The provisions of your Will should continue to reflect your current circumstances. As Tony likes to say, its provisions should reflect your wishes as if you had “died yesterday”. When changes happen in your life, it’s therefore important to consider how these changes would impact on how you wish the assets which comprise your estate (or those which you have controlled during your lifetime) to be made available for the use and benefit of those who you wish to benefit following your death. In this post, I have outlined several common circumstances that should lead you to review, and potentially update, your current Will.
Marriage, separation or divorce
It is important that you review your Will after marriage or divorce to ensure that it meets your current wishes and properly reflects your changed circumstances.
As a general rule, your Will shall be revoked if you marry after its execution. If you and your partner are not yet married, but intend to marry in future, your Will can include a provision expressing your intention to not revoke the Will by your marriage and that it is made in contemplation of that event.
Similarly, if you and your spouse were to divorce, any bequest to your spouse will cease to have any effect and your former spouse will also cease to be your Executor under the Will without the need for amendment. While this rule may suit most divorced couples, you may have a positive ongoing relationship with your ex-partner and still wish for them to act as Executor (especially if there are children of whom you are both the parents).
Alternatively, your divorce may have seen a radical change in your circumstances, necessitating the appointment of new Executors and the selection of new (or additional) beneficiaries, such as step children. This is true especially if a new relationship results in the blending of the assets which the parties bring (or have brought) to this new relationship. Blended relationships may give rise to the need to enter into an agreement that the parties will not change their Will without the agreement of each other, or after the death of the survivor, thereby ensuring that the children of the first partner don’t miss out by what might otherwise be considered to be an occurrence akin to “Russian Roulette”.
Separation of spouses is not covered by the Wills Act in the same way as marriage or divorce. If you and your partner separate, any gifts or powers given to the former partner under your Will remain in place. In the case of separation, we recommend acting quickly to update your Will to match your current circumstances to avoid the undesirable outcome (at least from the deceased partner’s perspective!) that the majority of their Estate is to go to someone from whom you are now separated.
Children
The birth of children is a major change in your family’s circumstances and an obvious catalyst for reviewing your Wills. Important issues to consider after you have children include:
- Who will look after them if you and your spouse both pass away (Guardianship)?
- Are there any specific items (chattels), such as family heirlooms, which you would like your children to have?
- Is there a particular Will structure, such as a discretionary testamentary trust, which will deliver increased tax benefits for the surviving parent when providing for your children?
- Is there a particular age that your children should reach before they are entitled to anything from your Estate or from the estate of the surviving parent?
These are all questions worth discussing with us as experienced Estate Planning lawyers. If you are not sure yet whether you will have children, or intend to have them in future, it is also important to discuss these different outcomes with your lawyer – whilst it is better to update your Will after having children, we can build some flexibility into your current documents to cover such an occurrence.
Changes in your assets
Most people’s assets change a little bit every day – your bank balance, the value of your home and the items in your possession all fluctuate regularly. When there is a significant change to your asset pool, however, it is important to ensure that your Will reflects this pool, including superannuation benefits and life insurance policies (and noting the potential need to update the level of cover).
One example may be where you have left a specific property (say, ‘my holiday house at Blairgowrie’) to your son in your Will, which you then sell. Your Will may have originally ‘balanced out’ that gift by leaving other gifts or cash of equal value to your other children. Now that the house is gone, the gift to your son fails and he will not be compensated for this loss from your Estate. This would lead to an unequal distribution between your children and subsequently potential for conflict. Any changes to specific gifts, particularly large gifts of significant value, should trigger a review of your Wills.
Another example may be where you and your spouse previously lived in a house that was in only one of your names, but have now purchased a new main residence as tenants in common. It may be appropriate now to change your Will to reflect the change in ownership, perhaps including a life interest for your spouse so that they can continue to live in the property after their death.
Changes in relationships, health and age
Family dynamics and friendships can be complicated. It is not unusual for a client to come into our office who has previously appointed a friend or relative as Executor under their Will, only to say that “we’re not that close any more” or “I haven’t seen them in ages”. When these relationships change, it’s important to reconsider whether your friend should act as your Executor. Similarly, clients may realise when reviewing their Wills that they have left a gift to a friend or family member who is deceased, or although still alive, with whom they are no longer in contact. These are just further examples of reasons to update your Will.
Part of the review process is also considering whether the Executor(s) you appointed are still ‘up for the job’. For example, it may have been appropriate when you were younger to appoint your parents as your executors, but if they are now of an advanced age, it may be time to consider who else could act in their stead. Other changes in the lives of your Executors, such as illness or relocation overseas, may also lead you to reconsider the ongoing relevance of their appointment.
If you can relate to any of the above scenarios, it is time to undergo the review process. Depending on the changes, you may require only a Codicil amending your old documents, which allows incidental amendments without the need to have a new Will prepared.
The team at Tony Kelly Lawyer & Estate Planner primarily focus on the creation of succession and estate plans together with Wills and the associated documentation tailored to cover all aspects of your needs.
Please contact me today to arrange a meeting, videoconference or telephone call to discuss any of the foregoing issues with Tony and me.
Claire L Stollery
LL.B(Hons), B.A, GDLP
Australian Legal Practitioner
Suite 1, Level 1
Stalbridge Chambers
443 Little Collins Street Melbourne, Vic 3000
Tel: (03) 9017 6800
Mob: 0412 261 709
e-mail: cs@tonykellylawyer.com.au
www.tonykellylawyer.com.au