The 5 golden rules for when you should renew your Will
While a Will may not have an expiry date, estate planning is an ongoing responsibility. Your Will and other estate planning measures such as Superannuation Binding Death Benefit Nominations, should be reviewed regularly and at the advent of different life stages.
In this blog, I outline the five golden rules for when you should renew your Will.
Life stages and Wills
Your Will, as a crucial part of your broader estate plan, should adapt to the natural progression of life - if constructed properly.
For example, a husband may leave the balance of his estate to his wife in his Will but may also say that in the event she should predecease him then the balance shall instead be shared equally between their children.
In this way, by accounting for the “next step” should anything happen to his wife first, he has avoided a partial intestacy and accounted for the “what if” scenario.
To learn more about the difficulties of intestacy, visit our article “What is a Will and why do I need one?”.
The Golden Rules: when you must renew your Will
As solicitors drafting your Will, we do our best to account for likely future scenarios. However, as circumstances change, so must the terms of your Will.
As a rule of thumb, you should obtain updated legal advice in relation to the validity and relevance of your Will every three to five years. This enables your solicitor to ensure the terms in your Will remain reflective of your wishes and capable of meeting the outcomes you seek to achieve.
However, there are certain life stages where you must obtain updated advice and consider revising your Will accordingly:
1. Changes in relationship status
A change in relationship status can impact the effectiveness of provisions in a Will and in some cases can invalidate certain provisions, or in the case of marriage will invalidate the Will entirely.
If you are married and make a Will leaving an entitlement to your spouse or appointing them as your Executor, should you divorce, the provisions that relate to your spouse will no longer be effective. Specifically, the Will would be read as though your spouse had died before you. In this event, it is imperative to update your Will to reflect your wishes, no matter what they are.
As an example, you may wish to appoint a new Executor or beneficiary, or you may wish to leave the provisions relating to your ex-partner as is. Either way, you will need to renew your Will in order for it to be effective.
It is important to note however that if you have children together, any trustee responsibilities you have given to your spouse over property for the benefit of those children are not revoked.
Further, the distinction between divorced and separated is critical. Even if you have been separated for twenty years but remain legally married, a Will that nominates your spouse as a beneficiary will remain valid.
On the other hand, if you make a Will while single or in a de-facto relationship, any future marriage will in fact automatically invalidate that Will unless it is made in contemplation of marriage. Whether your initial Will is made in contemplation of marriage is a matter of construction and will depend upon the specific wording used.
2. Birth of a child
The birth of a child is a critical time to renew your Will. Parents have a moral obligation at law to consider the financial needs of their children and in particular the need to provide for their proper maintenance and support in their Will. This is especially true when the children are minors under the age of 18, or if they are financially dependent adult children.
Failure to adequately account for a child in your Will can mean that they miss out and that their financial needs are not supported once you’re gone.
It may also expose your Will to a challenge as a child of the deceased is a person eligible to make a claim for a Family Provision Order under Part IV of the Administration and Probate Act 1958. The Court may then resolve to provide for the child out of your Estate, despite what your Will might say.
For these reasons, whether it’s your intention to provide for your children in your Will or not, you must obtain updated advice to ensure your Will is constructed accordingly to meet that end.
3. Death of a beneficiary or Executor
In the event that an Executor or beneficiary named in your Will dies before you, it may mean that you need to rethink the provisions set out in your Will.
Let’s take the example of the husband and wife again.
Say a husband appoints his wife to be his Executor, the Guardian of their minor children, and the sole person to whom he leaves the balance of his Estate. Then, say his wife predeceases him. Who will be his Executor now? Who will be the guardian of his children throughout their minority? And who will he leave the balance of his estate to?
A good Wills & Estates solicitor will include alternatives in your Will to account for these possibilities. Using the example, upon his wife predeceasing him the husband may have appointed a sibling or friend to be his alternative Executor and may have left the balance of his estate upon trust for his children upon their attaining their majority. However, in this circumstance, it will now be appropriate to consider an extra step. What if something were to happen to the alternatives?
To avoid a partial intestacy, it is critical to consider to whom he would like to leave his Estate in the event his children should predecease him. While it may seem unlikely to occur, prudent Will drafting would account for this scenario.
Failure to do so may leave the estate wanting for a beneficiary and result in the Executor resorting to the formula set out in the legislation to determine the eligible beneficiaries under the laws intestacy.
4. A change in assets
A common misconception is that all assets at the time of a person’s death form part of their Estate and can be gifted in their Will. Some assets will not form part of the Estate and will, therefore, require proper Estate Planning to ensure they are dealt with correctly.
As an example, unless the trustees resolve to pay the member’s death benefit to the Estate or a Binding Death Benefit Nomination to the Legal Personal Representative is made, superannuation proceeds will not form part of the Estate and therefore cannot be gifted in the Will. Likewise, any interest in a discretionary trust will not be available for gifting under the Will and distribution by the Estate.
Also, consider real property. You may wish that your interest in your home be gifted to someone in particular. To achieve this, a review of the manner in which the property is held will be required. If you hold the property jointly with another person, for example, your spouse, it will not be possible for you to gift your share in the property in your Will. In accordance with the laws of survivorship, upon your death, the property would automatically pass to your spouse as the surviving proprietor.
To achieve the successful gifting of your share in the property, your solicitor would need to apply for a change in the manner of holding to ‘tenants in common’. Your share would then form part of your estate and become available for gifting under your Will.
It’s important to note that the laws of survivorship also apply to other jointly held assets including bank accounts and shares. To learn more about jointly held assets, see our article “Will my Will cover all my assets?”.
For these reasons, it’s important to disclose all your assets to your solicitor during your Will-making appointment to ensure measures are put in place to permit their proper dealing and distribution.
When making your Will, it’s crucial to take stock of what you have and to think carefully about who you wish to leave your estate to someday. In the event of a major change in assets, such as receiving an inheritance or a settlement sum after court proceedings, you may be in a position to leave more to a beneficiary or to even consider including new beneficiaries.
5. Once children reach their majority
As our families grow, so does the need to reconsider how we wish to distribute our estate.
Once your children become adults, you may wish to think about including any current and future grandchildren in your Will. This can be done by leaving something to them in the first instance (e.g. a gift of an heirloom or nominal sum of money), but perhaps more importantly by ensuring they receive their parents share should their parent die before you. We often refer to this as the “grandchildren clause”.
As children reach adulthood, it is also relevant to re-evaluate the provisos that stipulate when they will attain their interest in their share of the Estate.
For example, your Will may state that they must survive you and attain the age of 21 years and may not include a “grandchildren clause” given that at the time the Will was drafted your children were only minors.
In the interest of keeping your Will relevant and reflective of current circumstances, your Wills & Estates solicitor should advise you on how best to implement these provisions.