Separated But Not Divorced Inheritance
If you are separated but not divorced, your marital status can still influence your inheritance.
Under Australian family law, assets—including inheritances—may be subject to property settlement during a divorce.
This means that even after separation, an inheritance received by either party could be considered in the division of assets unless it is specifically protected through legal agreements or proper estate planning.
Does Separation Affect Inheritance Rights?
Separation does not automatically alter inheritance rights between spouses. While living apart signifies a relationship breakdown, the legal marriage remains intact until a divorce is finalised. This means that:
- If your spouse passes away while you are separated, you may still have inheritance rights under their will.
- If they die intestate (without a will), you may inherit a portion of their estate under intestacy laws.
- Any inheritance you receive during separation could still be included in property settlement discussions if you proceed to divorce.
Key Takeaway: Separation does not nullify inheritance rights, making proper estate planning critical during this period.
Can Your Inheritance Be Protected After Separation?
Inheritance can be protected after separation, but steps must be taken to ensure it is not considered a shared asset during property settlements. Strategies include:
- Creating Binding Financial Agreements: These agreements can outline how future inheritances will be treated and prevent them from becoming part of the marital asset pool.
- Keeping Inheritance Separate: Avoid using inherited funds for joint expenses or placing them in shared accounts, as this may categorise them as joint property.
- Seeking Legal Advice: Consulting a family lawyer ensures your inheritance is handled appropriately during separation or divorce.
Key Takeaway: Proactive measures such as financial agreements and separate accounts can safeguard inheritances post-separation.
How Does a Will Affect Inheritance During Separation?
A will dictates how assets are distributed upon death, but separation complicates matters. If you or your spouse pass away during separation:
- Existing Wills: If your spouse remains a beneficiary in your will, they will still inherit unless the will is updated.
- Intestacy: If there is no will, the laws of intestacy apply, and the surviving spouse may receive a share of the estate regardless of the separation.
- Family Provision Claims: A separated spouse may still challenge the will if they believe they were unfairly excluded or not adequately provided for.
Updating your will promptly after separation is an effective way to reflect your current wishes.
Key Takeaway: Reviewing and updating your will during separation helps ensure your estate aligns with your intentions.
Inheritance and Property Settlements After Separation
During property settlements, inheritances are generally treated as part of the asset pool, depending on:
- Timing of the Inheritance: Inheritances received before separation are more likely to be considered shared assets, while those acquired after separation may be treated differently.
- Usage of Inheritance: If inherited funds or assets were used for joint purposes, such as buying a home or paying off debts, they may be included in the asset division.
- Contributions by Both Parties: Courts consider financial and non-financial contributions when determining how inheritances are divided.
Key Takeaway: How inheritances are handled in property settlements depends on their timing, usage, and the broader financial circumstances of both parties.
Legal Steps to Protect Your Inheritance
If you wish to protect your inheritance during separation, consider the following steps:
- Update Your Estate Plan: Review your will, superannuation beneficiaries, and other estate planning documents.
- Create a Financial Agreement: Clearly define how future inheritances will be handled in case of divorce.
- Seek Independent Legal Advice: Work with a lawyer to ensure your actions align with Australian family law.
By addressing these issues early, you can minimise disputes and preserve your inheritance for its intended purpose.
When separated but not divorced, inheritance remains a complex issue. Your marital status can influence inheritance rights, and inheritances received during this period may be subject to property settlements.
By understanding your legal position and taking proactive steps, you can ensure your inheritance is handled by your intentions.
