Skip to main content
Press to call 03 - 9592 3356

How to avoid inadvertently leaving money to your ex

Posted on: July 26 2019

This case study shows the importance of keeping your will up to date and getting the right advice about structuring your estate planning.

Otherwise, you could disadvantage your kids – and give your ex-spouse a surprise cash injection.

Book a time to discuss your will planning

Bob** died recently leaving three adult children behind: Alice, Brian and Chelsea.

Bob separated from his wife Carole (the mother of his three children) 20 years prior. Bob and Carole had done a family law property settlement through the Family Court but had never formally divorced. 

Bob made a will shortly after separating from Carole giving of all of his assets to his three children.

In his will, Bob left his home to Alice, an investment property to Brian and money in a term deposit with NAB to Chelsea. When he made his will, he assumed that the document he was signing disposed of all of his assets to his children according to his wishes. A few years later, Bob decided to change banks because he could get a higher interest rate at the ANZ. He closed the term deposit with the NAB and moved his money to the ANZ.

Further reading: six questions to ask when appointing a power of attorney

On Bob’s death, his ex-wife Carole inherited the money in the term deposit and Chelsea received nothing under the will.

How did this happen?

Because they had never gotten divorced, Carole was still legally Bob’s wife and eligible to inherit under the laws of intestacy. Because she is the mother of his children, Carole as the legal wife of Bob stands to inherit under Victoria’s laws of intestacy.

His will was poorly prepared and did not contain a “catch-all” provision (known as a residuary clause). Because there was no direction in Bob’s will as to who should receive the ANZ term deposit, it passed under intestacy to Carole.

Chelsea, the disappointed daughter, may be able to challenge the will or claim against the estate for a family provision claim. However, this has the effect of plunging the estate into litigation and diminishing the estate through higher legal costs, not to mention creating family conflict.

The case highlights the importance of keeping your will up-to-date. 

A good rule of thumb is to review it every three years or when a major life event happens (such as marriage, divorce, the birth of a child, the death of a nominated executor or beneficiary, acquiring a new asset).

It also highlights the importance of getting your will done by a lawyer who specialises in estate planning so that you get the right advice about how to structure your estate planning.

If you are worried that your will is out of date and needs to be updated, contact us for a no-obligation consultation.

*This article not intended to be legal advice. Individual circumstances vary and you should seek legal advice about your own individual circumstances from an estate planning lawyer.

Our Accreditations

Our Team

Meet Henry Wei, Law Clerk

See All

WILLS

Wills

Minimise any chances of disputes and protect your assets by getting a legal will drafted or amended, or creating a testamentary trust.

Read more

Estate & Succession Planning

Estate & Succession Planning

Get the assistance of an accredited Wills and Estates Specialist with a formal plan for the distribution of your personal, business and family assets.

Read more

Probate

Probate

Assisting executors in the application for a grant of probate and your estate administration.

Read more

Power of Attorney

Power of Attorney

Empowering those you trust to take care of your affairs, should there come a time where you can no longer manage them yourself.

Read more

Property Law & Conveyancing

Property Law & Conveyancing

As accredited Property Law Specialists, we can guide you through the complexities that might arise in property transactions and conveyancing.

Read more

Our Location

Address: 765D Hawthorn Rd Brighton East, VIC, 3187
Phone: (+61-3) 9592 3356
Email: office@baysidewills.com.au

Enquiries

    [recaptcha]

    Liability limited by a scheme approved under Professional Standards Legislation.
    X