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Getting Hitched or Splitting Up? It’s time to consider your Will & Estate Planning

When planning your wedding, the last thing you want to think of is making a Will. Why would you? Planning a wedding is exciting, and hopefully a stepping-stone for a long and happy marriage.  Any thoughts of you or your spouse dying are likely to be shut out of your mind.

Similarly, when you’re going through a separation or a divorce, your Will is probably not high on your agenda.

However, when you experience either of these life-changing events, you need to be thinking about your Will, your Enduring Power of Attorney and Enduring Power of Guardianship (EPG).

If you have experienced or are currently experiencing any of these events, we suggest you read the relevant section below.

Marriage

According to Section 14 the Wills Act 1970 (WA), the Will you have in place is automatically revoked upon the event of your marriage, unless it is made in contemplation of marriage[1].

The meaning of the phrase “in contemplation of marriage” was considered in Hoobin v Hoobin [2004] NSWSC 705. White J concluded that “contemplation of marriage” was said to mean that the Will is made in the context of “intending, proposing or expecting a marriage, or having a marriage in mind as a contingency to be provided for or as an end to be aimed at [53].

Therefore, to avoid your Will being revoked upon the event of your marriage, your new Will needs to be carefully drafted in way that contemplates your marriage and in effect, safeguards your wishes. Alternatively, after you get married, you should arrange to have your Will updated to reflect your new circumstances as soon as possible.

Are you part of a blended family? If yes, then updating your Will following your most recent marriage is even more crucial.  Your new spouse is now in the category of persons able to bring a claim under the Family Provision Act 1972 (WA) if your old Will does not make adequate provision for them. It is important that you get legal advice to ensure you are fully informed of your obligations to your new spouse and any children from your previous relationship. Failing to get appropriate legal advice could increase the difficulty for your loved ones and increase the risk of costly legal actions.

Separation

Many couples, for one reason or another, merely separate and distribute their martial assets, either through the Family Court or amicably between each other.  They don’t go as far as legally terminating their marriage through a formal divorce.

After their experience of separating their marital assets through the Family Court, couples are often exhausted and undertaking any further legal processes in the Family Court is the last thing they feel like facing.  Particularly if they have no intention of remarrying, they may consider that the legal requirement of actually getting divorced is unnecessary.

However, when it comes to your estate, mere separation is not enough to revoke your Will. If you have not sought legal advice and updated your Will, your spouse may still inherit under that previous Will (presuming that when you were happily married, you made your spouse a beneficiary).

You should also be aware that in Western Australia, separation does not revoke an Enduring Power of Attorney (EPA) or Enduring Power of Guardianship (EPG). If you named your spouse as your attorney under an EPA or as guardian under an EPG, you need to review and update those documents to reflect your current wishes, as you probably don’t want your ex-spouse to be able to act as your attorney or guardian.  

Divorce

Divorce is another life-changing event that will impact your Will.  Divorce means you are no longer legally married to your former spouse.  It also means that generally your former spouse cannot make a claim against your estate.  You may sigh in relief.  However, you should be aware that if at the time of your death there are ongoing maintenance payments being made, your ex-spouse may be able to challenge your Will.

Importantly, divorce also means that any Will you may have had in place, prior to the Divorce Order being issued by the Family court, is no longer valid.  Pursuant to Section 14A the Wills Act 1970 (WA), your Will is revoked on the event of your divorce if your marriage ended on or after 9 February 2008.  Hence, you risk dying without any Will (ie intestate) if you have not updated your Will since your divorce.

Again, to avoid having your Will revoked upon the event of divorce and to safeguard you wishes, it should be carefully drafted in a way that contemplates your divorce.  Alternatively, you can simply make a new Will as soon as your divorce comes through. It may be the last thing you feel like doing, but it is important if you want specific beneficiaries to inherit your estate.

