Do you know when to update your Will?
Do you know when to update your Will?
Most people are aware that a valid Will determines how their assets are dealt with after they are gone. Wills generally provide for the appointment of a trusted executor/s and gifts 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 events occur and your Will no longer reflects your wishes.
Your Will should be reviewed when your personal or financial circumstances change.
The following events might prompt you to review your Will.
Generally, the Succession Act 1981 (Qld) revokes a Will upon the marriage of the testator but not provisions of gifts to the testator’s spouse at the time of the testator’s death nor the appointment of that person as executor, trustee or guardian. Similar provisions apply upon the registration of a relationship.
A Will made in contemplation of marriage is not revoked when the marriage takes effect.
If you have married since preparing your Will you should have it reviewed to determine whether it still reflects your wishes. 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.
Be aware also that older Wills may fall under previous provisions of legislation and have different effects. As a general rule, Wills older than three years should be reviewed.
The divorce of a testator revokes a Will to the extent of gifts to the testator’s former spouse, the appointment of the former spouse as executor, trustee or guardian and the grant to the former spouse of a power of appointment. The divorce however does not affect the appointment of a former spouse as trustee of property held for the children of the testator and spouse.
Changes in marital status or relationships should always prompt you to review your Will.
As a divorce will result in some provisions remaining valid and some not, your Will should always be reviewed to take into account your new circumstances.
Note also that many partners are separated for some time before finalising a divorce so your Will should be reviewed once you determine that you and your spouse have separated indefinitely.
Birth of a child
Obviously the birth of a child will warrant 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, aging, mentally or physically unwell, or who has moved away. In these circumstances you might consider appointing a new executor. Your Will can provide for a substitute executor if your appointed executor is unable or unwilling to act. There is no limit to the number of executors you may appoint. Your executors should be capable of administering your estate in accordance with your wishes, which is often carried out under the guidance of a solicitor.
Death of a beneficiary
A gift to a beneficiary who dies before, or within 30 days of 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 1981 (Qld) 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 unintended effects.
A Will that nominates a beneficiary who has passed on should be reviewed to ensure that it still has the desired effect.
Disposal of a specific gift
A specific gift is clearly identified and separate to other property of the estate; such as a prestige motor vehicle. If you sell or dispose of such an asset after you make your Will then the gift fails.
The result is that the intended recipient of the gift may receive nothing at all or a much lesser share of the estate than what 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 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 under legal incapacity, 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 warrant the administrative and accounting costs of a testamentary trust then it is worthwhile discussing this option with your solicitor.
Life is unpredictable and change inevitable. For better or worse life changes are likely to impact upon your estate planning. For good measure, you could diarise to review your Will each time your tax return is prepared. Remember that your superannuation, binding death benefit nominations, appointments of power of attorney and enduring guardians also form part of effective life and estate planning. These should also be regularly reviewed.
If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email email@example.com.