Donate Child Support Calculator
Skip navigation

Will's and the dreaded ex!

Add Topic

This is what applies in WA

I have not come across much on here about wills so expect there might be a fair amount of activity on this topic.

Regarding trying to stop the ex from getting your estate through the children there are a number of things you can do:

If you have remarried and don't want the ex to get hold of your new spouse's assets etc…It is advisable that Wills contain copies of court orders for care and especially property settlement and outline what the new spouse has brought to the relationship so in the event of a dispute the Executor can determine what assets would be subject to the dispute.

Take out brand new life insurance policies so there are no records of the ex with the insurance company. In general life insurance can be paid to the beneficiary and does not have to come into the estate that can be contested, however if the insurance company is aware of ex's etc… and you have not provided a binding nomination then they may at their discretion pay who they believe the beneficiaries to be which could delay payment for many months or years.

As far as trying to stop the ex from getting to your estate through the children it appears that in WA you can restrict access but not stop it altogether.

Have a read of these docs:

Enclosed is section 49 refer to 1 (n) for powers relating to maintaining children etc…

Powers of the trustee

and for application of income…

Application of income

It's a good topic to highlight. I'd like to correct some information around the life insurance information you provided. The 2 most common entities that can own a life insurance policy is a superannuation fund or a person. The scenario you outlined is the closer to the circumstance of superannuation ownership.

In regards to payouts (refer Life Insurance Act 1995) an insurer must pay a benefit in the following order;
- policy owner (normally the life that is insured), if deceased;
-the beneficiary, if unavailable;
- the estate.

By either having the intended beneficiary as the policy owner (not possible for children), or the beneficiary (possible for children) you will bypass the estate (and any associated issues). You would also need to ensure that the policy is not brought into probate by an estate solicitor (they will always try to cause they can charge ALOT more). There are other ways to protect life insurance policies and superannuation (which also does not automatically form part of the estate) and it normally doesn't require getting a new policy, which can be problematic if health/circumstances have changed.

The best bet with insurance and general estate planning (asset protection/legacies) is to seek financial advice as there are other areas that need to be checked off to ensure that the right people receive a persons assets quickly and tax effectively on death.

Not to plug, but if anyone needs more specific/personal advice in relation to their estate planning and life insurance policy needs please whisper me and I may be able to assist.

I also need to disclaim that the above information is general in nature. No needs, objectives or financial circumstances have been taken into account. It is not intended as personal advice.
ironzy12 - Yes most of my experience comes from self-managed super or general super funds with attached Life Insurance.

I believe the states differ in these laws so it's probably best for people to get professional advice.

The main concern in this thread is about the ex getting access to the estate through the children.

It's almost like a third settlement! with C$A being the second.

I am also looking at this from a step family perspective which is when it all gets very tricky.
It definately is an issue, one where I have tried to solve. This is getting in the realm of solicitors, but by specifically naming the ex-spouse as excluded from the estate (… 'because provisions have been made during life to the nessecary extent) and naming a trusted family member/friend etc. as the executor could strengthen the ability to prevent an ex-spouse controlling the estate on behalf of the children.

Another and likely stronger method would be the use of a testamentary trust again with a trusted family/member as the trustee.

As long as the control of the funds (executor/trustee) is by someone of trust and that person releases money from the estate in the intended manner to the children (Not nessecary by providing money, rather items) then (and this is where states vary widely) access to/control of the funds by an ex should be limited as the child has been provided for in the will effectively and the ex spouse has no financial dependency. As you mentioned however it does vary alot, some states exclude ex's some include… But the biggest thing is to keep as much out of the estate (and possibly held in a trust structure that survives or establishes on death) as possible… An ex can't take control of an asset that neither the estate nor child holds..
I'm actually working with a wills solicitor at the moment to revise my will so it's all pretty fresh.

There is my wife, biological children from past and current marriages and well as step-children to cater for in our wills.

I am trying to protect my current wife's assets from the ex whilst making sure the children from my ex and my wife are reasonably provided as well as the step children to reduce the chances of a dispute from all ends.

In some cases there is a need to keep assets out of the will and in other situations assets need to be there.

Yes Trusts are a good idea as you can transfer control of assets to persons that survive you.

I guess I can live with the ex getting the income of the children's inheritance for their betterment and yes you can appoint an advisory trustee so the ex has little control.

It would be interesting to see how parents fare in other states.
In my case, I had a will drawn up (by my Family Lawyer who was particularly aware of my issues with the ex because he represented me) that states that my sibling is my executor and also has EPOA (separate things) as it is my 'wish' for my Sibling to raise my child if anything happens to me (for whatever that's worth) because the ex doesn't have much to do with the child.

I also put in a Binding Nomination for my Super and Life Insurance money to become part of the estate which is managed by the Executor.

My main fear is that my ex is an alcoholic drug abuser would try to siphon the substantial money that I've left for the child which was the main driver in me getting a will. This happened with a friend of mine who's parent died and the surviving parent entered into a new relationship and managed to 'con' the child into releasing the inheritance at the age of 18 all of which was spent on booze and gambling. Pretty sad.  
Plus1 - Does your ex have any care of your child? What state are you in and what do the laws say about this situation? Are you sure the ex cannot get access to the inheritance through your child?
Hi Fairgo,

I'm in Victoria. The Consent Orders state Sole Parental Responsibility to me and He sees the child 'as agreed' but he really hasn't requested many visits so he has absolutely no care of the child and in my situation, the child is looked after by my family whilst I'm at work. I'm a Doctor so I tend to work long shifts so the Family pretty much co-raise the child anyway not to mention when I'm on nights and the care increases again.

