BFAs, wills and estate planning

The basic divide — separation vs death

The two regimes overlap but don't cancel each other out. A BFA doesn't replace a will. A will doesn't replace a BFA. Both are needed and they should be reviewed together.

Does marriage revoke a will?

Yes. Under Australian succession law, marriage automatically revokes any prior will — unless the will was specifically made in contemplation of that marriage.

This means:

• If you marry and don't make a new will, the previous will is gone
• You're treated as having died intestate (without a valid will)
• The intestacy rules of your state apply, which may not reflect your wishes

If you're getting married, make a new will — either after the wedding or in anticipation of it. If you're putting a pre-marriage BFA in place, the will should be updated as part of the same process, drafted to come into effect at marriage.

Does separation or divorce revoke a will?

Separation alone does not revoke a will. Your existing will continues to operate even after you've separated.

Divorce has different effects in different states:

• In most states, divorce revokes any gift in the will to the former spouse, and revokes the appointment of the former spouse as executor — but leaves the rest of the will intact
• In some states, the effect is more comprehensive
• Same-sex marriages and de facto relationships have different treatment in different jurisdictions

Either way, separation is the moment to review and update your will. Without an update, you may have testamentary documents that no longer reflect what you actually want — particularly if your former partner is named as a beneficiary, executor, or guardian of children.

This applies to de facto separations as well. Marriage and divorce have specific statutory effects on wills; ending a de facto relationship doesn't have the same automatic effect. So the imperative to update is even stronger for de facto separators — without active action, an existing will continues exactly as drafted.

Does a BFA replace the need for a will?

No. A BFA deals with what happens on separation. A will deals with what happens on death. The two events are different and the legal frameworks are different.

If a party dies without separation having occurred, the BFA does not come into effect — the will governs the distribution of the estate. This is critical to understand: a BFA is dormant until separation. If death happens first, the BFA never activates.

If a party dies after separation has occurred but before the BFA has been fully implemented, the BFA remains binding on the deceased party's estate. The executor carries out the BFA's terms.

The implication: even with a comprehensive BFA in place, you still need a current will. The two documents work together — the BFA handles the separation scenario; the will handles the death scenario.

Joint tenants vs tenants in common — the structural choice

This is the most consequential structural decision in family-law-meets-estate-planning. The way property is held — joint tenants or tenants in common — drives what happens both on separation and on death.

Joint tenants

• Each owner holds the property together with a right of survivorship
• On death of one owner, the property passes automatically to the surviving owner — regardless of what the deceased's will says
• The deceased's share cannot be left by will

Tenants in common

• Each owner holds a defined percentage (50/50, 60/40, or any split)
• On death, each owner's share forms part of their estate and passes under their will
• Each owner can leave their share to whoever they choose

Why this matters when a BFA is in place

If you've quarantined a property in a BFA as one party's separate property but you hold it as joint tenants, the right of survivorship can override the BFA's intentions if one party dies. The surviving party gets the whole property automatically, even if the BFA said only one party owns it.

For property purchased during a relationship where a BFA is in place, tenants in common is generally the safer structure. It gives each party control over what happens to their share on death.

When this particularly matters — blended families

In a blended family — where one or both parties have children from prior relationships — the choice is especially important:

• Joint tenancy with a new partner means the property passes to the new partner on death, and the deceased's children from a prior relationship get nothing from that asset
• Tenants in common with a defined share lets the deceased leave their share to their own children

If preserving inheritance for children from a prior relationship matters, tenants in common is usually essential.

Converting from joint tenants to tenants in common

If you already hold property as joint tenants and want to convert to tenants in common, the joint tenancy can be severed. This is a conveyancing step — your conveyancer or solicitor lodges the relevant documents to change the holding structure. The percentage shares are typically set at the same split (50/50) unless something different is documented.

Severance is straightforward and doesn't generally trigger stamp duty (since no party is acquiring new ownership), but the rules vary by state. Check with a conveyancer.

Superannuation and death — separate from the will

Superannuation is not generally an estate asset. It's held in trust by the super fund and distributed in accordance with the trust deed, not the will (unless the will specifically directs super to flow into the estate, which requires a binding death benefit nomination to the estate).

Binding death benefit nominations (BDBNs)

A binding death benefit nomination is a written direction to a super fund trustee about who should receive the superannuation balance on death.

• A binding nomination is binding on the trustee — the fund must distribute as nominated
• A non-binding nomination is only advisory — the trustee can consider it but has discretion
• Without a BDBN, the trustee has discretion about who receives the super

BDBNs commonly lapse every three years and must be renewed. Some funds offer non-lapsing BDBNs. Check your fund.

Who can be nominated

You can nominate a super dependant (spouse — including a de facto partner — a child, a financial dependant, or someone in an interdependency relationship), or the estate itself (in which case the super flows into the estate and is then distributed under the will).

