Why it's important to update your Estate Plan when you separate or divorce
Divorce
A divorce will revoke clauses in your Will appointing your former spouse as an executor and beneficiary. However, you should consider making a new Will after divorce to ensure that the Will appoints a new executor and new beneficiaries.
In the event you separate (and you do not have a Will, and are not divorced), and a person predeceases an ex-partner, that ex-partner can make a claim against the deceased person’s estate. Therefore it's vital to consider updating your Will or even starting the process to put one in place to ensure your wishes are covered in the event of your passing.
The Importance of a Will
A Will is a document that sets out how you want your estate to be distributed. It is important as this document ensures you have your assets dealt with as you want them to. A Will only has effect after a person passes away. A Will also sets out who is responsible for dealing with your estate and how that estate will be distributed. You can set out in the Will at what age a beneficiary is to receive their inheritance. For example, the Will can provide that a child is not to receive their inheritance until they reach the age of 25 years.
A Will enables the executor (the person administering the estate) to apply for Probate. Probate is the Court order that provides the authority for an executor to administer and distribute an estate.
Joint assets are dealt with in a specific manner. For example, if two people hold a joint account (person A and person B), and person A passes away, the other account holder, person B inherits the account by way of survivorship. This concept applies for joint tenancy on a piece of real estate, if person A passes away, person B inherits the real estate by way of survivorship. Probate is not required for joint assets.
Therefore, if you pass away without a Will, this means that your ex-partner can make a claim against your estate and can be entitled to the whole of your estate. We strongly recommend if you are going through a separation or divorce that you speak to a Solicitor as soon as possible to update your Estate Plan.
Enduring Power of Attorney and Enduring Guardianship
It's also important to appoint someone to make decisions on your behalf in the event you are unable to. An Enduring Power of Attorney is a document that appoints a person or persons to deal with your financial and legal affairs whilst you are alive. The person appointing an attorney is called a principal. This document ceases to have any effect once the principal passes away. However, an Enduring Power of Attorney continues if the principal loses their mental capacity.
An Enduring Guardianship is a document that appoints a person or persons to deal with your medical and health matters whilst you are alive. This document continues in operation even if a person loses their mental capacity.
If you currently have a Will in place that names your ex-partner as the principal in Your Enduring Power of Attorney or Enduring Guardian, they may be able to make decisions on your behalf in the event you lose capacity. You should speak to a Solicitor as soon as possible to update these documents and appoint someone you trust to make these decisions on your behalf.
In summary, it is important to review your estate planning documents if you separate or divorce as not doing so can have significant consequences and can leave your assets in the hands of someone that you no longer trust or wish to hold your assets.
At Orman Solicitors, we have your best interests in mind and will work to protect your wishes. If you would like to make an appointment to review your Estate Plan please call us on 1300 676 267 or email us at reception@ormansolicitors.com.
Sukriti Bhati, Special Counsel