About the inheritance, I don't know only to say that I would hope that it's as iron-clad as it could get!
So he would have to apply for parental responsibility if he would survive you, as would your sibling. Have you had advice on the likely outcome?
He would have to apply to the Court is my understanding and from what my Lawyer says, the outcome would be really determined by his level of involvement in the child's life which has been nothing. The lawyer thinks that my Family would have an excellent shot at maintaining status quo (obviously without me).

Whether or not he would even do anything is another story. My ex HATES courts because he's been a bit of a frequent flyer (especially in the Magistrates Court) so it would most likely be unlikely that he would go to Court anyway if something were to happen with me. He's near bankrupt because of his addictions and therefore wouldn't be able to afford a lawyer (or qualify for Legal Aid because he does earn a slightly decent salary) and is certainly not motivated enough to Self Rep. I'm sure that Orders by Consent would probably happen again as I don't actually think he ever wanted Parental Responsibility and given that no one is asking him for CS, there's no real motivation for him to see the Child if he doesn't really want to.
That all said, my sibling still remains Executor of my estate and therefor controls my child's inheritance until the age of 21. For this to be overturned, I've been told that he would have to apply to the Supreme Court and it would be a very lengthy and costly process.

Joint Tenants - the three of us are Joint tenants in the family home.

At the present moment, Hubbie,myself and my daughter (his step-daughter) are joint tenants in our House we bought three years ago. Previously our house together was in just Hubbie & my name and his father's name (jointly). We thought about it, and we had a bit of legal advice and decided to go down this pathway. The 'Joint tenants' listed on our titles is a round-about-way he can exclude his children from his former relationship (who he does not see) from our assets together.The houses we have owned have all been ones we have renovated and worked hard to pay off. Both of us had houses when we entered the relationship some 15 yrs ago, but his ex wife has only worked very minimally over the past 30 years and used the funds from her & my husband's first marriage to attain the house her and her disabled hubbie presently reside in. I know from experience, that the parties named as joint tenants automatically receive the deceased parties share of the asset and there is nothing much anyone can do about this to change or prevent this from happening. This is what happened when Hubbie's Dad passed on some several years ago, the title was adjusted to only have Hubbie & myself listed as joint tenants, even though there were other parties ready to dispute this, including CSA, but there was little they could find out or do about it. My hubbie has paid over $100,000 in child support over this period and paid first wife $180,000 from house so he feels he has provided for these children sufficiently in their life-time. On the other hand, I have learnt the importance of a Will when my son passed away tragically last year and I have had to pay a solicitor to obtain a Letter of Administration, which includes my ex hubbie and my daughter, all of us with equal share of the estate. My son died without a will (and we thought penniless) but these days Superannuation often has Life Insurance policies attached, which require the Letter of Administration or a Will before the funds are dispersed. My advice to all is to not leave this to others, have an Executor of your Will, and ensure you estate is in order, just in case this sort of thing happens. The laws regarding Deceased Estates have been written in a very different era, and therefore there is little provision for the second marriages and often the children from these relationships (step children or children). This requires professional advice as each family can have different circumstances and dynamics involving the beneficaries of a person's estate.
Just found out that you can have a Testamentary Trust set up to hold funds for your children for when they become adults however after three years, the ATO will tax it at the maximum rate, so this is why it is probably better to let the children / ex have the income after this time.
This may seem like a really stupid question but does that mean that if you appoint a "Trustee" (in my case, my sibling is named as my executrix and trustee) that this is the same as a Testamentary Trust?
Yes - The Trustee would be holding the funds in a trust. Now that we are talking about the ATO, differences is state laws probably don't matter.

So do you pay the tax or let the ex get the income for the benefit of the children and pay no tax?
Plus1, a testamentry trust is a special vehicle that only initiates on death, similar to a persons 'estate' that is formed on death, but different in a number of ways. If you are referring to a simple will, then in your case 'no'. The term 'trustee' simply means a person (or entity) that has a responsibility over assets on behalf of a beneficiary. A trustee is only liable to the beneficiary/ies. A trustee is mandatory for a will/estate and for a designated trust structure. Having a trustee doesn't mean that you have a specific type of trust (there are several types - discretionary, fixed, hybrid, testamentary, superAnnuation etc.)

In regards to a testamentary trust and tax for kids, if it is set up properly, there are no penalty tax rates, so children will be taxed on normal adult rates (a massive advantage). Normal capital gains would apply on assets when the trust vested, but this is no more than any other capital gains event.
ironzy12 - thanks for your input - So do we still have the issue of deciding if the ex gets the income or the tax man? How do we set up the Testamentary Trust to avoid penalty tax rates?
I believe you can get both. If a trust is set up properly you can obtain concessional rates of tax for children and ensure that assets and income left on death stay out of the hands of the ex spouse. The key element is to nominate a person that is trusted to act as trustee (protector if you like of the income/assets). It can be anyone from family, friends, your solicitor/accountant or even a company in alot of circumstances for those who are self employed. The trustee distributes the income to the child, the income can be distributed in cash or instead of cash directly, distributed as items of need.

The same as a will, solicitors are the people who draft these documents and they are the best people to discuss. The are 'off the shelf' set ups that can be purchased from websites, however if your going to go through the effort of setting one up, better to do it properly to make sure your covered!
Cheers ironzy,

I think in my case its worth the effort.. back to the lawyer I go!
1 guest and 0 members have just viewed this.

Recent Tweets