Untying The Knot

In the last edition of Insight we addressed marriage as an important milestone when one’s will should be reviewed. Separation and  divorce on the other hand are other moments, albeit less pleasant ones, that should trigger a review of your will.

With the emotional strain that can come with separation, divorce or relationship breakdown, it is easy to push “life admin” to the side. When couples separate and ultimately decide to divorce it is important to fight that urge as divorce can significantly affect how your estate is both administered and distributed among loved ones.

The laws in this area differ in Australian states but a common theme in the legislation is a will made prior to divorce will treat the former spouse as dying before the will maker[1] unless a contrary intention is expressed within the will. Divorce will also omit the former spouse from being appointed as an executor, trustee or guardian.

So why does this matter especially where one might want to prevent an ex-spouse from inheriting?

Well, depending on the will in question, eliminating an ex-spouse may create ambiguity as to how the remaining estate is to be distributed, especially where significant assets have been gifted to an ex-spouse. Further, the will may contain gifts to family members of the ex-spouse which will continue to remain in effect.  Key roles involved in the administration of an estate such as executors, trustees and guardians could also be left vacant adding procedural complexity to a will’s administration.

It will be necessary to revive the will after divorce if it’s intended that the ex-spouse will continue to act in certain roles or receive certain benefits in the will.

Whilst the law deals with wills and divorce, there are no such provisions dealing with separation of married couples or dissolution of de facto relationships.  It is not uncommon for married couples to separate and agree to the division of their property but never legally divorce.  In these cases, and for de facto spouses, separation should signal the update of a will to ensure that the former spouse does not inherit from the estate.

Revisiting your superannuation binding death benefit nominations, Powers of Attorney and Appointments of Enduring Guardian goes hand in hand with reviewing your will during separation and after divorce.

Reviewing your will and estate plan during separation and after divorce may not mend a broken heart but will give you peace of mind in knowing that your estate will be administered by the right people and distributed to your chosen beneficiaries.

[1] Wills Act 1968 (ACT) s20A; Succession Act 2006 (NSW) s 13; Wills Act (NT) s 1; Succession Act 1981 (QLD) ss 15, 15A; Wills Act 1936 (SA) s 20A; Wills Act 2008 (TAS) s 17; Wills Act 1997 (VIC) s 14; Wills Act 1970 (WA) s 14A.

Sophie Reid

Associate

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