Estate planning considerations for executives if your spouse was to die before you

While executives are usually well advised on matters of asset protection and estate planning, there are situations when their spouse’s estate plan can re-expose their personal assets and wealth to legal and financial claims.

If you’re a senior executive or business owner, it’s common for your family assets to be held in your spouse’s name. But what would happen if your spouse was to die before you? Would those assets, which are now yours, re-expose you to claimants seeking to recover money as part of legal proceedings?

Legal liability is part and parcel of a senior executive’s position. Responsibilities as a director, employer or if you’re the responsible person in a regulated industry, can place you along with your organisation, in the cross hairs of legal action and financial claims.

It would be unusual for senior executives with significant legal responsibilities to be unadvised in matters of asset protection.

Estate planning is a cornerstone of financial planning. It’s the glue that holds all the financial pieces of a long and prosperous life together at the time of death. Savings, superannuation and proceeds from life insurance policies and other assets for both you AND your spouse need to be protected.

Family trusts, company structures and placing asset including the family home in their spouse’s name are common strategies and fundamental to protecting personal assets from claims that may result from business related legal action.

However, claimants can be persistent and it’s not unusual for creditors to challenge estates. In the absence of an estate plan with appropriate asset protection structures, they can lay claim to your wealth before your spouse, children or other beneficiaries receive a single dollar.

Executives generally know this and implement legal mechanisms including having a Will with a Testamentary Trust which activates upon their passing. A Super Proceeds Trust is also common because executives tend to have significant superannuation and similarly, well advised executives usually have valuable life insurance policies safeguarded upon their death.

However, executives often believe their family assets are untouchable simply because they are in their spouse’s name. Unfortunately, that may not be the case.

Estate and financial planning needs to consider the what-if outcomes should either you or your spouse pass away first.

If your spouse pre-deceases you, and family assets transfer to you while you’re involved in a financial or legal claim through your executive position or business dealings, those funds and family assets bequeathed to you could be intercepted by a creditor.

Next steps
If you and your spouse, haven’t looked at your Will for a while, there’s a good chance your circumstances have changed and it may no longer comprehensively address your financial and legal requirements.  May I suggest, your first step is to review your Wills.

Then, it is important for you and your spouse to understand what makes up your financial life and every chance protecting your financial legacy will extend beyond the provisions of your Wills.

While your executive responsibilities may be complex, never underestimate the importance of your spouse’s Will and estate plan nor your or your spouse’s superannuation and insurance (which don’t automatically form part of your estate). Should that person pre-decease you, your family assets could be re-exposed to legal and financial claims.

As an experienced and qualified financial adviser and ESS strategist providing specialised advice for executives, senior managers and professionals, I regularly collaborate with estate lawyers and accountants on behalf of my clients and their spouses, to mitigate risks to their financial lives such as those described here.  If this article has raised questions, please take a moment to give me a call.

For advice about financial planning, executive share schemes and appropriate estate planning for your family group, please contact James Marshall on +61 (0) 7 3007 2080 or email

Learn more about James here.

Executive Strategies is a specialised information hub for executives and senior managers who may have founded their own business or who work for growing private, ASX listed companies or government businesses. Its purpose is to provide access to specialist advisers and information that addresses the often-complex issues affecting their personal prosperity.

Stratus Financial Group and its advisers are Authorised Representatives of Fortnum Private Wealth ABN 54 139 889 535 AFSL 357306. This advice is general and does not take into account your objectives, financial situation or needs. You should not act on it without first obtaining professional financial advice specific to your circumstances.

*Please note: For advice and services relating to this matter that are not offered under the Fortnum Private Wealth AFSL, in accordance with our collaborative advice model, when required, such matters are referred to appropriately qualified professionals.

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