No matter what your view is on the marriage equality debate, understanding the rights of a married couple compared to a de facto (including same sex) couple is critical to enable a meaningful discussion with clients who are entering or exiting relationships about their plans on death and incapacity.

 

The difference between proving a marriage and a de facto relationship

At the very core, marriage is based on a couple’s mutual promise to one another and need only be proved by the production of one document (a marriage certificate) at most. It is immediate and undeniable.

A de facto relationship must be proved by evidence relating to living arrangements, sexual relationship, finances, ownership of property, etc. It often requires one or both partners to spend significant amounts of time, money and unnecessary stress to produce the necessary evidence.

Although most states allow de facto couples to register their domestic relationship a prescribed set of criteria must be met to allow the registration.

Interestingly, couples do not need to prove any of the above criteria to enter into a marriage and, in fact, may choose to not share any during their relationship.

 

Differences for estate planning

Although estate planning laws differ in each jurisdiction, marriage usually revokes a Will whereas entering into a new de facto relationship does not. So if, for example, a person made a Will, then entered into in a de facto relationship and then died, the Will would remain valid. The de facto partner would have a right to make a claim against the estate, if the Will did not make sufficient provision for them.

Similarly, divorce (but not separation) will usually revoke any gift made in a Will to the ex-spouse whereas ending a de facto relationship will not revoke gifts made to the former partner.

Married and de facto spouses have an entitlement to a portion of a deceased’s estate if the deceased dies without a Will however a de facto partner must prove their relationship before becoming entitled. This can be a challenge for the de facto, especially where the relationship was not a long continuous one or where the parties did not live together at all times.

The laws relating to powers of attorneys differ from those applying to Wills in several critical ways. For example, if a person nominates their spouse (whether de factor or married) as medical and financial attorney, and the relationship subsequently breaks down, the appointment still stands. For this reason, if you have a client whose relationship ends, it is important to prompt them to immediately review their powers of attorney as well as their Will.

 

If you would like assistance in helping clients entering or exiting relationships prepare or update their estate planning documents please contact Bernie O’Sullivan or Thalia Dardamanis on 1300 267 529.