In conversation with The Australian, Suzanne Jones explains how later life divorce can impact inheritance.
Australia’s rapid rise of “grey divorce” – couples splitting after the age of 50 – is causing havoc with inheritances and estate planning, as bigger asset stockpiles cause bigger family fights. But experts say there are ways to protect inheritances and family members.
Coote Family Lawyers partner Suzanne Jones says in some circumstances one or both partners may need to tap their nest egg earlier than anticipated.
“By dividing the assets, it may mean that one or both partners need to resort to the nest egg they once may have preserved to pass on to their children,” she says.
“Older Australians find it difficult to borrow and therefore their ability to regenerate their wealth is restricted when they reach their 50s.
“Divorcees may re-partner and their assets may be redirected to a new partner rather than their children. Decisions will need to be made as to how to divide their wealth on their death.”
Previous inheritances
Suzanne says whether someone inherited wealth during the relationship is another issue cropping up for divorce settlements.
Unless there is a binding agreement between the couple that quarantines inheritance, then the inheritance forms part of the asset pool on separation.
Superannuation
Divorcing couples should check the beneficiaries in their superannuation and update where needed, even if they change their will. Super assets are not part of the estate distributed via a will, and instead depend on decisions by the fund or binding death benefit nominations.
Suzanne says people not seeking advice risk operating under false assumptions.
“For example, you might think that because you’re separated from your former spouse they’re automatically excluded from any benefit in your will or superannuation, but that’s not the case,” she says.
You can read the full article that was published in The Australian here.
If you or someone you know needs advice please contact our office on 03 9840 0035.
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