It is very overwhelming going through separation and divorce as you grapple with your relationship loss, reduced parenting time, negotiating financial settlement, and moving house. You may struggle to stay on top of your game at work due to being consumed with the chaos at home. Then there is the emotional rollercoaster, fearful of the uncertainty of your future, feeling like your life has turned upside down.
Through dealing with all of the chaos there is something you may forget! Your ex is listed as your beneficiary!
It is so important to change your beneficiary from your ex to someone else you trust to receive funds in the event of your death. This could be to your kids, your parents, a sibling or whoever you decide.
So where could your beneficiary be listed?
If you have a will in place, you may have your ex listed as the beneficiary to your estate in the event of your death. You need to ensure that you have it changed to reflect your new beneficiary to ensure whatever remaining assets you have left after financial settlement are not dispersed to your ex, creating a legal battle for your children to receive their inheritance from you.
Your superannuation, self-managed super fund or pension fund may have your ex listed as your beneficiary. Superannuation is considered part of your financial assets in the property pool during financial settlement in separation or divorce. This may be the second largest asset you have besides your family home. You may decide to sign over some of your superannuation funds as part of your financial settlement to your ex’s superannuation fund as part of your financial settlement. The funds still cannot be withdrawn as cash until retirement. If you are close to retirement, you may decide to retain all of your super and allocate more property or cash funds to your ex as part of the financial settlement. The family law act states that if you have been in a relationship either married or de-facto for at least two years then you may be entitled to a superannuation split. It is important to remember once financial settlement is completed that you should change the name of your beneficiary so that the remainder of your super and its continued growth does not get paid out to your ex.
If you own shares, these are also included in your financial property pool and included in the negotiation of financial split. You may decide to keep the shares or sell them to split the proceeds in your financial settlement. It is important to check who is listed as your beneficiary on your shares so that you can change it if you retain them after financial settlement.
Insurance policies such as life insurance, car insurance or funeral plan insurance are not considered part of your property pool but they may list your ex as a beneficiary. Ensure the policies are updated to reflect a new beneficiary otherwise your family may not receive these funds to bury you putting a financial burden on your children.
If you have a Family trust in place which your ex is listed as a trustee or beneficiary, you need to seek legal advice on how to manage the changes required for the separation and ongoing beneficiaries.
There may be other policies you have in place which sit in a drawer and forgotten which have your ex listed as a beneficiary. It is prudent to go through all your paperwork to identify any assets, policies, wills or insurances to not only prepare for financial settlement but also update beneficiaries.
Emergency contact or next of kin listed as your ex should also be identified and updated as they could be key decision makers beyond separation on your health treatment if you are incapacitated.
If you don’t have a will in place, it is really important to get one done to reflect your wishes for your assets and sentimental heirlooms. Reach out to a lawyer such as Shallice Cockram at Holistic Law who can arrange a will for you to put your mind at ease.
Author – Cheryl Duffy, Divorce Coach, Family Dispute Resolution Mediator & Parenting Coordinator