In order to ensure your wishes are carried out after you pass away, most Australians would be aware that they need to have a will in place.
What many wouldn’t know is that more than half of Australians do something that invalidates a will they’ve previously put together, Argyle Lawyers principle Peter Bobbin recently told the soon-to-be-released Nestegg podcast.
“In Australia, marriage cancels a will in its entirety,” Mr Bobbin said.
With research by Slater and Gordon showing that 54 per cent of Australians are unaware of this, there could be a significant number whose wills may not be worth the paper they’re written on.
And that’s not the only concern.
“In Australia, under most jurisdictions although not all jurisdictions, a divorce doesn’t cancel a will, it merely cancels the other person’s part of the will,” Mr Bobbin said.
“But do understand, the divorce is the divorce, it’s the cancellation of the marriage, it’s a decree absolute that cannot happen for at least 12 months after separation.”
If you and your partner have gone separate ways but have not formally divorced, they may still be able to claim part or all of your estate after your death.
“Right up until [the divorce], they’re still in the will and they’re still entitled to receive,” Mr Bobbin said.
Depending on your jurisdiction, a divorce may still only revoke your former spouse’s status as your executor or revoke their claim to a gift left to them.
Either way, you don’t want to leave these ambiguities up to the courts to interpret after you’re gone, so when should you review your will and estate plan?
“One of the things that I often recommend is that you include some of your important documents behind your tax return,” Mr Bobbin said.
“Every year, you come to get your taxes done, you’ll see the important documents and all you need do is [ask], ‘Has anything happened in that past 12 months that necessitates a change?’”
There are also other crucial times you can review your arrangements.
“Some of the other occasions you’d no doubt identify is the birth of children, the passing of a person, the receipt of a windfall of some form, a change of investment structures, when adopting investment structures such as a family trust, moving superannuation or changes of superannuation legal principles as we’re facing at the moment with the introduction of the $1.6 million pension cap,” Mr Bobbin said.
“These are all time or trigger points at which a bit of a review is undertaken.”
The Nestegg podcast will be released shortly. It shares insights on how to create, grow and manage your wealth better.