February 2023 | Nicola Sharp and Ashley Lovelock
Estate Planning & Second Spouses/Marriages
In the world we live in today, with blended families as the “new normal”, it is essential that you protect your assets and you plan for:
- providing for your children from your previous relationship;
- providing for your surviving spouse from your current relationship; and
- providing for any children from your current relationship.
What this means for you in your blended family arrangement
You both should consider and implement Financial Agreements if you haven’t done so already.
You both should review and update your existing estate planning documents to reflect your wishes and to ensure the necessary protections are in place for your children and each other.
To avoid a situation where your children’s inheritance is reduced because of a separation from a marriage or even a de facto relationship, a Financial Agreement should be considered. A Financial Agreement is binding on the parties under the Family Law Act 1975 (Cth) and deals with how property is to be dealt with in the event of a separation. They are recommended to parties when often they have been through their first marriage and are bringing in their own respective assets. Whilst it can be an “awkward” conversation at the commencement relationship, they are useful in providing certainty for the parties’ future requirements and ensure that the provisions they want are made in respect of the children of their former relationships. A new financial agreement can also provide that any property acquired during the marriage is to be divided in equally or in accordance with the parties’ respective contributions to that property to avoid any nasty litigation down the line.
Ideally, the financial agreement will mirror the intentions in the Wills created by the parties.
Estate planning isn’t just about having a Will, although this is a very important part of your estate plan to ensure the people you would like to see benefit from your estate, do benefit when you pass. Part 2 of this article details what will happen to your estate if you die without a Will.
You should also consider the management of your estate before you die if you were to lose capacity. You should appoint an Attorney under an Enduring Power of Attorney to manage your financial affairs if you lose capacity.
If you lose capacity, you may also want someone to make decisions about your medical care and lifestyle akin to what you would have decided if you were able to make these decisions for yourself. You should appoint a Guardian under an Appointment of Enduring Guardian to authorize them to make these decisions on your behalf if you are unable to make these decisions.
If you have any questions about anything we have outlined above or if you would like further information specific to your personal circumstances, please contact Ashley Lovelock or Nicola Sharp from Harris Freidman Lawyers on 02 9231 2466 to arrange an appointment.