Why this matters at separation

If your former partner is named as the BDBN beneficiary of your super, the trustee will pay the super to them on your death — even if your relationship has ended and your will says otherwise. Updating the BDBN is one of the first things to do post-separation.

For separated parties who have not yet finalised a divorce or formal property settlement, the BDBN can be updated unilaterally. There's no requirement for the other party's consent.

Family provision claims — the limit on what a will (or a BFA) can do

Under state-based family provision legislation (known as the Succession Act, Family Provision Act, or equivalent in different states), certain people can apply to the court for a greater share of an estate if they were not adequately provided for in the will.

Who can make a claim?

Eligibility varies by state but generally includes:

• Spouses (current and, in some states, former)
• De facto partners
• Children, including adult children
• In some states, other dependants (stepchildren, grandchildren in some circumstances)

What the court considers

The court looks at:

• The nature of the relationship between the deceased and the claimant
• The claimant's financial circumstances and need
• What provision was already made
• The size and nature of the estate
• The competing claims of other beneficiaries
• The deceased's reasons (if known) for the provision (or lack of provision) they made

Why a BFA doesn't bar a family provision claim

Family provision legislation cannot be contracted out of. Even if a BFA purports to waive all claims, a court can still entertain a family provision application by an eligible person.

The BFA may be evidence the court considers — particularly if the BFA already provided the applicant with a financial settlement, which can reduce the court's inclination to award additional provision. But the BFA doesn't bar the claim itself.

In Western Australia in particular, a contractual exclusion clause attempting to fully exclude family provision claims cannot achieve full exclusion. Other states have similar limitations.

If excluding family provision risk matters, the work belongs in estate planning specialist advice — not in the BFA. Structures like:

• Testamentary trusts with appropriate distribution discretions
• Inter vivos trusts holding assets outside the estate
• Lifetime gifts (with their own complications)
• Specific provision in the will that pre-empts likely claims

are the kinds of strategies an estate-planning specialist works through.

Inheritance tax — does Australia have one?

No. There is no inheritance tax or death duties in Australia. Beneficiaries do not pay tax simply on receiving an inheritance.

But:

• Assets inherited may have embedded CGT when eventually sold — the cost base inherits from the deceased's position (or sometimes is reset to market value at death, for certain assets)
• Superannuation paid to non-dependants is taxed at higher rates than super paid to dependants
• Income received from inherited assets is taxable in the normal way

So while there's no death tax per se, the tax position around inherited assets can be complex. Specialist tax or estate-planning advice is often worthwhile when the estate is significant.

Testamentary trusts

A testamentary trust is a trust created by a will that comes into effect on the death of the will-maker. Assets are held and managed by the trustee for the benefit of the named beneficiaries over time, rather than being distributed immediately.

When testamentary trusts are useful

• Beneficiaries who are minors — assets can be held in trust until the child reaches a specified age (commonly 18 or 21)
• Beneficiaries who can't manage their own affairs — a vulnerable adult beneficiary (disability, mental illness, addiction) can be provided for through a protective trust (sometimes called a discretionary testamentary trust for a vulnerable beneficiary)
• Asset protection — for beneficiaries in business or with creditor exposure, holding assets in a testamentary trust can provide some insulation
• Income splitting — testamentary trusts have certain tax advantages, particularly for minor beneficiaries (who are taxed at adult rates on income from a testamentary trust, rather than the punitive minor rates)

Protective trusts for vulnerable beneficiaries

For a beneficiary who can't manage their own affairs, a protective testamentary trust:

• Holds the inheritance for their benefit
• Is managed by a nominated trustee
• Gives the trustee wide discretion to apply income and capital for the beneficiary's needs
• Protects the inheritance from mismanagement, exploitation, or means-testing for government benefits

The will should specify a hierarchy of trustees — primary trustee, then successor trustees if the primary can't or won't act — so there's always someone to manage the trust without a court or tribunal application.

The Public Trustee should generally be a last resort, named only if all private trustees are unable to act. The Public Trustee charges fees and is less attuned to the beneficiary's personal needs than a private trustee who knows them.

Guardianship and administration — for adults without capacity

A distinct area from estate planning, but it often comes up in the same conversation.

Guardian vs administrator

• A guardian makes personal, lifestyle, and medical decisions for an adult who lacks capacity to make those decisions themselves (where to live, what medical treatment to receive)
• An administrator manages the person's financial affairs and property

The roles can be held by the same person or different people. They can be formal appointments by a tribunal (such as the State Administrative Tribunal in WA, equivalent in other states) or informal arrangements based on enduring powers.

Enduring powers — the proactive option

If a person still has capacity, they can grant:

• An enduring power of attorney — authorising someone to manage their financial affairs, with the power continuing or commencing if they lose capacity
• An enduring power of guardianship (or equivalent — names vary by state) — authorising someone to make personal and lifestyle decisions if they lose capacity

These documents are made while you have capacity and come into effect if and when you lose it. They avoid the need for a formal tribunal application later.

