Let’s face it. If you bank a dollar every time a lawyer or financial professional mentions the importance of a valid Will, you can probably amass an impressive little sum. But in reality, simply creating a Will isn’t the be all and end all of effective estate planning. It is just one step in an organic process. This means that once you’ve created an estate plan, it’s important to review and revise it as necessary. This is because changes in your personal circumstances may affect its validity.
For example, you should review and revise your estate plan if you are getting married or divorced. This is because either can trigger the revocation of certain provisions in your Will.
You should also take these precautions if:
- you and your spouse created a Will during your marriage;
- and you are now considering separation;
- or you have separated.
It is true that separation won’t affect your Will the same way as marriage or divorce does. In fact, it won’t affect your Will at all. If your estate plan includes an enduring Power of Attorney, separation won’t affect that, either. However, it it may still have unintended consequences.
For example, a spouse that held enduring Power of Attorney during your marriage will retain relevant legal rights if you do not revoke the Power of Attorney. Under the same circumstances, a spouse named as an executor or a beneficiary in your Will, still has a legal right in that capacity as stipulated in your existing Will. Depending on your unique circumstances, this may mean that your former spouse gets your entire estate.
You should also be aware that this holds true even if you have completed a property settlement with your former spouse but are not yet divorced.
This also means that your true wishes may not be realised, especially if you have children or you are in a new relationship.
But what if you don’t have a Will and you die before your divorce is settled? In this case, intestacy rules dictate that your husband or wife will be regarded as your lawful spouse. Again, this may mean that he or she inherits all or part of your estate; and a new partner may be left with nothing.
How to ensure your wishes are followed
As we have noted, estate planning is a dynamic process. This means that your plan should evolve as your circumstances change. This also means you should get into the habit of reviewing your estate plan on a regular basis. Furthermore, you should always get proper legal and financial advice prior to making any modifications.
In addition to your Will, the aspects of a comprehensive estate plan subject to regular review and modification (as needed) generally include:
- powers of attorney and enduring powers of attorney;
- any advance health directives;
- the ownership of life insurance policies;
- any superannuation death benefits;
- any co-owned properties; and
- the structure of any corporate or trust entities in which you hold an interest.
Triggers for review
All of that is well and good, but because everyone’s circumstances are different, it also begs a question. When, or how often, should you review your estate plan?
In our opinion, you should not wait until marriage, separation or divorce is imminent. Instead, we recommend reviewing your estate plan when any of the following transpire:
- the birth of children or grandchildren;
- the death of an executor or beneficiary named in your existing Will;
- you experience or anticipate a significant change in financial circumstances.
The cost of doing nothing
So to recap, failing to review and make applicable changes to your estate plan prior to separation can have unintended consequences. The most significant of these is that your new partner, children and other potential beneficiaries may be left with nothing. If this happens, they have limited opportunities for legal recourse.
In fact, their only option may be to make a family provision claim. This type of claim is used to challenge the allocation of property as set forth in your Will. Unfortunately, making a family provision claim involves bringing an application in Court and can be expensive. It can also result in protracted litigation.
At Harris Lieberman, our Albury and Wodonga wills and estates lawyers team has extensive experience assisting clients with estate planning. If you are concerned about making modifications to your existing estate plan, or if you don’t have one and you’re not sure where to start, our Albury lawyers are here to help. Don’t leave anything to chance. Contact us today.