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.
Marriage. The Wills Act 1970 (WA) provides that the subsequent marriage of a testator revokes a Will unless it is made in contemplation of marriage. The Act provides further that the Will is void if made in contemplation of marriage and the marriage is not formalised.
If you intend to marry, have married since making your Will or some time has passed since making your Will, you should have your Will reviewed to ensure that it takes into consideration your new circumstances.
Some older Wills may fall under previous provisions of legislation and have different effects. Generally, Wills older than three years should be reviewed.
Separation. The Wills Act 1970 (WA) provides that a Will is revoked when a marriage comes to an end. A Will should always be reviewed on separation from your spouse or de facto partner to take account of changing circumstances.
As many partners are separated for some time before applying for a divorce, a Will continues to have effect until the divorce is finalised. Accordingly, you should seek legal advice regarding your Will as soon as you separate.
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 the testator may fail unless a contrary intention is stated in the Will. If the beneficiary was a child of the deceased then the Wills Act 1970 (WA) 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 08 9422 8111 or email firstname.lastname@example.org.