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Are you concerned about leaving your assets to your children as they may divorce?

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Many grandparents are reconsidering leaving their assets to their adult children in their Wills, due to concerns about their children divorcing. With marriages typically ending in divorce in approximately one out of two cases, grandparents are instead leaving their assets to their grandchildren.

In a family law dispute, inheritance can be considered as part of the ‘pool’. A Court will look at – amongst other things – when an inheritance was received, how it was applied, and what contributions were made towards it.

If parents leave their assets to their children in a trust, this property can also be considered part of a marital ‘pool’, even if the child is not listed as a trustee or beneficiary.

The best way to ensure that inheritances left to children remain theirs is by the child who is in a de facto relationship or marriage signing a financial agreement. Such an agreement can provide that inheritances left to that child remain their own, even in the event of a de facto relationship or marital relationship breakdown.

Since financial agreements are now binding, there has been an increase in couples wanting to sign financial agreements in recent years. Financial agreements can be entered into before, during and after de facto relationships and marriages. They are best done whilst the relationship is new and couples are more likely to be able to agree on arrangements for the future, rather than on a relationship breakdown when there might be considerable acrimony.

Financial agreements not only protect individuals who come to a relationship with wealth, but also benefit the average couple by setting out what will happen with their finances upon the break down of a relationship. Such agreements avoid considerable legal costs and further emotional distress.

Author: Elisa Garzarella

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