If you named your spouse as your attorney under an EPA or as guardian under an EPG, you need to update those documents to reflect your current wishes, as in Western Australia an EPA or EPG is not automatically revoked by divorce.

So, ordinarily, how often should you review your Will? Every 4-5 years. However, if your circumstances change (ie. You’ve married, separated or divorced), you need to review and probably update your Will immediately.

Shirley Tascone and Emily Nixon from Bespoke Wills and Estates are Lawyers experienced in drafting Wills tailored to the effects of marriage, separation and divorce.  If you need to update your Will as a result of either life changing event, please contact us on (08) 9445-2686.

 

Note: The information contained in this article is of a general nature only and is not specific to your individual circumstances.  The contents of this article are accurate as at the date of posting. However, the relevant legislation and caselaw is always subject to change, therefore affecting the accuracy of the article. You should seek legal advice before acting on any of the information contained in this post.

[1] This is relevant for persons dying on or after 9 February 2008.

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The Supreme Court Slams the DIY Will – Again!

The Supreme Court of Western Australian has yet again criticized homemade Wills.

The message from the Supreme Courts is clear:  DIY Wills should be avoided – full stop!

As a nation, we pride ourselves on being able to DIY virtually everything. Whether it be installing garden reticulation, tiling a kitchen or renovating furniture – there is no doubt that you have probably undertaken some sort of DIY task in your lifetime. With the ever-expanding information available online, DIY-ing has become ever more popular.

However, there should be a ‘rule of thumb’ when you decide what things you should DIY and when you should engage the experts. When the ‘DIY project’ isn’t going to affect anyone other than yourself, then yes, it may be safe to say you are free to take the risk without any consequences.  However, when the ‘DIY project’, such as preparing your Will, affects your loved ones, you should think again.

A case example:

In May 2021, Master Sanderson in Trevor Alan Thompson as executor of the estate of Angela Helen Thompson vs Upton [2021] WASC 158, plainly stated in paragraph 1 of his judgement:

“Yet again, this matter illustrates the folly of persons making homemade Wills.  The estate of the deceased is very modest ($511,000).  There is no doubt a good part of the estate will be consumed in a contest over the meaning of what by any measure is a difficult document.  It is invariably the case that money spent on having a Will professionally drafted is a sound investment.”

In October 2015, Mrs Thompson wrote her own Will, but the contents of her Will made it difficult for the Executor (her husband) to follow.  Her husband, acting appropriately, made an application to the Supreme Court for directions on how to interpret Mrs Thompson’s Will.

No doubt Mrs Thompson thought she was saving on costs by preparing her own Will, but she (and many others before her), were mistaken.  The application to the Supreme Court would likely have incurred considerable legal costs against Mrs Thompson’s estate.  And in fact, Master Sanderson concluded his judgement with the following statement: “In cases such as this, it is usual for all of the costs of the parties to be paid out of the estate.”

This is not the first time Master Sanderson has criticized DIY-ers.

 In July 2016, Master Sanderson famously said in Rogers vs Rogers Young [2016 WASC 208] that:

 “On numerous occasions, when dealing with so called homemade wills, I have observed they are a curse. Homemade wills, which utilise what is sometimes known as a ‘will kit’ are not much better.  This case proves the point….   If the will had been drafted by a competent legal practitioner, this problem would not have arisen, and the parties would have been spared a great deal of trouble and expense.”

In our view, there is no estate value, threshold or family dynamics where a DIY Will should be used. We frequently see the traumatic impact that can result from homemade Wills, so even if you think your affairs or your wishes are ‘very simple’, a DIY Will should still not be used.

Putting things in perspective, it is a relatively modest amount to engage a lawyer to prepare your Will, considering your assets may be worth hundreds of thousands (or possibly millions) of dollars!

Arguably, a homemade Will is at greater risk of being challenged on a number of grounds. For example, a Will written by an elderly couple, at home at their kitchen table, and perhaps witnessed by close friends, may (depending on the circumstances) raise a number of questions.  Such questions may range from issues of testamentary capacity, undue influence and unconscionable conduct.

