In Australia about 30% of first-time marriages and a whopping 60% of second and third marriages end in divorce.
Every week I receive an email or phone call from a divorced or separated person. Some of them have been an ‘ex’ for decades. Some have a long line of exes. Others are in the process of creating an exit strategy. All of them want to know if their former spouse or partner will be able to claim against their estate if they die.
My answer is always the same.
YES.
The new Succession Act 2023 (SA) [section 116(1)] states:
Some people can make a claim against your estate and the Supreme Court may make a family provision order if satisfied that your will does not adequately provide for their proper maintenance, education or advancement.
Some people includes any former spouse or domestic partner of the deceased (unless, immediately before death, a valid financial agreement under the Family Law Act 1975 (Cth) made on or after 1 January 2025 was in force between the deceased and their former spouse or domestic partner [s 115(2), Succession Regulations 2024 (SA) reg 9])
Succession Regulations 2024 (SA) reg 9] says… for the purposes of section 115(2) of the Act, a valid financial agreement (within the meaning of the Family Law Act 1975 of the Commonwealth) between the deceased person and the former spouse or former domestic partner entered into on or after 1 January 2025 that, immediately before the death of the deceased person, was binding on the parties is an agreement of a prescribed kind.
And now in plain English
A former spouse or partner can make a claim against your estate if your will does not adequately provide for their proper maintenance, education or advancement IF you die without a valid financial agreement in place OR you and your former spouse or partner did not enter into a binding agreement of a prescribed kind.
...
A fair question would (and should) be "Fiona, what is 'an agreement of a prescribed kind'?"
I'd love to tell you but, whilst the new legislation aims to make it more difficult for disgruntled former partners and spouses to claim against an estate, the exact definition of 'a prescribed agreement' has yet to be provided.
I'm not going to lie, this bit of legal haze makes my lawyer spidey senses twitch which means I continue to hand out the advice that couples protect themselves from any future claims by formalising any financial settlement.
When in doubt go formal
I’m not generally a formal kind of girl. Except when it comes to the law and then I’m a card-carrying super fan of crossing all the T's and dotting all the I's.
When it comes to separation and divorce many couples see an amicable, informal division of assets as the pinnacle of kindness.
You have this, I'll take that, we'll split the bills, don't worry about the super. We just want to be kind.
The reality is nothing could be further from kindness.
Informal arrangements (whether they're loose AF verbal agreements or seemingly water-tight written documents) do not offer the same protections as a legally binding agreement, consent orders or court orders
Just in case you're not sure if you fit into this category an informal financial agreement can look like any of the following;
- walking away leaving everything to your ex
- letting your ex walk away with everything
- agreeing between the two of you how you will divide assets and liabilities without completing a binding agreement
- using a mediation service agreement, a conveyancer agreement or a stamp duty exemption form without completing a binding financial agreement or consent orders made by the court
How can I tell if my financial settlement has been formalised?
If you have been separated or divorced for some time you may not know if your settlement was formalised or not.
The most effective way to find out is to approach the lawyer who helped you at mediation and ask if they lodged an Application for Consent Orders at the courthouse on your behalf. This document is used to record, finalise and formalise the terms of any agreement you and your former partner make (you will not have had to attend the court in person).
After paying a fee a Registrar from the Federal Circuit & Family Court of Australia would have reviewed your Application and then made formal orders in line with the draft Minutes of Order submitted. You would have received a formal-looking document with a red stamp on it and a Federal Circuit & Family Court of Australia Registrar's signature setting out the terms of the agreement.
.Still not sure? Reach out to me to see what I can do to help.
The risks of an informal financial settlement
No matter how amicably made, how bitter your separation has been, how angry or guilty or sad you feel opting for an informal financial agreement opens you up to a whole lot of ifs;
If the other party fails to stick to the agreement you’ve made, getting them to deliver what they initially agreed on is not legally binding or enforceable.
If a couple divides their finances, either party retains the right to later apply to the court for further adjustments, irrespective of what they’ve already received or given and even if they consider the matter to be resolved.
If you and your former spouse had a joint liability (for example a mortgage, loans or credit card debt) and they fail to make payments creditors may pursue you to fulfil the outstanding obligations – even if an informal arrangement was made to the contrary.
If the matter is raised by any party in the future, any additional assets, liabilities, or superannuation accumulated by either party will be considered part of the asset pool. This includes assets either party acquires as part of a new relationship.
And yes, if when you die it's deemed that you've failed to adequately provide for your ex-spouse or ex-partner they can make a claim against your estate.
The moral of the story
Not every marriage or relationship has a fairytale ending but you don't need your death to be the start of a nightmare for your family or beneficiaries.
If you've just separated or divorced or are considering it in the future make it your business to formally end one thing before you move on to something (or someone) else.
If you've been separated or divorced for a long time this is your cue to get legal advice about your estate so you can make any changes that need to be made BEFORE you die.
Click the link below to make time for a no-obligation chat about what life will look like for your family if you die without a formal financial settlement.