What happens to a testator's Will after divorce
Going through a divorce may upset the best laid out estate plans by partially or completely revoking a couple’s Wills.
Jennifer and Thomas were married for 5 years before Jennifer filed for divorce earlier this year. They have 2 children under the age of 10 and previously executed a Will appointing each other as the executor, trustee and sole beneficiary of their estate. In the event that their spouse does not survive them, the estate was to be split equally among testamentary discretionary trusts set up for each of their children.
What does the end of the relationship mean for their respective estate plan?
The rules surrounding what happens to someone’s Will in the event of a legal breakdown of their relationship (whether divorce or annulment) differ from State to State, with the provisions in one particular State being more drastic than the others.
If the Wills had been made in New South Wales, Victoria, Queensland or the Northern Territory, Jennifer’s Will (for example) would operate as if Thomas had-predeceased her, which means that the gift to and appointment of Thomas as executor, trustee or guardian would be ineffective (subject to a couple of exceptions). The exceptions are provisions in the Will which, broadly speaking are an appointment or grant of a power of appointment exercisable by Thomas in favour of beneficiaries which include Thomas’ children. These would remain unaffected.
The above applies not only to the termination of a marriage but also to the termination of a civil union or civil partnership in the Australian Capital Territory, a registered relationship in South Australia as well as the revocation of a deed of relationship in Tasmania.
But what if Jennifer’s Will was governed by the laws of Western Australia? The rules in Western Australia are quite harsh as they treat the whole of Jennifer’s Will as being revoked upon the termination of her marriage (instead of the revocation being limited to gifts or appointments in favour of her spouse as in the other jurisdictions). The implication of this is that Jennifer would die intestate and the intestacy laws of Western Australia would apply, thereby losing the benefit of testamentary trusts set up for the children or any charitable gifts she may have made. The revocation would occur even if her Will only contained gifts and appointments unrelated to Thomas.
There are two ways for Jennifer to avoid the application of these rules. The first is by demonstrating a contrary intention in the Will. In certain States and Territories, such an intention may be evidenced by means other than the Will to the satisfaction of the Court.
Alternatively, the revocation provisions will not apply in the Australian Capital Territory, Western Australia and South Australia if Jennifer re-affirms or republishes her Will, either by re-executing the document (in accordance with the requirements of a formal Will) or by way of a codicil.
In any case, while the revocation provisions provide a temporary safety net while the testator is going through a stressful period, we strongly recommend that an updated Will (and ancillary documents such as enduring power of attorney and enduring power of guardianship) be prepared and signed implementing the revised estate plan for the individual to ensure these reflect the testator’s current wishes and strategy.
You might also like ...
- 'Ding-Dong the Witch Is Dead': Development of property in an SMSF with an LRBA after the 2019 Federal Election
- Life's too serious
- Selling a property bought with a limited recourse loan
- The Chance to Resign - a Poison Chalice in Dismissal Claims
- Team-playing: Issues when an SMSF owns only part of a property