One of the most critical aspects to consider where a party dies prior to the settlement of property settlement proceedings is the implications of that death on jointly held assets.
This may include:
a) property held as joint tenants;
b) superannuation proceeds where binding nominations are in place.
Property held as joint tenants
Pursuant to the doctrine of survivorship, where property is held as joint tenants and one of the joint tenants die, their interest in the property passes to the surviving joint tenant. This applies irrespective of any other intention to the contrary contained in a deceased’s will. The only way for the doctrine of survivorship to be avoided is for the joint tenancy to be severed prior to a person’s death and for ownership of the property to be altered to a tenancy in common.
Accordingly, this is an important issue to consider where you may be acting for clients involved in property proceedings where jointly held property is owned.
If a deceased party has made a valid binding nomination in favour of their spouse then it may be the case that the death benefit proceeds are payable to the spouse pursuant to the nomination irrespective of the current status of the relationship.
Careful consideration needs to be given to reviewing any binding nomination (and if necessary, updating it) upon the cessation of a relationship to minimise the risk of unintended consequences occurring. In addition, where it is the case that the superannuation assets are held in a self-managed superannuation fund a full review should be undertaken of the deed. Such a review should determine the party (pursuant to the terms of the deed) who has the power to determine how, and to whom the benefits are paid as the involvement of a party to Family Law proceedings may have a bearing on the payment of the funds on death.