Legalisation of same sex marriage could create implications for LGBTI couples with an existing will or estate plan

We have previously highlighted some of the complications surrounding the legal status of LGBTI couples and legislation that may have serious consequences for them when it comes to Wills, estates and family law.  With the overwhelming response and support for the legalisation of same sex marriage, it appears certain that LGBTI couples will soon be able to marry and enjoy the same legal status as traditional married couples. 

Whilst governments have already taken steps to close the legal gap between married and de-facto couples (whether same sex or otherwise), legalising same sex marriage will have significant flow-on effects for LGBTI married persons. Some of these include:

  1.  Centrelink rules;
  2.  superannuation law;
  3.  family law;
  4.  tax law;
  5.  inheritance law; and
  6.  wills and estates law.

Some of the laws that will be effected are Commonwealth laws and some are State law. No doubt it will take some time for the true consequences of the change to become apparent and it may be that legislation will need to be amended or changed to ‘catch up’ with the change or to resolve unintended consequences. 

As things stand currently, the South Australian Wills Act has two important provisions when it comes to marriages which will apply to LGBTI couples if they marry.  They are:

  •  when a person marries, their previous Will is revoked, unless the previous Will is expressed to be made in contemplation of that marriage;
  •  when a person divorces, references to their spouse in their Will are to be disregarded, except in certain circumstances

Unless the Will has been drafted in the very recent past, only the most optimistic LGBTI person is likely to have included a provision in their Will contemplating them getting married in Australia.  What does that all mean?  It means that many Wills made by LGBTI persons will become invalid when they marry.  As a result of this, their assets may not end up where they intended them to, which could have significant consequences. 

It is also worth noting what happens when a married person dies without a valid Will (called ‘intestacy’).  These rules will apply if a LGBTI person marries and their current Will becomes invalid.  Whist the rules surrounding intestacy itself will not change because of same sex marriage, being married will remove the need for LGBTI persons to prove they were in a legally defined de-facto relationship, which is the current situation.  Under the Administration and Probate Act if a person dies without a valid Will the person’s estate is divided as follows:

  1.  if the person is married or has a de-facto partner and they have no children, the spouse will inherit all of the assets;
  2.  if the person is married or has a de-facto partner and they have a child or children:
    (a)       the spouse will receive the first $100,000 and half of the remaining assets after that is deducted;
    (b)       the child or children will share the remaining 50% after the $100,000 is deducted;
    (c)       if there is no spouse but there is a child or children, that child or those children will inherit all the assets.

If a person dies with no spouse or children, the assets are divided between grandchildren, parents, siblings (and potentially their children), grandparents and aunties and uncles (and potentially their children) in that priority order, depending on who is alive at the time.  If there are no person who is alive, the assets are transferred to the Government.

At first glance, an intestate distribution may be close to what a person would want to happen anyway. However, an intestate estate is usually more complicated (and therefore more expensive) to administer, and depending on the financial position of the couple, it can cause financial hardship for the surviving spouse.  The Public Trustee is required to hold the childrens’ share of the assets on trust for them until they reach 18.

Most of the changes for LGBTI persons that will flow from being able to be married will be overwhelming positive in terms of equality and fairness.  However, LGBTI persons (and anyone else who has not updated their Will following marriage) should review and if necessary, update their Wills to avoid the potential issues created by intestacy. 

This article was written by Partner, Joe Anderson

Practice Area: Wills & Estates

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