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Do you know when to update your Will?
Most people know that a valid Will determines how the assets they own personally are dealt with after they die. Wills generally provide for the appointment of a trusted executor/s and the leaving of legacies to chosen beneficiaries. They may also appoint guardians for minor children and give direction for specific funeral and burial arrangements.
When to review your Will
Many people make a Will, arrange for it to be safely stored, and then forget about it.
However, in many situations reviewing your Will is just as important as preparing it, particularly when things happen and your Will no longer reflects your wishes.
Your Will should be reviewed whenever your personal or financial circumstances change.
The following events might prompt you to review your Will.
Marriage
The Succession Act 1981 (Qld) revokes a Will when the testator marries, but does not revoke a gift to a person to whom the testator marries nor the appointment of that person as executor. Marriage may however void other parts of the Will.
Wills made ‘in contemplation of marriage’ remain effective when the marriage (to the person nominated in the Will) occurs. This avoids statutory provisions that might otherwise void certain parts of the Will on marriage.
If you have married since preparing your Will then it may be time to review it. Even if the Will was made in contemplation of marriage to your present spouse, if some time has passed since preparing it, certain other terms of the Will may no longer be desired.
Separation
The Succession Act 1981 (Qld) provides that upon divorce gifts to a former spouse are revoked, as well as the appointment of a former spouse as executor. A Will should always be reviewed on separation from your spouse or de facto partner, to take account of changed circumstances. Bear in mind also that many partners are separated for some time before finalising their divorce. Separation does not revoke your Will, and we are regularly amazed to find that a client in the midst of a bitter dispute with a former spouse or partner has still not up dated their will leaving their estate to the person they are lighting with.
Birth of a child
Obviously the birth of a child may require revision of your Will to ensure that child is adequately provided for. Your Will can be drafted to distribute assets equally amongst your children, even those born after your Will is made.
Death or ill health of an executor
You may have appointed an executor/trustee of your estate who is no longer alive, or is aging, mentally or physically unwell, or who has moved away. In these circumstances you might consider appointing one or more new executors, either jointly or successively. Your Will can provide for a substitute executor if your appointed executor is unable or unwilling to act. Your executors should be capable of administering your estate in accordance with your wishes, possibly with some guidance from a solicitor, (including regarding tax or other consequences).
Death of a beneficiary
A gift to a beneficiary who dies before, or within 30 days after, the testator may fail unless a contrary intention is stated in the Will.
If the beneficiary was a child of the deceased then the Succession Act provides that the deceased child’s children will instead take the gift. If the testator has no children and a substitute beneficiary is not nominated the gift falls to the residuary estate. This can have serious unintended effects.
A Will that nominates a beneficiary who has died should be reviewed to ensure that it still has the desired effect.
Disposal of a specific gift.
If specific gift is clearly identified and separate to other property of the estate (such as a property or a motor vehicle, or proceeds of superannuation or insurance) and you sell or dispose of such asset after you make your Will, then that gift will fail.
The result may be that the intended recipient of the gift receives nothing at all, or a much lesser share of the estate than you intended. This may have a significant effect, particularly if the asset is of substantial value.
Acquisition of interests in a company or partnership
Property owned by a company cannot generally be disposed of by Will, however the shares in a company may be gifted. If you acquire an interest in a partnership you should consider what happens to that interest when you die. Most partnership agreements set out what happens when one partner dies, and how that partner’s share of the partnership is distributed. New business interests or relationships should always prompt reviewing your Will.
Increased wealth, potential challenges to a Will, vulnerable beneficiaries
Your Will may incorporate a testamentary trust to provide for minors, protect beneficiaries lacking legal capacity, safeguard beneficiaries’ assets from creditors or family provision claims, and provide certain income tax advantages.
If you would like these protective measures incorporated in your estate planning and the value of your assets, or the tax advantages, warrant the administrative and accounting costs of a testamentary trust then it is worthwhile discussing this option with your solicitor.
Summary
Life is unpredictable and change inevitable.
For better or worse life changes are likely to impact upon your estate planning.
We suggest you review your will and associated documents not less often than every 3 – 5 years. Remember that your superannuation binding death benefit nominations, appointments of power of attorney and enduring guardians also form an essential part of effective life and succession planning. These should also be regularly reviewed.
Remember that if you do not make decisions and choices about what is to happen if you suffer impaired capacity or die, it is likely that your loved ones will be at the very least put to unnecessary stress and substantial expenses.
If you or someone you know wants more information or needs help or advice, please contact us on (07) 5443 4866 or email kwaddington@gwlaw.com.au.
Ken Waddington
Partner
(07) 5443 4866