Marriage and money for same-sex couples
Following Australia's historic yes vote for same-sex marriage, if you're part of a same-sex couple you need to get to grips with some boring but important paperwork
In all the excitement around celebrating a same-sex marriage, probably the last thing on your mind is safeguarding the wealth of you and your partner.
But if you haven't already discussed finances with your partner, it is always a good idea to clear the air. There are a number of legal documents to draw up that will help protect each person's assets - and the dependants - in case of any unforeseen events.
Having a marriage certificate makes it easier for same-sex couples to explain their relationship to a super fund or a lawyer or doctor. Without a certificate, you can spend more time and often more money providing documentation about the de facto relationship, such as how long it had been going.
De facto relationships aren't as clear-cut as you would expect, says Anna Hacker, estate planning specialist at Australian Unity Trustees, even though they have been formally recognised by the Australian government and the Family Court.
For example, each Australian state has slightly different definitions of a de facto relationship, with some providing an option for same-sex couples to register their relationship. This can complicate the laws around the definition of de factos and ultimately the rights people have.
A marriage certificate is more straightforward evidence in legal processes involving any children, says Hacker.
"It will help simplify rights and kids," says Hacker. "If they weren't a biological parent, before same-sex marriage it was quite difficult. Same-sex marriage will make all the difference."
What should be on a same sex couple's to-do list?
When you say "I do", it's time to draw up a new will because your previous will is revoked. That is unless you made the will in contemplation of the marriage.
So it is best to draw up a new will when you get married. If you don't and you pass away, you are considered not to have made a will. This means your assets will be distributed according to the legislation and perhaps not in line with your wishes.
So if you want to leave your estate to your children rather than your new husband or wife, you may not be able to if you don't create a new will after your marriage. The laws around estate planning differ from state to state, making it hard to generalise about them.
Anna Hacker says that when couples were in a de facto relationship, they typically didn't consider drawing up a prenuptial agreement as it tended to be drawn up before the wedding. But given Australia's high divorce rate of 28% of marriages, it makes sense to consider a prenup.
Prenups are a binding financial agreement and they can be drawn up by same-sex couples and de factos too. They can be a straightforward way to split assets and cheaper than going to court. They are fairly watertight as they have been around for 20 years and there is now a large body of legal precedents to provide them with some certainty.
Power of attorney
While you are updating your will, Hacker says it is a good idea to go a step further and upgrade the estate plan, which includes looking at any trust structures such as a family trust, if you have one. The family trust might not have included partners and is only set up for blood relatives.
Perhaps the most important documents are a power of attorney and enduring guardianship. While power of attorney is about appointing someone to have the legal authority to look after your financial affairs on your behalf, an enduring guardian is appointing someone to make lifestyle, health and medical decisions for you when you are not capable of doing this for yourself.
These are vital for unforeseen events such as an accident or medical emergency.
Issues likely to arise
The developments in Australia raise some interesting questions about the recognition of same-sex marriages that take place overseas and the legal rights of the partners. "They will now be recognised but when are they valid from?" asks Australian Unity Trustees' Anna Hacker.
The Marriage Act recognises existing and future same-sex marriages carried out overseas under the law of a foreign country from December 9, 2017 but Hacker expects this to be challenged.
She says there will be some legal claims arising from divorces or deaths from the partners of overseas same-sex marriages. For example, if the same-sex couple who married overseas have separated and the marriage is recognised in Australia, then there could be some retrospective claims on property.
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