Property Relationships Act
The Property Relationships Act is the most significant piece of legislation affecting inheritance and estate planning issues that has been passed for many years.The act is in effect a rewrite of the 1976 Matrimonial Property Act and has wide ranging effects many do not appreciate.
To put in place an effective estate plan that will look after the interests of your family you need to understand the basics of this legislation and before proceeding any further we suggest you read the pdf from the Justice Department explaining the Property Relationships Act.
As an example changes to the act have significantly altered the rules that apply when one of a couple die. The act states that the surviving spouse or partner has 6 months from the date of death to decide if they will take what is left to them under the will or 50% of the relationship property.
Another area that has changed is the definition of a de facto relationship. A de facto relationship in terms of the act is now defined as one between two persons whether
- a man and a woman or
- a man and a man or
- a woman and a woman
who are both aged 18 years or older, who live together as a couple, and who are not married to each other.
There are 8 tests the courts will apply in determining if a relationship exists and these are
- the duration of the relationship;
- the extent to which the couple share a home;
- whether theirs is a sexual relationship;
- their financial and property arrangements;
- their mutual committment to a shared life;
- the care and support of children;
- who does the housework and other household duties;
- the reputation and public aspects of the relationship, e.g. are the partners known to family, friends, colleagues and in the community as a "couple"?
The presence or absence of some of these factors does not necessarily mean that a relationship exists. The act states that the court is entitled to have regard to such matters and to attach weight to any matter, as may seem appropriate to the court in the circumstances of the case.
You need to read and understand the provisions of the act and have therefore repeated the link to the Justice Department web site.
Once you have done this and read the section on Inheritance Trusts you will have a good understanding of the issues that need to be addressed.