Marriage preparation or beginning a new defacto relationship can be a wonderful and exciting time, with much to plan and prepare.
But there are important things to consider. There are bound to be new financial responsibilities and obligations, particularly if you are bringing substantial assets into the relationship or have responsibilities for children of prior relationships. If you don’t think about these issues, they may come back to haunt you.
Four things to consider before you take the big step:
- Firstly, you should make a Will (or have your existing Will updated) to specify who is to benefit from your estate should you die. This is because if you have a Will and marry, then the existing Will is immediately revoked and you need to do a new one. If you don’t make a new Will and you die, then your estate is distributed according to the rules of Intestacy. Your spouse receives your assets, or, if you have children, your spouse shares the estate with them. The same applies for a defacto spouse, where the relationship has been going for two years or more (or less if there are children involved).
If you don’t have a spouse or children, your estate is distributed to your closest relatives; first parents, then siblings, grandparents and finally aunts and uncles.But note that when you make a Will if you don’t provide properly for your spouse or children in that Will, then following death, they are eligible to make a ‘Family Provisions Application’ in the Supreme Court for a fair share of your estate. This can cause your relatives or those people you do wish to benefit considerable anguish.
- What if the relationship fails? Naturally, you don’t wish this to happen, but it can, and sometimes does. Following a marriage, your spouse can immediately make a Family Law claim for a share of your property or for maintenance, following a separation. A defacto spouse qualifies to have the same rights after two years of cohabitation (or earlier if there are children) or if they have made a substantial contribution. Their entitlements may be small at first, but they quickly grow, particularly after children come along.
- To prevent some of these problems, prior to the marriage, you can enter into a Financial Agreement. This sets out what is to happen to your assets and income in the event of separation or death. Negotiating such agreements can be a cause of friction and conflict for new couples. However, they are extremely effective in avoiding claims and court actions and protecting your assets.
- Lastly, entering a new relationship is also a good opportunity to draw up a Power of Attorney and Enduring Guardianship: if you are unable to make decisions yourself because of illness or injury, you must have made arrangements for persons you most trust to make decisions about your finances and personal care.
Contacting an experienced Family Lawyer to discuss your situation and put proper documents in place before the big event can do wonders for your peace of mind and the future security of you and your family.
*Andrew Corish is an Accredited Specialist in Family Law with Corish & Co Specialist Family Lawyers North Sydney. He is trained in Family Dispute Resolution.