5 times to review your estate planning
As the holiday season approaches and travel plans are made, many people consider it the right time to update their estate planning. In addition to reviewing your estate planning before you travel, we take a look at five significant life events that should prompt you to review and update your estate planning.
Marriage automatically revokes a will, unless it is made in contemplation of a particular marriage. However, if a will made before marriage appoints the spouse at the time of death as executor, trustee, guardian or leaves a gift to that spouse, those parts of the will remain valid and the balance of the will is revoked. If the testator did not make a new will after marriage, it could result in an estate that is partly dealt with under the will and partly dealt with on intestacy which could complicate estate administration.
Marriage also revokes the appointment of an enduring guardian, unless the person appointed is the new spouse.
Welcoming a new child into your life may be a chaotic time but it is also a good time to review and update your estate planning.
You may wish to update your will to ensure that your new child is provided for. Failure to do so could result in that child making a family provision claim against your estate if they remain absent from your will.
You may also wish to update your power of attorney to ensure that your attorney can provide benefits for the reasonable living and medical expenses of your new child.
Changes to your assets
A significant change in your assets such as buying or selling the family home or establishment of a family trust should prompt an update of your estate planning. This will allow you to ensure that your estate is distributed according to your wishes.
For example, if a beneficiary of your will is only given a specific property identified by address only and you sell that property, that beneficiary may receive nothing. This could leave your estate exposed to a family provision claim.
Divorce and separation
Unless the contrary intention appears in the will, the divorce or annulment of a marriage, automatically revokes parts of the will leaving a gift to the former spouse or appointing them as executor, trustee or guardian. In New South Wales, this automatic revocation does not apply to the breakdown of de facto or long term relationships.
It is also important to revoke any appointment of you former spouse or partner as your attorney or enduring guardian and to notify them of the revocation. Powers of attorney and enduring guardians are powerful legal documents and you should only appoint people that you trust to act in your best interest.
Named person unable or unwilling to act
Where it becomes apparent that a person named in your estate planning documents becomes unable or unwilling to act (eg under mental incapacity or has passed away), your documents should be updated to name new primary and substitute appointees.
This will reduce unnecessary complications and costs with obtaining court or tribunal orders appointing managers or guardians for you if all of your appointees are unwilling or unable to act. This would also make an application for probate simpler.
Your estate plan is not something you can do once and forget about for the rest of your life. All of your life’s significant events, both joyous and not so joyous ones, should prompt you to review and update your estate planning to ensure your latest intentions are reflected. Regular updates to your estate planning make it easier for those you have entrusted to look after your affairs when you are unable to do so yourself.