Taking control of your estate during divorce

Breaking up is hard to do, as the song says – emotionally, spiritually and financially. If you’re going through a divorce, the last thing you probably feel like thinking about is the possibility of something happening to you.

However, if you’re going through or even contemplating a divorce, finding out what would have happened to your worldly possessions, if you had died or been disabled yesterday, should be looked at as a matter of priority.

Although you may be separated from your spouse, in perhaps body and or soul, in the eyes of the law you are still legally married until a judge signs the divorce papers.

This means if something were to happen to you and you died or became incapacitated, your estranged partner could still have control over your estate – not a thrilling prospect for most people.

For example, if you did not have a Will in place and you died during a divorce, your estranged spouse would automatically be entitled to control your estate, and depending on whether or not you have kids, would most likely be entitled to at least half, if not all, of your assets.

So if you’re going through a divorce or separation, it’s important to review and revise your Will as soon as possible.

It’s not just your Will you need to worry about, at this time.

It’s also considerations such as how to ensure debts are covered in the event of your death or incapacity while leaving enough for the ones you care about, making sure your have nominated beneficiaries for your insurance policies, superannuation and pensions, the tax implications and how any assets would be reallocated if a beneficiary were to die before you.”

After all, you’ve worked hard to build wealth so you want to make sure that your wishes would be handled in the way that you intended when you’re gone. Or at least they are more likely to be respected.

Of course, it’s not just your divorce that could have a huge impact on your family succession planning, but also any other changes in marital status for you or your beneficiaries.

For example, one day you may decide to remarry – and it is to someone who has also been married previously.

Or perhaps one of your children will separate, or decide to marry someone at risk of bankruptcy or with a gambling problem.

If this happens you’ll want a plan in place to ensure your final wishes are met.

These days with more and more people getting divorced, remarrying and starting blended families, estate planning is becoming increasingly complicated so financial advice is crucial.

A professional adviser can work closely with your solicitor to help you cut through the legal jargon and find out what is most important to you. That way you can rest assured if anything happens to you, your final wishes will still be met.

Without a good plan, particularly with the added complexity a divorce can bring, there can be very sad consequences: from family squabbles and legal wrangling to unanticipated tax losses.

For help to working through your estate planning issues following a divorce contact *Hugh RI Advice - RetireInvest on 03 9471 0080 today.

*Hugh Kilpatrick is an Authorised Representative of RI Advice Group Pty Limited (ABN 23 001 774 125), Australian Financial Services Licence 238429. This editorial does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.