Further, the Will drafter may make errors if they fail to understand the legal requirements and the implications of their words. They may also fail to appreciate the importance of various legal drafting conventions and the execution requirements of a Will.

However, when you engage a competent Lawyer (who follows professional standards of conduct), not only will you receive invaluable advice about your particular circumstances, but the Will is likely to be less vulnerable to such criticisms.

You have probably thought to take some steps to provide for your loved ones after your death.  And if you happen to be an avid DIY-er, you may have naturally assumed you that can also write your own Will.  However, as the Supreme Court has noted:

 It is invariably the case that money spent on having a Will professionally drafted is a sound investment.”

We, Shirley and Emily, have frequently seen the pitfalls of DIY Wills. No doubt you hate the thought of your children having to deal with a Supreme Court decision after your death. We can assist you to prevent this from happening.

Please contact us on (08) 9445-2686 or contact us via our website www.bespokewillsandestates.com.au

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What happens to your Superannuation when you die?

You would assume it is a part of your estate, correct? However, that is not the case.

Grab a cuppa and let us take you through the ins and outs to ensure your superannuation lands into the hands of those you desire.

Superannuation can be a major asset for many Australians. It is therefore essential that in preparing your Will and other end-of-life documents, that you take into consideration your superannuation.

As you are no doubt aware, there are a large variety of superannuation funds, each with their own rules which must be adhered to.  Each retail fund, industry fund and Self-Managed Superannuation Funds (SMSF) generally will have its own Trust Deed and/or rules that must be adhered to.

When you die, your superannuation fund does not automatically form part of your estate. Did you catch that? Your superannuation does not automatically become a part of your estate. Furthermore, it may also be that your superannuation fund does not end up going to your preferred beneficiaries. This may come as a shock to you.

All Superannuation funds are held on trust and like all trusts, are not assets of your estate. This is why you need to take action and implement the right steps to attain your desired outcome.

You may think you can use your Will to direct the actions of a trustee of your superannuation fund. This is not the case.  Most superannuation funds require you to nominate a beneficiary using the fund’s prescribed forms. This allows you to make either a binding or a non-binding death nomination.  If you are not sure what is a binding or a non-binding death nomination (and the difference between them), keep on reading and we will explain them for you.

Binding Death Benefit Nominations

A binding death benefit nomination (BDBN) directs the Trustee of your superannuation fund about where you want your superannuation to go after you die. If you make a BDBN, the Trustee is obliged to follow the nomination, provided the beneficiary you nominate qualifies as a superannuation beneficiary, and, the Trustee considers the BDBN to be valid. A valid BDBN normally requires strict witnessing requirements and is required to be updated every 3 years.

Great care must be taken to ensure that the BDBN is carefully prepared and signed so that it fits within the superannuation fund’s Trust Deed and/or. This is particularly important in SMSFs where the preparation of inadequate BDBNs has resulted in significant failures and costly litigation in recent years.

If you have a SMSF, there are generally also issues relating to Trustee and Membership control which require careful and regular attention as part of any estate planning process.

Non-binding Death Benefit Nominations

If you make a non-binding death benefit nomination, the Trustee of your superannuation fund should take your wishes into account, but the Trustee is not legally obliged to follow them. The Trustee of the superannuation fund will have discretion as to where the proceeds of your superannuation are paid (based on your wishes, the needs of your dependants, the terms of the deed governing the superannuation fund and the law).

Obviously, the Trustee cannot pay your superannuation fund to just any person.  However, if you have a made a non-binding death nomination, you should be aware that the Trustee may distribute your superannuation proceeds to a different beneficiary.

Who can receive my Superannuation after I die?

