When you enter into a contracting out agreement, it is just as important to review and update your will at the same time to ensure everything works together as intended.
A contracting out agreement records what property is considered relationship property and what each partner owns separately. It can also set out how property is to be divided if the relationship ends. What many people do not realise is that this agreement can still have an effect after death. This means your will needs to be consistent with the terms of your contracting out agreement. These documents need to work together, not against each other.
When updating your will, you should think carefully about what provision, if any, you wish to make for your spouse or partner, as well as for any other family members or beneficiaries. This is particularly important where significant assets, such as the family home, are involved.
Depending on how property is owned, one option to consider is granting your spouse or partner a “life interest” in your will. This allows your spouse or partner to continue living in or using the property for their lifetime, while preserving your share of that property for the beneficiaries you have chosen.
If a life interest is not included where it may be appropriate, your partner could be placed in a difficult position. For example, they may need to refinance the property or sell it in order to meet the terms of your estate, which may not reflect your wishes.
It is also a good opportunity to review practical matters, such as who you appoint as executor and whether your chosen person is still appropriate given your current relationship and instructions in terms of the distribution of your estate in your Wil.
