A Will is not a 'set and forget' document. These life events are a signal that it is time to review your estate plan.
A Will reflects your wishes at the moment you signed it — who you wanted to benefit, who you trusted to administer your estate, and how you wanted your assets distributed. But life moves on, and so should your estate plan. A Will that was perfect five years ago may no longer reflect your family, your assets, your relationships or your wishes, and in some cases it may create more problems than it solves. For this reason, a Will is not a 'set and forget' document — it is a living document that should be reviewed and, where necessary, updated as your life changes.
Marriage is one of the most significant triggers for a Will review, and not only because of the obvious change in your personal circumstances. In most Australian states, marriage automatically revokes a Will made before the marriage — a legal rule designed to prevent a person being accidentally bound to an outdated distribution that predates their spouse. This means that if you marry without updating your Will, you may effectively die intestate as to any assets not covered by an exception, with your estate distributed according to a statutory formula rather than your wishes. The rule has some exceptions and varies by state, so the safe course is always to review and, if necessary, update your Will when you marry.
Divorce, separation and the end of a de facto relationship are equally important triggers. In most states, a divorce (the granting of a decree of dissolution) automatically revokes any gift to the former spouse and any appointment of them as executor — but the effect varies by state, and the position is different again for the end of a de facto relationship, which does not have the same automatic effect. The result is that after a relationship breakdown, your Will may not do what you think it does: it may leave assets to a person you no longer wish to benefit, or it may appoint as executor someone who is no longer appropriate. A review after any relationship change is essential.
“The birth or death of a beneficiary is a clear signal to revisit your Will. A new child or grandchild may change how you want your estate distributed, and may raise questions about guardianship appointments for minor children and the structure of any trusts you have established. The death of a beneficiary or an executor, similarly, may leave gaps in your plan that need to be filled — a substitute executor may need to be named, a substitute beneficiary may need to be considered, and the structure of any testamentary trusts may need to be revisited to reflect the changed family.
A significant change in your assets is another common trigger. If you have acquired or sold a business, bought an investment property, received a substantial inheritance, moved significant assets into or out of superannuation, or restructured your holdings, your Will may no longer accurately reflect your estate or your intentions for it. Particular care is needed where assets are held in structures — trusts, companies, SMSFs — that are not governed by the Will, because the interaction between your Will and those structures can be the difference between a plan that works and one that produces unintended outcomes. Superannuation is a common example: as death benefits do not automatically form part of your estate, a change in your superannuation arrangements should prompt a review of your binding death benefit nomination.
Moving interstate or overseas also warrants a review. Estate planning laws vary between Australian states, and the effect of a Will made in one state can be different when assets are held in another, or when the person is domiciled elsewhere. Moving overseas introduces a further layer of complexity, including potential issues of domicile, tax residency and the recognition of foreign Wills. If you have relocated, your existing Will may still be valid, but it may not be optimal for your new circumstances, and a review is advisable.
Even without a major life event, we recommend reviewing your Will every three to five years to account for changes in the law, your family circumstances and your wishes. Laws change — family provision legislation, superannuation rules and tax provisions are all subject to amendment, and a plan that was optimal when it was drafted may benefit from adjustment. Family circumstances drift — children grow into adulthood and may no longer need the protective structures that were appropriate when they were young; executors and trustees may have aged or moved away; and your own wishes may have evolved.
A short review now can prevent serious problems for your family later. An outdated Will can lead to unintended distributions, to family provision claims, to disputes about the interpretation of ambiguous terms, and to the appointment of executors who are no longer suitable — all of which can erode the estate and damage family relationships. The cost of a review is modest; the cost of not reviewing can be profound.
If it has been a while since your Will was last reviewed, or if any of these life events have occurred, book a Discovery Call. We will help you understand whether your current Will still does what you intend, and if not, we will help you update it so that it does — working alongside Abbott & Mourly Lawyers to ensure that the legal, tax and personal elements are all in order.