All About Estates
By Douglas Buchmayer
August 12th, 2025
It is important to understand and fully appreciate the limited purpose or utility (and necessity) behind Net Family Property clauses…
They are not a catchall clause for sheltering and protecting the inheritance of a divorcing beneficiary, although they usually have the appearance of trying to achieve this objective.
If a beneficiary under a Will is married at the time of the testator’s death, the Family Law Act provides that “Property, other than a matrimonial home, that was acquired by gift or inheritance from a third person after the date of the marriage” does not form part of the beneficiary’s net family property and therefore does not have to be shared with a divorcing spouse (assuming that the gift is kept separate and apart and not comingled with other family assets). So such protection is already a matter of statutory law and has nothing to do with what is stated (or omitted) in a testator’s Will.
However, “Income from property” is not automatically protected in a similar fashion, unless “… the donor or testator has expressly stated that it is to be excluded from the spouse’s net family property”. This, and this alone is the purpose of the Net Family Property Exclusion clause. Such protection is not a matter of statutory law and therefore has to be specifically stated in the testator’s Will.
