It’s a question I get asked a lot, and unfortunately, there is no “one size fits all” answer. So my recommendation is to have a look at your Will and associated documents once a year. I’d be surprised if you needed to update it every year (although some people do!), but if things haven’t changed too much from last year, then it might just be a matter of reading the Will, making sure that things are as they should be, and popping the Will back in a safe place.
There are some key life events which should definitely result in a review of your estate planning arrangements.
A change in your relationship status
“Single”, “married”, “in a relationship”, or “it’s complicated”? As well as updating your Facebook status, be sure to have a look at your Will:-
Marriage will invalidate a Will. It is possible to prepare a Will “in contemplation of marriage”, so that the Will continues to operate after your happy day, but if you were single when you made your Will, then getting married is a definite trigger to update your Will;
Divorce will not automatically invalidate a Will, but the operation of the Wills Act will have an effect on gifts to your former wife or husband. It’s best not to rely on the operation of the Wills Act though – check with your solicitor to make sure your Will still operates as intended;
Entering a new de facto relationship may give rights to your new partner to share in your estate. We often see arguments when someone dies resulting in expensive litigation, particularly when family members may not have known, or accepted, that a genuine relationship existed.
Contemplating retirement, or retiring
It’s time to enjoy the fruits of your labour. Right now, your financial affairs are probably as complicated as they will ever be, but that provides great opportunity to ensure that your assets are structured (in particular, your superannuation) and are passing to your beneficiaries in the most tax-effective manner.
Buying or selling property
It’s important to ensure that the property you have worked so hard to acquire is left in accordance with your wishes. Likewise, the sale of a property is a good chance to reflect on your estate planning goals.
This is when I often meet people for the first time – as they are starting to think about ‘adult’ responsibilities, and how to care for the bundle of joy which has just arrived.
Entering into business
There are a number of ways to structure a business – sole trader, pty ltd trading company, and partnership, just to name a few – and each has different estate planning consequences.
A really good idea is to put a copy of your Will with your important tax records. That way, when it comes time to do the tax return each year, you come across a copy of your Will – you read it – make sure that everything is OK – and then pop it away for another twelve months – or make an appointment to see your estate planning lawyer.