An estate plan is not something you can set and forget. Life changes constantly, and as it does, your estate plan must evolve to reflect those changes. Major life events such as marriage, divorce, the birth of a child, or significant changes in your financial situation can greatly affect the structure of your estate and how you want your assets to be distributed.
In this article, we explore why it’s crucial to review and update your estate plan after significant life changes, and what key events should prompt a revisit of estate plan documents.
“What happens to my Will if I get married?” or “What happens to my Will if I start a new relationship?”
One of the most important times to review your estate plan is when you get married or enter into a de facto relationship.
As a matter of law, your Will and Enduring Power of Attorney may be automatically revoked on your marriage. There are exceptions to that rule – including whether your Will or Enduring Power of Attorney was made “in contemplation of marriage”. Ordinarily, when your documents are made in contemplation of marriage a special clause is included in each document stating as such.
If you didn’t complete your estate planning with your new spouse in mind (whether you’re getting married or have a new de facto spouse), it is important to review your Will and Enduring Power of Attorney to ensure your spouse is properly provided for, has the power to make decisions for you if you lose decision-making ability, and that overall your documents align with your current wishes.
In addition to updating your Will and Enduring Power of Attorney, consider reviewing other legal documents such as superannuation and insurance policies. These often require you to nominate a beneficiary, and your new spouse should be included if that’s your intention.
Key Changes to Make After Marriage:
“What happens to my Will if I get divorced?” or “What happens to my Will if I separate from my spouse?”
Divorce or separation is another significant event that should prompt an immediate review of your estate plan.
If you don’t update your estate plan after a separation, your ex-spouse could still inherit under certain circumstances, especially if there is a delay in finalising your divorce. To avoid this, it’s essential to update your Will and other estate documents as soon as possible to ensure that your assets are distributed according to your current wishes and that your spouse does not have the power to make decisions for you if you lose decision-making ability.
As a matter of law, once your divorce is finalised it may automatically revoke parts of your Will, including nominations of your ex-spouse to certain control positions and gifts to your ex-spouse. It can get more complicated if you have children under 18 years of age with your ex-spouse, and it’s critical you get legal advice for your particular circumstances.
Key Changes to Make After Divorce:
“What happens to my Will if I have a new baby?” or “What happens to my Will if I adopt a child?”
The birth or adoption of a child is one of life’s most joyful events, and it’s also a key moment to update your estate plan. If you haven’t already, you’ll want to create or modify your Will to ensure that your child is provided for in the event of your death.
Parents should also consider appointing a testamentary guardian in their Will—someone who will look after their child if both parents pass away. This is one of the most important decisions you can make as a parent, as it determines who will raise your child in your absence.
Additionally, you may want to set up a testamentary discretionary trust to manage your child’s inheritance until they are old enough to responsibly manage it themselves. Without proper planning, your child could receive a lump sum of money when they turn 18, which may not be in their best interest.
Key Changes to Make After the Birth or Adoption of a Child:
“What happens to my Will if I my property changes?”
A substantial change in your financial situation—whether positive or negative—can significantly impact your estate plan. This could include inheriting a large sum of money, acquiring or selling property, starting a business, or experiencing financial hardship.
When your financial situation changes, it’s important to review how your assets are distributed in your Will and whether any of your estate planning strategies, such as trusts, need to be adjusted. A larger estate may require more complex planning to minimise taxes and ensure your wealth is passed on efficiently. On the other hand, a decrease in wealth may prompt a revision of your plans to reflect your current circumstances and ensure your loved ones are still cared for appropriately.
Key Changes to Make After a Financial Change:
“What happens to my Will if I get sick?”
A significant change in your health, whether due to illness or injury, should prompt an immediate review of your estate plan. If you’re diagnosed with a terminal illness or face long-term incapacity, it’s essential to ensure your estate documents reflect your wishes regarding medical care, financial management, and distribution of assets, and to obtain financial advice on strategies that may be available to you, such as the withdrawal of superannuation for example.
Enduring Powers of Attorney and Advance Health Directives are crucial documents to review during these times. An Enduring Power of Attorney allows someone you trust to make financial and personal (including health) decisions on your behalf if you’re unable to do so. An Advance Health Directive allows you to make medical decisions now while you have the capacity to do so, so that the document speaks for you in the future if you have lost capacity to make those decisions. Having an Advance Health Directive ensures your wishes are known in the event you are unable to communicate them and can also relieve the burden on family members of having to make their “best guess” of what you would want in that situation.
Key Changes to Make After Health Changes:
“What happens to my Will if I move?”
Different states and countries have different laws regarding Wills and estate planning. If you move to a new state or country, it’s crucial to review your estate plan to ensure it complies with local laws and will be upheld in your new jurisdiction.
Key Changes to Make After Moving:
Life is unpredictable, and your estate plan should evolve as your circumstances change. By reviewing your Will and other estate documents after major life events, you ensure that your assets are distributed according to your current wishes and that your loved ones are provided for.
At Sun Wills & Estates, we encourage our clients to regularly review their estate plans and make updates when necessary. Whether you’ve recently experienced a major life event or it’s simply been a few years since your last review, we’re here to help guide you through the process and ensure your estate plan is always up to date.
Book our heart-to-heart initial consult now to get started – use our online calendar to see our real time availability and book at a time convenient for you!
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