As above, only certain beneficiaries qualify as superannuation beneficiaries. According to the SIS Act, Superannuation beneficiaries must be paid to:

  • your legal personal representative (ie. the executor); or
  • a “dependant”

A “dependant” refers to your spouse (including a de-facto partner and/or a same sex partner), your child (of any age, including in certain circumstances a step-child) and those in an “interdependency” relationship with you. An “interdependency” relationship might include a situation where you have:

  • a close personal relationship;
  • you live together;
  • one or more of you provide financial support to the other; and
  • one or more of you provides the other with domestic support and personal care.

Even if your relationship does not satisfy all the above criteria, if one or more of you suffers from an intellectual, physical or psychiatric disability, a relationship of “interdependency” may still exist, so you should obtain further advice if you are considering this issue.

If you do not have any dependants, the trustee of your superannuation fund will direct those funds to your estate.

If the Trustee decides to pay your superannuation funds to your estate, and you do not have a Will, your estate affairs will be complex.  As a result, your loved ones will most likely need to engage a Lawyer and your estate will likely incur higher legal fees – adding stress on family and friends during stages of grief, it can be rather unpleasant.

This highlights the importance of estate planning and why you should invest the time to seek legal advice to ensure your affairs are in order. Contact us via our website or call us on 08 9445 2686 if you have an enquiry and we will get back to you. We can discuss your situation and what legal services would be beneficial to you.

 

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Never too young to make a Will

You might think you are too young to make a Will, or perhaps you just have not had time. Well, if you are over 18, you are not too young to make a Will, and everyone should make it a priority.

If you die without a Will, it is not the case (as many believe) that your estate will “go to the government’’. Rather, your estate will be dealt with according to a legal formula outlined in the Administration Act 1903 (WA).

Determining who is to benefit from your estate, and who is entitled to make the application for ‘Letters of Administration’ can be complicated and time consuming. Further, the statutory formula can often be very different from the way most people would leave their estate, if they had made a Will.

This is particularly the case if you leave young children behind. Your children are likely to inherit part of your estate, along with your spouse, if you have them.  However, if your children are under 18, the complications become very significant. There will be a need for someone to act as a surety, who will guarantee that they will make good any financial loss that a minor beneficiary might suffer, as a result of the applicant’s actions.

In our experience, finding a person willing to act as a surety can be very difficult. Further, your spouse’s access to funds might be severely curtailed as a result of a large part of your estate being held in trust (possibly for years) for your children.

If you are single without any children, your estate is likely to go to your parents and/or siblings. You might be happy with that, but you might prefer a friend or a charity to receive your hard-earned assets, rather than your brothers or sisters (who perhaps in your view don’t really need it!).

Blended families, children with disabilities or personal difficulties, and estrangements within families are all things that require particular consideration.

Shirley and Emily are familiar with the many varieties of issues which can arise in this area, and are happy to talk with you about them.

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When should you update your Will?

Do you already have a Will? If so, when should you update it?

You may need to update your Will if any of the following changes have occurred to your circumstances:

  • You have married or divorced since you made your last Will: If so, you now effectively have no Will because marriage or divorce automatically revokes a Will.
  • You have started living with someone: If so, you should be aware that people who qualify as a defacto partner may be entitled to bring a claim against your estate if you do not provide for them.
  • You have had a child, or more children (via birth or adoption): Does your current Will consider all of your children? If you are unsure, you should engage a Lawyer for advice.

Other situations that may require an update of your Will are:

  • If your executor has died, become ill or incapacitated: If your Will does not provide for an alternate Executor, you should update your Will to avoid complications with your Will after your death.
  • You own a business, or have a family trust, or you have a self-managed superannuation fund: It is important to ensure your business, family trust and/or self-managed superannuation fund has the appropriate provisions in place to ensure the continuity of the entities on your death.
  • Overseas Will: If you have overseas assets or a Will from another country, you should seek legal advice about how your Australian and overseas assets can be dealt with without causing complications after your death.

If any of the above changes have occurred, and you have not updated your Will accordingly, please contact us and we will be happy to assist you.

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