As an adviser, understanding the intricacies of the Family Law Act is crucial, especially when dealing with clients who have been in prior relationships. Here’s what you need to know to guide your clients effectively and safeguard their assets.
Understanding the 2-Year Claim Period
Under the Family Law Act, clients who have ended a marriage or de facto relationship have a period of 2 years to bring a claim to the court for the division of property interests. This period is essential for settling financial matters and ensuring that all parties' interests are properly addressed.
The Risk of Family Provision Claims
If a client passes away within those two years, their former spouse or domestic partner can bring a family provision claim on their estate. This is especially significant if the former partner has been excluded from the client's Will. It is essential for clients to be aware of this possibility and take proactive steps to protect their estate.
Key Steps for Advisers
To effectively advise clients with prior relationships, consider the following action items:
Finalise Financial Interests: Ensure your clients finalise financial interests with their former partners. This step helps prevent future claims and provides financial clarity.
Be Aware of the 2-Year Claim Period: Make sure clients understand the 2-year period for the division of property. This awareness is crucial for timely and effective estate planning.
Recognise Family Provision Claims: Educate your clients about the risk of family provision claims if they pass away within two years of separation. This knowledge can help them take necessary precautions.
Review and Update Wills: Encourage clients to regularly review and update their Wills to address potential claims from former partners. This is a vital step in protecting their estate.
Consult with a Lawyer: Advise clients to consult with a lawyer about protecting their estate from former partner claims. Professional legal advice can provide tailored strategies for safeguarding assets.
Ensure Legal Documents Are Current: Ensure that all of your clients' legal documents reflect their current wishes and situation. Regular updates help prevent disputes and ensure that clients' intentions are honoured.
Regularly Review Estate Plans: Encourage clients to review and update their estate plans as needed regularly. This ongoing process ensures that their plans remain relevant and effective.
Protecting Your Clients' Estates
Taking these actions can help safeguard your clients' estates and provide peace of mind. As an adviser, your role is to provide comprehensive guidance and support, helping clients navigate the complexities of estate planning and protect their assets effectively.
Review and update clients' estate plans regularly as needed. For a structured estate planning process while eliminating legal advice risk, contact our team.
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