Dealing with the death of a loved one is emotionally challenging enough, but when that death occurs during property settlement proceedings, things can quickly become legally complicated. Whether it’s jointly held assets, superannuation benefits, or the impact of a relationship breakdown, there are several legal considerations that can affect how an estate is managed. Here’s what you need to know to avoid unnecessary stress and confusion.
Jointly Held Assets: Who Gets What
When someone passes away, their jointly held assets often pass directly to the surviving party. This is due to the “doctrine of survivorship,” which ensures that the surviving joint tenant automatically inherits the deceased’s share of the property—no matter what the deceased’s will says.
However, this automatic transfer can cause complications if there were different plans for the distribution of assets. To avoid this outcome, it’s important to sever joint tenancies before death, changing ownership from joint tenants to tenants in common. This gives each individual a distinct share of the property, which can be passed on according to their will.
Superannuation benefits can also be impacted if the deceased has a binding nomination that directs the death benefits to their spouse, regardless of whether the relationship is still intact. If you’ve recently separated, it’s crucial to review and update your superannuation nominations to ensure they reflect your current wishes.
The Importance of Updating Your Will After a Relationship Breakdown
When a marriage, civil partnership, or relationship ends, many people forget to update their wills. Under the Succession Act 1981 (Qld), divorce or annulment automatically revokes certain provisions of the will, such as bequests to the former spouse or their role as executor. But not all bequests are revoked—if there are children involved, the former spouse may still have a role in managing the estate.
If you don’t update your will after a relationship breakdown, your ex-partner may still inherit or maintain other rights, despite the end of your relationship. The best way to avoid this unwanted outcome is to update your will as soon as possible after a relationship change.
Family Provision Claims: Who’s Entitled to a Share
What if there’s a breakdown in property proceedings and one of the parties dies before a settlement is reached? This can lead to further complications, particularly if someone feels they haven’t been adequately provided for. In Queensland, the law allows eligible individuals to make a claim for a larger share of the estate, but this process can become quite complex if property settlement proceedings are still unresolved.
It’s important to note that the court’s decision depends on a number of factors, including the size of the estate and the needs of any competing claimants. If a propertysettlement hasn’t been finalised before death, the surviving party may still be able toapply for further provision from the estate—but they must meet the legal criteria to do so.
Potential Conflicts of Interest: Managing Your Role as an Executor
One issue that often arises when someone dies in the middle of property proceedings is the potential for a conflict of interest. For example, if a legal personal representative is named in the will but also has a personal interest in the property settlement, their role can become complicated. They might find themselves both acting on behalf of the estate and involved in the proceedings.
In these cases, it’s crucial to be mindful of these conflicts and to take steps to manage them. This could involve appointing someone else to handle certain parts of the process to ensure fairness and avoid legal issues.
Final Thoughts: Property Settlement – Protecting Your Estate
The death of a party involved in property proceedings can create significant challenges for everyone involved. However, by taking the right steps—such as reviewing your joint asset arrangements, updating your will and checking your superannuation nominations—you can help ensure that your estate is distributed according to your true intentions. If you’re unsure of what to do, it’s always a good idea to consult with an experienced estate planning lawyer to guide you through the process and help prevent any unintended consequences.
If you haven’t started your estate planning, now is the time. Seek advice from one of our qualified estate planning lawyers to ensure your affairs are in order and your loved ones are looked after.
Take the first step today – speak with one of our estate planning lawyers or start your Will using our secure online Estate Planning Assistant.
