The effect of marriage, separation and divorce on Wills and estate planning

It probably isn’t a surprise to most people that marriage and divorce are big events that impact on a person’s property and parenting rights. What many aren’t aware of, however, is that these events also have a significant effect on their Will and where their superannuation death benefit entitlements may be paid.

Marriage and Wills

In Victoria, the Wills Act 1997 (Vic) says that getting married automatically cancels any Will you made before the marriage. However, there are some exceptions:

    1. If your Will says it was made “in contemplation of marriage,” it won’t be revoked when you get married.
    2. If your Will was made with a specific marriage in mind it remains valid even if it doesn’t mention the marriage explicitly, though proving this can be difficult.
    3. If your Will leaves something to your future spouse or appoints them to a role like Executor and you’re still married to them when you die, those parts of the Will remain valid.

If you don’t update your Will after getting married, your estate might be distributed according to intestacy rules (laws that apply when there is no Will). This could be okay in some cases, but it can make things harder for your family, especially in complex situations like blended families or when there are dependents who wouldn’t benefit under intestacy rules. To ensure your wishes are followed after you die, it’s crucial to get advice on whether you need to update your Will when you get married.

Divorce and Wills

The Wills Act 1997 (Vic) provides for certain parts of your Will to be revoked if you get divorced:

  1. Any part of your Will that makes a gift to your former spouse is revoked.
  2. If your Will names your former spouse as your Executor, this appointment is revoked.
  3. If your Will gives your former spouse a power of appointment or nominates them for a rule
    such as Guardian or Trustee, then this appointment may be revoked depending on the
    identities of the other people who are affected.

There is an exception to these rules; if it’s clear from the terms of your Will that you didn’t intend for these gifts or appointments to be cancelled after a divorce, they will remain.

If you don’t update your Will after a divorce, these changes could result in your estate being distributed according to intestacy rules or not having an Executor to manage your estate.

Separation and Wills

Unlike divorce, separating from your spouse will not have any effect on your Will.

This means that if you don’t update your Will post-separation, your spouse may still inherit any property you have given to them in your Will. If you have named them as Executor of your estate, they would still be entitled to act in this role and manage your estate if you died before formalising your divorce.

For most people this is not an outcome they would want. This is why it is crucial to update your Will during separation to ensure it reflects your current circumstances.

De facto relationships and Wills

Unlike getting married, entering a de facto relationship does not invalidate your Will, but it can still introduce complications. Over time, partners in de facto relationships can gain rights to each other’s property which may conflict with the provisions in your existing Will. If you pass away and your existing Will doesn’t provide for your de facto partner, they would be eligible to make a claim against your estate.

Similarly, separation of a de facto couple does not invalidate any gifts or appointments made in a Will, and it is accordingly important that you obtain advice about your Will if you are going through a separation.

Superannuation death benefits

Superannuation death benefits aren’t considered part of your estate and are not automatically distributed according to your Will.

In order to control what happens to your superannuation after your death you should consider putting death benefit nominations in place. These are directions to the Trustee of your superannuation fund. Nominations may be non-binding, in which case they are basically a suggestion to the Trustee of your superannuation fund as to who should benefit, or binding, in which case the Trustee is required to pay the death benefits according to your nomination provided that you have nominated an eligible person and the nomination complies with the relevant rules.

Non-binding nominations indicate your preferred beneficiaries, but the final decision lies with the superannuation fund’s Trustee. A binding nomination provides the highest level of certainty regarding who will receive your benefits, but comes with the drawback that they usually lapse after three years and must be renewed.

Under superannuation law, only certain categories of people are eligible to receive your superannuation death benefit. One of these categories is your spouse/de facto partner. Beginning or ending a marriage or de facto relationship does not automatically revoke any existing death benefit nominations. However, the end of a de facto relationship or the formalisation of a divorce can mean that a person who was previously eligible loses that eligibility and the Trustee of the superannuation fund cannot pay the death benefit to them. This does not apply where a married couple separate but do not divorce; in that case, each would still be eligible to receive the other’s superannuation because they are still married.

In addition to the restrictions in superannuation law, some superannuation funds have specific rules such as cancelling any nominations if the member of the fund gets married.

It is important to update your nominations if they lapse or if you marry, divorce or enter or exit a de facto relationship to ensure they remain valid and reflect your current wishes.

What does this mean for me?

Creating a Will is a critical step, but it’s equally important to regularly review your Will and update it if necessary. Ideally, you should review your Will whenever there is a significant life event, such as a birth, death, marriage, divorce, or major property transaction. At a minimum, you should aim to review your Will every three to five years to ensure it remains current and reflects your intentions. Regular reviews can help ensure the orderly management of your assets and prevent unintended distributions of your estate.

Reviewing your Will does not have to be a complex or costly process; sometimes it’s just a matter of checking that it still deals with your assets, appoints the right people, and names the right beneficiaries. Seeking advice from a Wills and Estates lawyer can, however, provide peace of mind and help navigate the complexities of estate planning.

How can Novum Law Group assist you?

If you would like assistance reviewing your existing Will or would like to discuss a change to your circumstances with one of our Wills and Estates lawyers, we offer a free 15-minute consultation where we will:

  • Review your existing documents.
  • Briefly discuss your current circumstances.
  • Discuss whether your existing documents achieve your wishes, or whether you need a longer appointment to discuss in more detail and give instructions for updated documents.

We encourage you to contact our Wills and Estates team if you have any questions or need to discuss your estate planning needs. Please call us on 9063 0300 or send us an email to discuss with one of our lawyers, or click here to make an appointment.

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