Couples leaving all of their assets to each other in their wills can create significant legal issues if the couple divorces and they don’t each update their wills.

Divorce at any age is tough. When you’re older at the time of divorce, it’s crucial that you consider how you split your assets and the implications this will have for your estate, especially if you have adult kids or a blended family.

According to the Australian Bureau of Statistics (ABS), the median age at divorce is rising for both men and women with ABS statistics showing the median age at divorce is now 42.8 for women and 45.9 for men, compared to 38.6 and 41.4 in 2000.

If you are facing a divorce or the breakup of a de-facto relationship in later life (including same sex unions) you might wish to consider the following tips to help you prepare for the changes ahead and protect your legacy.

Revisit your will

Many couples chose to leave all of their assets to each other in their wills. This can create significant legal issues if the couple divorces and they don’t each update their wills. In most Australian jurisdictions, a divorce does not automatically revoke a will, but it does revoke any clauses that mention the ex-spouse. For example, if you have appointed your ex-spouse as an Executor or Trustee, those appointments will no longer apply, and new people will need to be appointed to those roles. Similarly, any gifts that you make to an ex-spouse in your will are also revoked and you will need to re-think who you would like to benefit from your estate and update your will accordingly. These automatic revocations may mean that the will is incomplete if it is not reviewed and updated after a divorce.

For this reason, revisiting your will is one of the first and key steps in the divorce process to ensure you pass on your assets to the people you want.  A comprehensive estate planning review will also include updating the beneficiaries of assets outside your estate, such as superannuation and insurance.

A big question is whether a person should update their will before or after their divorce. There are two sides to this debate. While it’s usually a good idea to change your will before you divorce as your spouse will be entitled to your assets until your divorce is official, sometimes it’s better to wait for the official separation of assets and formal property settlement so that each party is clear on the assets that they own post-divorce. If the property settlement is taking some time, then it may be a good idea to put an interim will in place to cover the period between separation and the formal division of assets.

Once a settlement has been reached, it will be important to create or update your own will to deal with the assets that you own after the divorce and any changes to your beneficiaries as a result of the divorce.

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Put a will in place to make sure that the loves of your life are protected.

Along with the chocolates, flowers and dinners – all of which are great but fleeting traditions associated with Valentine’s Day – Australia’s leading trustee company is urging all Australians to make a more profound commitment this year – through their Will.

“There is nothing that says commitment and care like showing the people you love that you are thinking of their future and security for when you’re not there,” said Susan Bonnici, Estate Planning Solicitor at Equity Trustees.

“The best place to start is making sure you have a valid will in place which takes into account the ones you care for most – your partner or spouse, your closest friends, your family or even a charity that’s close to your heart.”

So this 14 February, while you do the traditional Valentine’s things, make the time to think about how these special people in your life would get by without you, and as unconventional as it sounds, showing how much you care by organising any provisions you’d like to make for them from your estate.

Considerations include:

1. Making sure your assets (what you own) go to the people you want them to. This includes taking into account provisions for de facto partners where you have been living together for less than two years or have no children.
2. Ensuring sentimental items which may be high in emotional meaning but not dollar value will be distributed as you intend– items such as engagement or wedding rings, war medals, or family photos. By spelling out these items, you can ensure they are not inadvertently lost or disposed of unintentionally by an executor.
3. Describing and including charities you love if you want to leave a bequest – a useful tip is to ensure that the description is inclusive enough to apply even if the charity changes its name or purpose over time.
4. Whether a trust should be created to hold and protect assets for the use of vulnerable family members – or future ones (such as grandchildren).
5. Not giving it ‘to the government’ – while it’s a myth that dying without a Will means your assets and money goes to the government, it can happen after a long and complicated process if there are no beneficiaries identified. In addition, sometimes there are tax consequences associated with some inheritances which need to be thought through.
6. Ensure your ex is out of the picture – If someone dies before a divorce is finalised, then any provisions made for their ex-partner in their Will continue to apply. The same goes for separation and if neither side have a Will in place, it’s possible that in the eyes of the law, they’re still a couple.

“None of the above might make for terribly romantic conversations – but the consequences of not working through each of them is even less so! It’s vital to get individual advice about what estate planning would work best for your circumstances and put a will in place to make sure that the loves of your life are protected, and your wishes are respected. Surely that’s one of the greatest ways to show your love to the ones closest to you this Valentine’s Day,” said Ms Bonnici.

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