What happens without enduring powers

If capacity is already absent and no enduring documents exist, a formal application to the SAT (in WA) or equivalent tribunal in other states is generally required to authorise someone to manage the person's affairs.

For ongoing administrator appointments, there are often reporting obligations to the appointing tribunal — annual accounts, periodic reviews. The specific requirements depend on the terms of the appointment.

Why this matters for BFA work

If either party has any indication of declining capacity, a BFA presents additional challenges:

• The advising lawyer must be satisfied the party has capacity to enter the agreement
• Capacity concerns can be grounds for setting the BFA aside on unconscionable-conduct grounds
• The relevant power-of-attorney or guardianship arrangements may interact with the BFA

This is a Complex BFA situation. Flag it at intake.

Coordinating a BFA with estate planning — the practical checklist

When you're entering a BFA — particularly a pre-marriage, during-marriage, or pre-cohabitation BFA — the estate-planning side should be reviewed in parallel. The checklist:

1. Update the will. Make sure it reflects current circumstances. If marriage is imminent, draft the new will in contemplation of marriage (so it survives the wedding).
2. Review the BDBN on each super fund. Make sure it points to the right beneficiary or to the estate.
3. Review property holding structures. If property is held as joint tenants but the BFA quarantines it as separate property, consider severing the joint tenancy and converting to tenants in common.
4. Review beneficiary nominations on life insurance, salary continuance, employer-provided death benefits.
5. Review enduring powers of attorney and guardianship. Update appointees if a former partner is named.
6. Consider testamentary trusts if there are minor children, vulnerable beneficiaries, or asset-protection needs.
7. Consider how the BFA terms align with the will. If the BFA quarantines an asset to one party, the will should reflect that the asset goes wherever that party wishes — not be silent or contradict.

When the BFA and will should be done together

For complex matters — blended families, significant assets, family-business interests, vulnerable beneficiaries — running the BFA and the estate planning as a single coordinated piece of work is often the right approach. The drafting decisions in one document interact with the other.

Lawcaptain can run the BFA component. For coordinated wills and estate planning, we can refer to specialist colleagues at MKI Legal or to other estate-planning firms. The work integrates.

Common scenarios

"I'm getting married. Do I need a new will?"

Yes — marriage automatically revokes your prior will (unless that will was specifically made in contemplation of the marriage). Without a new will, you'll die intestate.

If you're also doing a pre-marriage BFA, the right timing is to put both in place around the same time, with the will drafted in contemplation of the marriage so it survives the wedding day.

"We've separated but I haven't updated my will. What's the risk?"

Your existing will is still operative until you change it (or until you divorce, which has the partial effect of revoking gifts to the former spouse). If your former partner is named as beneficiary, executor, or guardian, the will still says that — even if your relationship has ended.

Update the will. This is one of the first things to do after separation.

"We're a blended family. How should we hold the family home?"

For most blended families, tenants in common is the right answer for the family home (and any property where you want each party's share to go under their will). Joint tenancy means the surviving partner gets the whole property on death — leaving the deceased's children with nothing from that asset.

If you're already joint tenants, severing the tenancy is straightforward.

"I'm putting my elderly mother in a protective trust in my will. Who should be the trustee?"

A trusted family member or friend as the primary trustee, with successor trustees named in case the primary can't or won't act. The Public Trustee should be a last resort.

The trust should give the trustee wide discretion to apply income and capital for the beneficiary's needs, without forcing distributions that affect government benefits or that the beneficiary can't manage.

"Can a BFA stop my partner's adult kids from making a claim on my estate?"

No. Family provision legislation cannot be contracted out of by a BFA. Adult children of either party — if they're eligible under the relevant state's legislation — can apply for family provision regardless of what the BFA says.

If excluding family provision risk matters, the work belongs in specialist estate planning, not in the BFA. Strategies like testamentary trusts and inter vivos trusts can sometimes reduce the exposure, but no structure entirely eliminates the risk.

"My partner died after we separated but before the property settlement was finalised. What happens?"

Complex. The BFA, if signed, remains binding on the deceased's estate — the executor carries out its terms. If a BFA wasn't yet signed, the property settlement falls into the estate, with all the usual succession-law consequences. Get legal advice promptly.

If separation had not yet occurred at the time of death, the BFA does not apply at all — the will governs. The two scenarios produce very different outcomes.

The honest summary

A BFA is a powerful family-law instrument but it sits inside a broader estate-planning context. Without coordinated thinking about:

• the will
• the property holding structure
• the BDBN on super
• beneficiary nominations elsewhere
• testamentary trusts where appropriate
• family provision exposure

a well-drafted BFA can be undermined by an inconsistent will, or a will can be undermined by a forgotten BDBN, or a careful estate plan can be defeated by a joint tenancy that survives the will.

When you're entering a BFA, take the opportunity to review the estate-planning side at the same time. The lawyer working on your BFA can flag the estate-planning issues that matter and either handle them (in conjunction with our parent firm MKI Legal) or refer you to a specialist estate-planning firm.