Couples in Australia have fought about inheriting something from a Will in more ways than one. Sometimes, it has led to a fair division, but at other times, it has turned their relationship even more sour. If you’re situation is the latter, then you might want to know how to protect your inheritance from your spouse in Australia.
So why do couples fight over inheritance? Naturally when a Will-maker dies, their child and their spouse can inherit something from them. This could be property, inheritance money, heirlooms, and any possible asset the Will-maker had.
Inheriting assets or wealth from a loved one can be a bittersweet experience. Still, it also raises important considerations, especially when you have concerns about protecting your inheritance. What if you had a divorce? Does your spouse want more inheritance than you do?
If you want to prevent these instances, read the article below on how to protect your inheritance from your spouse in Australia:
Understand the Legal Framework
The first step on how to protect your inheritance from your spouse in Australia is to understand the law. Family and inheritance disputes will almost always involve legal proceedings. Let’s discuss the primary Act that governs family law matters in Australia; The Family Law Act 1975.
The Family Law Act contains principles and processes for property settlements during divorce or separation in Australia. To protect rightful beneficiaries, the Act sets out general principles that the court considers during property settlement cases. The principles that the court will follow include:
- Identifying and valuing the property and asset pool, liabilities, and financial resources of the parties;
- Considering the financial contribution made by each party;
- Assessing the future needs of both parties; and
- Determining whether the proposed final property settlement is just and equitable.
However, there is no formula that one can use to divide property and finances, and the court will decide after evidence is heard. The judicial officer decides what is just and equitable based on the unique facts of the case.
How Can a Financial Agreement Help You?
Do you want to know how to protect your inheritance from your spouse in Australia? Then you can secure a binding financial agreement (BFA).
A BFA under the Family Law Act 1975 is a legally binding document that sets out the financial arrangements between two parties in the event of separation or divorce. These agreements can be entered into before, during, or after a marriage or de facto relationship.
There are different types of financial agreements, including:
- Prenuptial agreements which are entered before a marriage,
- Post-nuptial agreements which are entered after a divorce, and
- Cohabitation agreement for de facto couples who want to secure their assets in the event of a separation
Here are some of our blog articles that discuss financial agreements in detail:
- Other Provisions About Financial Agreements
- Family Law Orders and Financial Agreements
- FLA Provisions on Financial Agreements
How To Protect Your Inheritance From Your Spouse in Australia: Aspects of a BFA
1. Legally Enforceable
A binding financial agreement is a legally enforceable document that can prevent either party from making a claim on the other’s property pool or assets in the event of separation or divorce. To be a valid binding financial agreement, the parties must satisfy the following requirements:
- The agreement must be in writing and signed by all parties involved.
- Each party must seek independent legal advice from a qualified lawyer about the effect of the agreement on their rights and the advantages and disadvantages of entering into the agreement.
- The agreement must not be entered into under duress, fraud, or undue influence.
- The agreement must specify the relevant provisions of the Family Law Act that the parties seek to exclude or modify.
- The agreement must be fair and reasonable at the time it was made.
2. Court’s Power to Set Aside a Financial Agreement
The court has the power to set aside financial agreements in certain circumstances, as set out in sections 90K (for Financial Agreements about marriages) and 90UM (for Financial Agreements about de facto relationships) of the Family Law Act 1975.
3. Entering into a Financial Agreement
Parties can enter into a financial agreement before the de facto relationship(section 90UB), during the de facto relationship (section 90UC), or after the de facto relationship (section 90UD) of the Family Law Act 1975. It is mandatory to get professional legal advice before entering into a financial agreement.
To ensure that a financial agreement is valid and enforceable, it is crucial to consult with a qualified family lawyer who can provide guidance on the specific requirements and circumstances of the case.
Can Separate Bank Accounts Prevent Inheritance Disputes?
Yes! As the saying goes “prevention is better than cure.” So, it’s best to take precautionary measures if you want to know how to protect your inheritance from your spouse or children.
First, you can maintaining a separate bank account specifically for your inheritance funds. This can help provide a clear distinction between inherited assets, joint marital assets, and protected assets.
Make sure to deposit funds into a separate account and resist adding your spouse’s name to any inherited property titles or accounts. This way you can reduce the risk of your inheritance being considered joint marital property in the event of a separation or divorce.
Generally, courts will treat inheritance as a separate property of the person who received them. However, if the inheritance is commingled with joint assets or used to acquire joint assets, such as a property, it may become part of the marital property and subject to division in the event of a divorce.
How To Protect Your Inheritance From Your Spouse in Australia? Talk It Out
The simplest answer to the question “How to protect your inheritance from your spouse in Australia?” is to establish open communication with your other half.
No one wants to spend huge legal costs when disputes arise. Most of the time, such disputes just happen because of one or the other’s ego or selfishness. Sit it down with your partner, stay serious, and discuss how and when to split the inheritance.
If you can reach an amicable agreement, the better. By having an open and honest conversation, you can establish a mutual understanding of each other’s expectations and concerns, which can help prevent misunderstandings and disputes in the future.
Di you and your spouse can reach an agreement? it’s advisable to formalise it by applying for consent orders through the Family Court or entering into a binding financial agreement. This can help ensure that the agreement is legally binding and enforceable, and can provide clarity and certainty for both parties.
If the talk didn’t go to well, then you can speak to a family lawyer.
Approach Us About Property Settlement Matters
We understand that money matters can spark heated arguments and can put a tension between relationships. Even the perfect relationship or marriage can end because of this. To help ease such tension, we at JB Solicitors can guide you on how to protect your inheritance from your spouse in Australia through mediation.
Our family lawyers can help mediate and create proactive asset protection plan and understand your rights under family law. By familiarising yourself with the legal framework, considering a financial agreement, maintaining a separate account, and keeping meticulous records, you can keep your inheritance separate from your spouse in case of a relationship breakdown.
Contact us today for all your family law matters, such as property settlement negotiations or inheritance disputes with any disputed parties. You can also reach out to us for all other legal matters.
