The recent legalisation of same-sex marriage in Australia, serves as a good opportunity to remind ALL people contemplating marriage about the implications of marriage, and divorce, on their succession planning. It is important that couples consider the effect of their marriage on their estate planning documents and update them accordingly.
In all Australian states and territories, marriage revokes a Will that is made prior to marriage.
If a new Will is not created once married, at the time the person passes away, they will be deemed as not having made a Will. This means that the person’s assets will be distributed in accordance with legislation, possibly in a manner that was not intended by the deceased person.
Exception to the general rule
An exception to the revocation of a Will upon marriage applies where the person made the original Will in contemplation of marriage. The application of this exception differs across the states and territories.
|Victoria, New South Wales, Tasmania, Queensland, Northern Territory||Western Australia, South Australia, ACT|
|The exception applies where a Will is made, expressly or impliedly, in contemplation of marriage to a named person, or of marriage generally.||The exception will apply where a Will is made in contemplation of marriage to a named person.|
To do this, a Will needs to specifically state that the will maker is making the Will in contemplation of marriage to their partner.
Overseas marriages now recognised, but Wills need to be revised
Same-sex couples who have married overseas in accordance with the marriage laws of those countries will now have their marriages recognised under Australian law. If you or your spouse made a Will before the new Australian laws came into effect, it is possible that those Wills are now invalid.
But what about divorce?
Divorce affects your Will in different ways depending on which state or territory you are in.
|Victoria, New South Wales, Tasmania, Queensland, Northern Territory, South Australia, ACT||Western Australia|
|Unless a contrary intention is expressed in the Will, on divorce, the following will be revoked:
||Divorce revokes a Will unless a contrary intention is expressed in the Will or other evidence exists to prove such an intention.|
Importantly, separation does not affect a Will. If the Will is not updated on separation and the testator dies, then their existing Will remains valid. Therefore, it is important to ensure that all estate and succession planning documents are updated to reflect any changes in circumstance, as they arise.
Not all of your assets are necessarily covered by your Will.
Marriage is unlikely to affect a nomination for superannuation purposes. If a person has nominated their (unmarried) spouse as their beneficiary, then that nomination will stand when those persons are married. A beneficiary is a person who is nominated to receive the superannuation benefits (death benefit) on your death. Generally, your beneficiary or beneficiaries must be a dependant. Dependants can include your current spouse or partner, your children or any other person who is financially dependent on you or in an interdependent relationship with you.
If you have not nominated a person prior to your marriage, then marriage provides a sensible time to review these arrangements.
Powers of Attorney
Consider making arrangements to appoint a substitute decision maker. For example, appointing a person under an enduring power of attorney to make financial and personal decisions on your behalf if you become legally incapacitated.
The effect of marriage and divorce on substitute decision making appointments differs depending on which state or territory you are in. For example, in Victoria, separation or divorce does not automatically revoke an existing or enduring power of attorney. By contrast, in Queensland, if you divorce, the power of attorney is revoked to the extent that it gives power to your former spouse.
Asset protection strategies
Binding financial agreements are similar to pre-nuptial agreements, in that a couple can use them to set out how their property and other assets would be divided if they were to separate. Couples can also use a binding financial agreement to deal with issues such as spousal maintenance.
Seek specialist family law advice before entering into binding financial agreements.