Tuesday, June 25, 2013

Divorce and 'jointly' owned assets

Image credit: Stefano Corso
In a recent post, the impact of separation following a relationship breakdown on estate planning arrangements was considered. 

One particular aspect that arose recently in this regard involved an adviser who identified that many assets owned by a couple who had recently separated were owned as joint tenants. 

While the adviser was quick to ensure updated will and power of attorney documentation was put in place, at the same time, for the benefit of both spouses, steps were also taken to sever the joint tenancy ownership and convert it to tenants in common. 

An earlier post summarises the distinction in this regard, and it is critical that joint ownership structures be considered as part of an estate planning review following a relationship breakdown. 

The other aspect in this regard is the often forgotten requirement that before a married couple can in fact divorce, there must be evidence of an irretrievable breakdown in the relationship that has lasted more than 12 months. 

As touched on in last week's post, while divorce will often partially revoke a will to the extent that it benefits a former spouse, given the 12-month 'waiting period', the conservative approach is to always update estate planning documentation as soon as it is clear that there is no real prospect of a reconciliation following the initial separation. 

Until next week.