When life circumstances change, your Will may need to change too
Most people put a Will in place and breathe a sigh of relief. It can feel like a big weight off your shoulders, a satisfying tick off the ‘to-do’ list. But did you know that your Will shouldn’t be ‘set and forget’?
While you can update your Will at any time, there are some common life events that often trigger the need to review your Will and ensure it reflects your circumstances and wishes today. Here are a few of them:
1. You entered into a new marriage or de facto relationship
Most people don’t realise that if you get married, your Will is automatically revoked unless it contains a provision that states it was made in contemplation of the marriage. If you have not included this in your Will, it’s crucial to prepare a new one. Similarly, if you prepared a Will prior to marrying that was conditional upon the marriage taking place, and that marriage did not happen, again, it’s important to prepare a new Will.
While a new de facto relationship won’t revoke your Will, if you have moved in with a de facto partner, you should consider updating it. Living together creates a legal obligation for each partner to look after each other, and your de-facto partner may have a need or an entitlement to your assets.
2. You’ve been through a divorce or separation
If you get divorced, your Will is revoked. To what extent, can depend on which state or territory you live in, as the laws are different. For example, in some states, a divorce may revoke any clauses that grant benefits to the divorced spouse. In others, the entire Will may be revoked.
As well as updating your Will after divorce, you may need to consider updating your super beneficiaries, any powers of attorney you have appointed, and any other legal documents you have.
Note that a separation does not affect your Will until the marriage has been formally dissolved. And, in every state except Queensland, the breakup of a de facto or registered relationship has no effect on your Will or any other legal documents.
3. Your family or household has expanded
A new addition to your family or household can call for a new Will. For example, you may have prepared your Will at a time when you did not have any children or grandchildren, so it may not include these family members as beneficiaries of your estate. If someone has moved in with you and/or is financially dependent on you, you may also wish to update your Will to ensure they are taken care of upon your death.
4. There has been a change in your financial situation
A significant change in your financial circumstances and assets should call for a Will update. This can include purchasing a property, setting up a company, business, or trust. On the other hand, maybe your assets have decreased in value or you no longer own assets gifted in your Will. It’s important to review your Will in light of your new financial circumstances and check if it needs updating.
5. There has been a death of a person named in your Will
In some instances, you should consider updating your Will if a beneficiary or executor named in your Will has passed away. While your Will may have an alternate executor and beneficiary listed, updating your Will to ensure the deceased person is replaced can help to avoid complications in the administration of your estate once you pass away.
6. Your children have turned 18 years old
Many people go years without updating their Will, and in that time, their children may have turned 18 or otherwise matured. The current age of your children may affect the way you wish to distribute your estate to them, as you may have had a different plan in place when they were minors. It’s also useful to know that once your children turn age 18, they can also be appointed to act as your executors.
7. Your beneficiary or executor’s circumstances have changed
While you may be focused on your own circumstances, it’s important to consider the circumstances of your executors and beneficiaries. For example, if your executor is ill or unable to fulfil their role, it may be time to appoint someone else in their place. If a beneficiary’s situation has changed, and they now, for example, have different financial needs, are involved in a business or company, or have declared bankruptcy, you may decide to alter your Will to reflect this.
8. There has been a change in legislation
Changes in legislation are frequently overlooked, yet they can have a big impact on your plans. If you become aware that legislation relating to Wills or estates (or super) has changed, it’s a good idea to check in with an expert to understand to what extent your financial affairs may be affected.
Newspapers and online sites may give you a birds-eye-view of the changes, but to truly understand how the changes may affect you, consider seeking some qualified and professional advice.
The above are some common scenarios where life events can trigger the need to update your Will. But, often, it may simply be a case of changing your mind about who you want handling your affairs, and how you want your estate to be distributed when you pass away. Reviewing your Will regularly, or as things change, is a good way to help ensure it does what you need it to.
Greg Burton is an accredited FPA Aged Care Specialist. Contact Carrick Aland’s award-winning Wealth Planning team on 1300 466 998 or visit carrickaland.com.au/wealth-planning/.
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