Can a separated spouse still inherit your estate?

Many people assume once married parties separate (before obtaining a legal divorce) the estranged spouse will not benefit from your estate in the event of death.

However, this is not automatically the case.

Under Victorian law, separation alone does very little to alter your inheritance entitlements, and without prompt action, the consequences can be significant and emotionally devastating for loved ones.

1. What if my will nominates my estranged spouse as an executor and/or beneficiary, and we are separated but not yet legally divorced?

Any existing will remains fully operative.

Separation has no effect on any appointments or dispositions contained in it.

This means the estranged spouse will remain entitled to receive their share of your estate exactly as your will provides.

Equally, if your ex-spouse is appointed as executor - which is often common between married couples - they will retain full authority to administer the estate, manage personal affairs and interact with other family members and beneficiaries after death.

In circumstances where the separation is acrimonious, this can be deeply distressing for loved ones.

2. What if I am separated and die without a will?

If you die without a will , the estate will be dealt with in accordance with intestacy provisions of the Administration and Probate Act 1958 (Vic), or other state equivalent.

In Victoria, a separated spouse remains a 'spouse' for the purposes of intestacy laws and will benefit directly from the estate as a priority, alongside any children that may exist.

3. What about jointly held property?

Assets held as "joint tenants" will be excluded from whatever is included in the will and bypasses intestacy laws and will automatically pass to the surviving owner upon death, regardless of what your will says (or even without a Will).

A will cannot override this.

The only way to prevent this is to take steps to legally sever the joint tenancy prior to death, so that it is converted to being held as "tenants in common".

This conversion means each owner's share is dealt with separately and forms part of that person's estate, and dealt with under a will (or intestacy laws if there is no will ).

4. What if I am already engaged in a family law matter?

If you are engaged in property settlement litigation in the Federal Circuit and Family Court of Australia (the court) at the time of passing, the executor may continue the litigation on behalf of the estate.

However, if the will has not been updated since separation and appoints the estranged spouse (and opposing party) as executor, they will have the power to manage or even discontinue litigation on behalf of the estate.

If property settlement proceedings have not yet been filed in the court at the time of passing, the executor is not able to issue proceedings on behalf of the estate, and any claim by potential beneficiaries will need to be made pursuant to family provision legislation.

This can mean that any claim to marital assets held in the estranged spouse's name will be lost.

5. What if I obtain a divorce?

Under the Wills Act 1997 (Vic), a divorce automatically revokes any appointments or dispositions in your will that benefit the former spouse.

However, the remainder of the will continues to operate.

This can create issues for example, where an ex-spouse is the sole named beneficiary or executor potentially resulting in a partial intestacy or an estate with no named executor.

It is therefore important to update your estate planning documents promptly to nominate alternate beneficiaries and/or executors in your ex-spouse's place.

6. Can my estranged spouse challenge my will?

Yes. Even if a will is updated to exclude an estranged spouse, they may still have a claim against the estate.

Under Part IV of the Administration and Probate Act 1958 (Vic), a spouse, including a separated spouse, is an "eligible person" who may apply to the Court for further provision from your estate if they believe they have not been adequately provided for.

The Court will consider a range of factors, including the nature of your relationship, the size of your estate, and their financial needs.

Until a divorce is finalised (in some cases, even after) the risk of a challenge remains available.

In summary, separation alone does not protect your estate.

If you have recently separated, or are contemplating separation, it is important to obtain prompt legal advice to review your will , powers of attorney, superannuation nominations, and any jointly held assets.

Proactive estate planning at this stage can safeguard assets and ensure they pass to those intended to be provided for.

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