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How does divorce affect estate planning documents?

*This blogpost is limited to New South Wales. The laws in each State and Territory differ in relation to these matters.

Contrary to common belief, divorce does not affect the operation of a Power of Attorney or an Appointment of Enduring Guardians.

The only way (other than a Court order) to revoke either:

  • a power of attorney; or
  • an appointment of enduring guardians

is to sign a form of revocation of each and to serve notice on the attorney/guardian so the attorney/guardian whose powers are being revoked is aware of this.

Does divorce affect a Will?

Subject to the contrary intention being expressed in a Will, if you divorce after you make your Will, it only revokes or cancels any gift to a former spouse and their appointment as executor.

Does marriage affect estate planning documents?

Marriage also has an affect on the operation of your Will depending on whether the Will was specially made “in contemplation” of the marriage.

An Appointment of Enduring Guardian is automatically revoked upon marriage even if the person you marry is the person appointed as your enduring guardian.

A Power of Attorney however, is unaffected by marriage, regardless of your nominated attorney/s.

Regular reviews

If any time your circumstances change, such as a birth or death in the family, a marriage, separation or divorce or a material change in finances (for the better or the worse) you should consider whether your estate planning documents require any updates. It may be that no change is necessary, but it at least should be considered.

FURTHER INFORMATION

For further information in relation to estate planning, contact McKillop Legal on (02) 9521 2455 or email help@mckilloplegal.com.au 

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.

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in Estate Planning  by 01 Jun 2023 0 comments

Contract to Make Mutual Wills

A Contract to make Mutual Wills is an agreement between 2 parties (usually a husband and wife, but can be a same sex couple or a de facto couple) to make Wills in an agreed form.

Usually, they provide that the parties may not act such that those Wills don’t get given effect to, such as:

  • revoking or destroying the Will;
  • making a new Will; or
  • disposing of assets so that they do not pass to the agreed beneficiaries

without the consent of the other party (or the executors/administrators of their estate  if they have died).

Often they are put in place when the parties have had a prior marriage or marriages and there are children of the prior relationship/s and the current relationship.

The benefit of such contracts (or deeds as they often are) is that the parties can take some comfort in providing for the other during their lifetimes (for example by gifting their entire estates to each other in their Wills), but with the overall distribution of their combined estates (on the death of the last of them) passing as agreed in the Wills made pursuant to the document.

Where a party breaches the agreement (such as by changing their Will), that party (or their estate) may be sued by the other party (or their executors/administrators if they have died) for breach of contract.

Whilst mutual Wills can be an effective estate planning tool, they are not for everyone and they can cause unintended complications due to their inflexibility, particularly around subsequent marriages, children and unexpected events following the death of a party.

As with most things, there are also other options or alternatives to consider to get a similar result, including creating life interests in real estate or establishing trusts.

FURTHER INFORMATION

Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email craig@mckilloplegal.com.au.

This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your estate planning needs.

Stay up to date - LinkedIn | Facebook | Twitter

in Asset Protection / Dispute Resolution / Estate Planning / General / Probate / Trusts  by 15 Jan 2019 0 comments