When Is It Appropriate to Review Your Estate Planning?

Estate planning is the process of arranging your affairs in a way that suits your needs now, protects you if ever mental capacity is lost, and ensures that assets are passed to your intended beneficiaries.

Proper planning provides several important benefits. Perhaps the largest of these is the peace of mind it can provide ensuring financial support for the people you care most about.

What does estate planning involve?

 A thorough estate plan will deal with a range of matters including some or all of the following documents:

• A Will, however, not all assets are necessarily covered by a Will;
• Superannuation death nominations -who will receive any super after death. Many Australians now hold a considerable proportion of their wealth through superannuation;
• Testamentary trusts - to distribute assets to beneficiaries;
• Power of Attorney, appointing someone to conduct one’s affairs;
• Enduring Guardianship - allowing personal and lifestyle decisions to be made if you lose mental capacity;
• Advance Care Directive - giving instructions regarding medical treatment if you are no longer able to communicate.

Estate planning is not something that can be done once and forgotten about. Circumstances change and your wishes may too. It is sensible to sit down regularly and review the situation, particularly when there has been a significant life event. Set out below are some of the most likely events that should cause you to review your Estate Plan with your advisor.

When should you review your estate plan?

1.Separation and Divorce

Divorceautomatically revokes certain parts of a Will, such as leaving a gift to your former spouse or appointing them as the executor of a Will. However, in NSW this automatic revocation does not apply to the breakdown of a de facto relationship.

Separation, on the other hand, does not affect a Will. In NSW, a person must be separated for 12 months before a family court will finalise a divorce. Should one party pass away in this period, the surviving spouse will still inherit and if the Will names them as executor, they could still take up that role. It is advisable to update a Will quickly after separation.

Similarly, it is also important to revoke any appointment of your former spouse as attorney or Enduring Guardian and notify them to this effect.

2. Marriage

The general rule is that if you marry after making your Will, then it is revoked. There are some exceptions, such as if the Will was made in contemplation of the marriage.

If you die before a new Will is in place, then you will be deemed to have died intestate, which usually means the whole of the estate would go to your surviving spouse. This may be satisfactory, but many people will have multiple beneficiaries so it may not reflect your intentions. For example, if you have children from a previous marriage, or any other friends or family members you might have wished to make provision for.

Same-sex couples who were legally married overseas are now recognised in Australia. If you made a Will before the new laws came into effect it is possible your Wills are now invalid.

3. Changes to the composition of your family

The arrival of children, or even grandchildren, means updating a Will to ensure that they are provided for. If this is not done, they may eventually need to make a family provision against the estate. New family members should be specifically named to avoid any confusion.

This might also be the time to update your Power of Attorney to ensure that your chosen attorney can provide benefits for the reasonable living and medical expenses of any children.

It may be necessary for you to delete someone who was formerly mentioned in the plans but where it is no longer appropriate. This may be because of a death or divorce in the family. Beneficiaries may have passed away thoughts changed about a disposition or appointment of an executor or attorney.

It may be desired to disinherit a family member who has been unacceptably irresponsible in some way or is now estranged from the family.

4. Significant changes to assets or circumstances

A significant change in assets or liabilities should be a prompt. For example, on buying or selling your family home, or setting up a family trust. How might a sale of a specific asset have affected beneficiaries?

Similarly, a considerable change in the value of the estate since the plan was devised is a trigger to review how your estate will be divided and decide if that is still what you desire in light of the new circumstances.

Contemplation of your retirement or transition to care may also occasion a review.

5. Changes to persons with duties to perform

Executors and trustees are the people who will implement an estate plan. Even if appointments were well considered at the time, circumstances can change. Are they still willing and able to perform their roles? Have things become more complex? It may be necessary to consider and determine if they are the best choice for these positions today.

Significantly, if it is the case that a person named in the estate planning documents becomes unable or unwilling to act, new appointments need to be made and documents amended accordingly.

The importance of estate planning. Significant events should prompt consideration of reviewing and updating your estate plan. This is so that current wishes are reflected and the significant others your life are catered for. This will also assist those who have been asked to look after your affairs when you cannot.

Whether the affairs are complex or relatively simple making sure that there is a carefully considered estate plan (including estate planning documents) could make the administration of your estate more straightforward and cost-efficient.

Contact our Estate Planning Lawyers in Sydney, NSW

The specialist lawyers at Szabo & Associates Solicitors can advise on all aspects relating to Wills and estate planning. Please call us on 02 9281 5088 or fill in our online contact form.