It had been eight long months since Sally separated from Luke, and things were looking up. She and Luke had amicably split, agreed on the division of relationship property, and settled child support issues. These were a weight off her shoulders, but single life had its challenges.
She noticed that she did not see the benefit of bulk grocery purchases or split utilities bills. Sure, child support helped, but things were still tough. She had heard of the “singles tax” but seeing it in action was another thing altogether.
At the recommendation of her colleague, Lucinda, Sally decided to get back into the dating scene. Luke fully supported her in this and even agreed to take the kids during his week so that she could meet with the rather dashing Emilio.
Emilio had a similar background. He was freshly divorced and had four children who split their time between their mother in Spain, and with Emilio in New Zealand.
The relationship was going well. So well in fact that Sally decided to approach Emilio about moving in together.
“Mi amor”, Emilio began. “I love the idea of moving in with you. I agree that we are ready for that step. However, I want to broach an issue with you. A rather uncomfortable issue”.
“What is it, Emilio?” Sally asked.
“You see, I have four children of my own. My Estate is more modest since the divorce, but I still have considerable assets. I want to protect my children’s future, and in order to do that, I must protect my assets from any potential claims made by you or your children” Emilio explained.
“Oh, I see” Sally said. “I don’t think that’s a bad idea. I too want to protect what I have. I wouldn’t want to split our collective property five ways between my one child and your four children – that doesn’t seem fair”.
The couple agreed that they would go and talk to a lawyer about their estate planning.
Their respective lawyers explained that with blended families, there could be overlapping claims under the Family Protection Act. If Emilio and Sally each continued into a de facto relationship, then the presumption of equal sharing would likely apply. At the same time, Emilio and Sally each had a moral responsibility to provide for their children.
Emilio and Sally decided to enter into a contracting out agreement, to protect their respective assets. They then agreed to sign their own Wills, which reflected the provision in the contracting out agreement that neither of them would make a claim against the other’s estate.
Emilio and Sally could relax into their life together, knowing that they had a succession plan that was tailored to their individual needs, so that they didn’t have to worry about any headaches down the road.
