Your Will might be the very last thing you want to think about when separating from your spouse.
However, not taking the time to review your estate planning can have serious unintended consequences in the event that you die or become incapacitated during the resolution of your family law matter.
Why separation is a trigger to review your estate planning
There are certain life events that automatically impact upon the validity of your Will and other estate planning documents. Marriage and divorce, for example, revoke otherwise valid provisions of a Will and make updating your estate plan essential when either of those events occur.
Separation does not have this same effect for married couples. If you have a Will and have separated from your husband or wife, the fact of your separation has no effect on your Will or Enduring Power of Attorney. For most couples, this will mean that if you die or become incapacitated prior to the finalisation of your divorce, your former spouse will be given both a legal role in the administration of your affairs, and receive whatever gifts they are entitled to as set out in your current Will (often your whole estate). This will be the case even if you have completed a property settlement with your former spouse but are not yet divorced.
Often this will not be your intention, particularly if you have children and/or there are new partners and other children involved.
There are also undesirable consequences if you die without a Will prior to finalisation of your divorce. Your former spouse will still be considered your legal spouse for the purposes of the intestacy rules, which may see them inherit all or part of your estate depending upon your circumstances, potentially to the exclusion of a new partner.
Different rules apply for separating de facto couples, which can also be a minefield and is equally crucial to consider upon separation from your partner.
What needs to be reviewed?
Estate planning is not “one size fits all”. It is also not a simple matter of writing a Will, which only has legal operation on your death, and securing it in safe custody until that day eventually comes.
There are many other factors which make up a thorough estate plan, all of which require careful consideration to ensure your wishes are carried out correctly, and require regular review. These can include:
- powers of attorney and enduring powers of attorney;
- advance health directives;
- the ownership of life insurance policies;
- superannuation death benefits;
- jointly owned properties; and
- the structure of any corporate or trust entities in which you have an interest.
When to update estate planning
In addition to separation from a marriage or de facto partner, the following events are good indicators that it is time to review and update your estate planning:
- a change in your family circumstances, including:
- marriage or the beginning of a de facto relationship (in particular if you and/or your spouse have children from a previous relationship);
- the birth of children or grandchildren;
- the death of an executor or beneficiary already named in your Will;
- a significant change in financial circumstances.
When preparing or updating your estate plan, it is important to seek advice from a qualified legal practitioner, together with your accountant and financial planner.