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Breaking Up Is Hard To Do

01 October 2003 / David Whiscombe
Issue: 3927 / Categories: Comment & Analysis , Income Tax
In an article inspired by the Revenue’s change of practice in Tax Bulletin 66, DAVID WHISCOMBE runs through some of the tax issues to be aware of on a marriage breakdown

To start at the end everyone knows that marriage has an effect on a will; generally it revokes it. But divorce has no such extreme effect. Instead any appointment of the ex-spouse as executor falls away as do any bequests to the ex-spouse.

But note that this happens only on divorce: separation even permanent separation in circumstances where early divorce is likely to be inevitable has no effect on a will. So clients who are separated but not yet divorced may wish to consider an early revision of their testamentary dispositions.

Watch out also for real property held in joint names. Remember that where it is held as ‘beneficial joint tenants’ the death of one joint tenant will result in ownership passing to the surviving joint tenant(s). Since this is a function of property law rather than of the will ...

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