6 Ways to protect yourself and your Kids financially when you re-partner.
So we are well passed the age of believing in happily ever afters, and know that romance is not all dreamy glances and sweaty palms. Who said that adulting would be all fun and games right!
So, what can you do to protect yourself and your children when you start a new relationship?
Discuss your expectations relating to finances with your new partner
Maybe not on your first date, but pretty early on in a new relationship, it is important to express your values relating to money. Differing values and expectations around money are one of the most common reasons for relationship disputes and break downs.
Is this really the right person for you if you can’t agree on money issues? It’s better to really think about this before you become too invested in the relationship.
Discuss getting a Binding Financial Agreement right from the start
As a lawyer I’ve handled a lot of divorces. They are hard for everyone, and they can get very nasty. You would be forgiven for thinking that your paramour wouldn’t behave badly if you broke up, but everyone thinks that when they are in love, many are wrong. In fact there’s a whole divorce industry to prove just how wrong people can be.
So hope for the best, but prepare for the worst, by discussing early on in the relationship, before your would even be considered as a de facto, that if the relationship were to continue, you would expect that you and your partner would sign a Binding Financial Agreement to protect your assets for you and your kids, and that he would likewise do the same.
If you cannot successfully navigate this conversation, just how bad do you think things would get if you broke up? It’s a conversation that separates the men form the boys!
Actually sign a Binding Financial Agreement.
There is no clear formula for determining when you are in a de facto relationship, which would give you and your partner a right to claim on the assets of the other. When things start to get serious you should discuss this with your lawyer. You can make an appointment here if you would like to discuss it with us.
If you move in together, that is a clear indication that you might be in a de facto relationship, likewise if your relationship has lasted longer than 2 years. If your family and friends would consider you a partnership, or if you are both behaving in a manner that promotes your joint wellbeing, then it is time to actually get that Binding Financial Agreement you’ve been talking about. Get one even if he says that you don’t need one because he would never take any of your money. Trust me, you still need one as many claims are made out of spite, hurt or jealousy and not by a genuine need or belief that an ex-partner has contributed to the growth of your assets.
You will save yourself and your family a lot of stress and money in the long run by taking this precaution. Rather know up front if he is in it for the money.
Choose the right executor in your Will
Look, I get it, nobody wants to think of their own death, and we would all rather put off getting a Will to avoid thinking about it. Then something happens, and the thought of leaving your family unprotected fills you with anxiety.
Getting a Will does not alter your chances of dying, but it does show your family that you thought of them enough to protect their future and ease the burden of your own passing on them by just a bit. More importantly their memory of you will be a more positive one – you took care of everything!
Your executor has a lot of power on how your assets are managed after you pass. You must choose the right person. You must choose someone who will make sure that your kids are looked after in every way.
And if you don’t already have a Will now is the time to get one. They are really easy and affordable. Why not check out our online Will, which is a great way to get this done. If you don’t have a will the father of your kids, your current partner, or ex-partner (if recently broken up) could all apply to be your executor. So, make a choice of who you want, and who will look after your kids’ best interests.
Appoint someone trustworthy as your Power of Attorney
If you become incapacitated, say due to an accident or illness, who will look after your finances and make medical decisions for you in keeping with your values and wishes. If you do not appoint someone the courts will. They could appoint anyone they choose, often a government agency or maybe a family member who you would not choose for yourself.
Our Complete Estate Planning Solution includes the Powers of Attorney you need. Or you can arrange them separately, they are very cheap and easy to arrange. Remember if an agency is appointed, they will charge you a lot of money to manage your money. So, choose the person you want, don’t leave it to chance, they can make any decision for you that you can currently make for yourself.
Register a Binding Death Benefit Nomination with your Super
This will ensure that the money in your Super is paid to your children, who will need it more, otherwise your new partner may get all the funds.
You should also review your Nomination from time to time, as your children’s respective needs will change as they get older.
And finally you should also review it from time to time, as some super funds have lapsing death benefit nomination that need to be reviewed periodically, so check what yours says. And also check with your accountant as to the most tax efficient way to make the nomination.
Disclaimer:
The aforesaid is not legal advice and is only general in nature. Please obtain advice specific to your own circumstances, alternatively get in touch with the writer at http://hazelegal.com.au Please note that we do not endorse any of the services mentioned in this article, they merely serve as an example.