If you’re going through a divorce or separation, you want to make sure that you and your family, especially any children, are taken care of.
We’ll explore the implications of a divorce or separation on your will, including the significance of updating your life insurance beneficiaries, the benefits of creating a trust for estate planning, the importance of re-titling joint assets, and the importance of making a new will.
Ensuring your affairs are in order will protect your future and the wellbeing of your loved ones.
What happens to your will after a divorce?
In Australia, certain rules come into play regarding your will after a divorce. While your entire will doesn’t automatically become void, anything related to your former partner may be treated as if they have predeceased you.
This means that you should review your will and make the necessary updates to ensure that it aligns with your current wishes and circumstances. You might want to appoint a new executor, update beneficiaries, and make any other necessary changes.
Work with a legal professional or an estate planner to give you the guidance to make sure your will reflects your present intentions and ensure your loved ones are taken care of as you envision.
Life insurance beneficiaries
When it comes to life insurance beneficiaries after a separation in Australia, it’s crucial to consider a few key factors. Generally, if you have a life insurance policy and you get separated and/or divorced, the beneficiaries named in the policy will remain unchanged unless you update the policy. This means that if your former partner is listed as a beneficiary, they may still receive the policy proceeds unless you make the necessary changes.
However, if you have a binding death nomination in place, it works differently. A binding death nomination is a formal instruction to the insurer about who should receive the policy proceeds in the event of your passing. After a separation, this nomination will be revoked unless you update it within 28 days of a divorce being finalised.
Keep in mind that relevant agreements or court orders can also influence the treatment of life insurance beneficiaries, such as the division of policies or allocation of proceeds. Taking the time to review and update your life insurance beneficiaries can ensure your wishes are upheld and your loved ones are provided for pursuant to your current wishes.
Creating a Trust for estate planning
When it comes to safeguarding your assets and ensuring your beneficiaries are taken care of, creating a Testamentary Trust after a divorce or separation can be a game-changer.
A Testamentary Trust is a trust established within your will that takes effect upon your passing. It offers a host of advantages, including asset protection, tax benefits, and increased flexibility in managing how your estate is distributed.
If you’ve experienced a separation, a Testamentary Trust becomes even more valuable in securing your assets and honouring your wishes. It enables you to provide for your children from your first marriage while also safeguarding your assets from a new partner or their family. This way, you can strike a balance that ensures your loved ones are cared for while preserving the legacy you’ve worked hard to build.
Consider speaking with legal professionals who specialise in estate planning to explore the benefits of a Testamentary Trust and how it can best serve your unique situation. By taking this step, you’ll gain peace of mind knowing that your assets are protected and that your loved ones will be provided for according to your intentions.
Making a new will
When it comes to making a new will after a separation, there are a few things to keep in mind.
Seeking advice from a legal professional or an estate planner is crucial to ensure you understand your options and meet all the legal requirements.
Start by reviewing your existing will to make sure it aligns with your current wishes and circumstances. This may involve updating beneficiaries, appointing new executors, or making other necessary changes. Consider which assets you want to include in your new will and how you want them distributed, taking into account any tax implications. Don’t forget to appoint executors and trustees to manage your estate and, if you have minor children, any assets left to them.
Once your new will is drafted, be sure to sign it in the presence of two witnesses who are not beneficiaries under the will. Safely store your new will and inform your chosen executor of its location.
Making a new will after a divorce or separation is a vital step in ensuring that your assets are distributed according to your current wishes, so it’s important to seek professional advice and follow the necessary steps to ensure it is legal and accurate.
Resources and support
Updating your will or creating a new will can be a complicated process, but you don’t have to navigate it alone. There are various resources and support available to assist you every step of the way.
Lawyers and solicitors can offer valuable advice and guidance, ensuring that your will meets all legal requirements and reflects your wishes. Estate planners specialise in estate planning and can help you create a new will tailored to your specific circumstances, including considerations like estate taxes and asset protection.
The Public or State Trustee in each state and territory provides comprehensive services related to estate planning, including will preparation and executor services.
Online will preparation services can also be convenient, but be sure to choose a reputable service that provides legal advice.
Community legal centres are there to help those who may not have the means to afford private legal professionals, offering advice on will preparation and other legal matters.
Does divorce have an effect on a will?
Yes, divorce can have an effect on your will in Australia. In most cases, divorce will revoke any gifts or appointments made to your former spouse in your will, unless your will states a contrary intention, as well as any appointment of them as an executor or trustee.
It’s important to review and update your will after a divorce to ensure that it reflects your current wishes and takes into account any changes in your circumstances, such as the end of a marriage. Seeking professional legal advice can help ensure that your will is legally valid and reflects your wishes.
Does divorce revoke my will?
In Australia, divorce generally revokes any gifts or appointments made to a former spouse in a will, as well as any appointment of them as an executor or trustee. However, divorce does not necessarily revoke the entire will.
Section 13 of the Succession Act 2006 (NSW) provides that divorce will revoke any gift, bequest, or appointment made in a will to a former spouse, unless a contrary intention is expressed in the will. This means that if your will specifies that you want your former spouse to receive a gift or appointment, the gift or appointment will not be revoked by divorce.
It’s important to note that the effect of divorce on a will can vary depending on the state or territory in which you live, and there may be exceptions or special circumstances that apply. It’s important to seek professional legal advice to ensure that your will is updated and reflects your current wishes after a divorce.
Does a spouse automatically inherit everything in Australia?
No, a spouse does not automatically inherit everything in Australia. The inheritance of a deceased person’s assets depends on several factors, such as whether the deceased person had a valid will, the terms of the will, and the rules of intestacy in the State in which the deceased person resided.
If the deceased person had a valid will, the will governs the distribution of their assets. The will may name a spouse as a beneficiary, but it’s important to note that the spouse is not guaranteed to inherit everything. The distribution of assets will depend on the terms of the will.
If the deceased person did not have a valid will, the rules of intestacy will apply. In Australia, each state and territory has its own intestacy laws, but generally, the spouse is entitled to a share of the assets, along with any children or other relatives.
It’s important to note that the laws regarding inheritance can be complex and vary depending on the specific circumstances. Seeking professional legal advice can help ensure that your assets are distributed according to your wishes and in compliance with relevant laws.