will that is made prior to marriage.[1]

If a new Will is not created once married, at the time the person passes away, they will be deemed as not having made a Will. This means that the person’s assets will be distributed in accordance with legislation, possibly in a manner that was not intended by the deceased person.[2]

Exception to the general rule

An exception to the revocation of a Will upon marriage applies where the person made the original Will in contemplation of marriage. The application of this exception differs across the states and territories.

Victoria, New South Wales, Tasmania, Queensland, Northern Territory Western Australia, South Australia, ACT
The exception applies where a Will is made, expressly or impliedly, in contemplation of marriage to a named person, or of marriage generally. The exception will apply where a Will is made in contemplation of marriage to a named person.

To do this, a Will needs to specifically state that the will maker is making the Will in contemplation of marriage to their partner.

Overseas marriages now recognised, but Wills need to be revised

Same-sex couples who have married overseas in accordance with the marriage laws of those countries will now have their marriages recognised under Australian law. If you or your spouse made a Will before the new Australian laws came into effect, it is possible that those Wills are now invalid.

But what about divorce?

Divorce affects your Will in different ways depending on which state or territory you are in.

Victoria, New South Wales, Tasmania, Queensland, Northern Territory, South Australia, ACT Western Australia
Unless a contrary intention is expressed in the Will, on divorce, the following will be revoked:

  • a gift to a former spouse: that gift will pass as if the former spouse had predeceased the testator
  • an appointment of the former spouse as an executor, trustee, or guardian
  • a grant made by the Will of a power of appointment exercisable by, or in favour of, the former spouse.
Divorce revokes a Will unless a contrary intention is expressed in the Will or other evidence exists to prove such an intention.

Importantly, separation does not affect a Will. If the Will is not updated on separation and the testator dies, then their existing Will remains valid. Therefore, it is important to ensure that all estate and succession planning documents are updated to reflect any changes in circumstance, as they arise.

Other considerations

Not all of your assets are necessarily covered by your Will.

Superannuation nominations

Marriage is unlikely to affect a nomination for superannuation purposes. If a person has nominated their (unmarried) spouse as their beneficiary, then that nomination will stand when those persons are married. A beneficiary is a person who is nominated to receive the superannuation benefits (death benefit) on your death. Generally, your beneficiary or beneficiaries must be a dependant. Dependants can include your current spouse or partner, your children or any other person who is financially dependent on you or in an interdependent relationship with you.

If you have not nominated a person prior to your marriage, then marriage provides a sensible time to review these arrangements.

Powers of Attorney

Consider making arrangements to appoint a substitute decision maker. For example, appointing a person under an enduring power of attorney to make financial and personal decisions on your behalf if you become legally incapacitated.

The effect of marriage and divorce on substitute decision making appointments differs depending on which state or territory you are in. For example, in Victoria, separation or divorce does not automatically revoke an existing or enduring power of attorney. By contrast, in Queensland, if you divorce, the power of attorney is revoked to the extent that it gives power to your former spouse.

Asset protection strategies

Binding financial agreements are similar to pre-nuptial agreements, in that a couple can use them to set out how their property and other assets would be divided if they were to separate. Couples can also use a binding financial agreement to deal with issues such as spousal maintenance.

Seek specialist family law advice before entering into binding financial agreements.

More information from Maddocks

For more information, contact Maddocks on (03) 9258 3555 and ask to speak to a member of the Private Client Services team.

[1] Section 13 of the Wills Act 1997 (Vic); Section 12 of the Succession Act 2006 (NSW); Section 14 of the Succession Act 1981 (Qld); Section 20 of the Wills Act 1968 (ACT); Section 20 of the Wills Act 1936 (SA); Section 14 of the Wills Act 1970 (WA); Section 16 of the Wills Act 2008 (Tas); Section 14 of the Wills Act 2015 (NT).

[2] See Administration and Probate Act 1958.