If you are planning to start a new life, and maybe buy a home with your present spouse, then this time around you really need to develop an integrate plan to ensure that all the important people in your life receive their fair share of your assets after you die. That’s what modern integrated estate planning does.
In most Australian jurisdictions, divorce will invalidate all gifts to an ex-spouse under a Will. However re-marriage will automatically revoke the entire earlier Will (with only rare exceptions).
And if you don’t get around to making a new Will after you remarry, the government of the state where you die will get to decide what happens to all your assets, and this may result in unintended consequences.
Estate planning is definitely not just for the wealthy. Even those with limited assets should get their intentions down on paper before making a major financial move, such as buying a home.
In a blended family it is even more important to take specialist advice, because of the higher risk of family dispute after you’re gone. Step children and in-laws, ex-spouses and “poisoned relationships”- it’s a recipe for potential disaster, unless managed carefully.
Before you buy a home with your second spouse, you need to figure out how equity in that property will be divided upon your death. Do you want your new spouse to inherit the property in its entirety (even if they didn’t contribute much towards its purchase), or do you want to pass it on to your children.
Rod Genders, a senior estate-planning solicitor and a member of the London-based international Society of Trust & Estate Practitioners (STEP), says that people who wouldn’t dream of installing their own air conditioner or fixing their toilet, are being encouraged to DIY the most important legal documents in their lives.
This is an area where people absolutely should not attempt to create their own Wills and estate planning documents. Those who do so risk making mistakes their survivors could live to regret. This is a specialised area of law, and if you pay peanuts, you’re very likely to get monkeys.
There are a variety of tools and techniques which a lawyer specialising in estate planning will be able to suggest.
Sometimes the use of a discretionary trust can be helpful to permit assets to be controlled, but not owned, by a client who wishes to keep the assets away from gold-diggers, creditors, litigators, estranged step-children etc.
Financial products such as Superannuation and life insurance can have nominated beneficiaries placed upon them, thus bypassing the deceased estate.
Similarly, assets can be jointly-owned, thus passing by right of survivorship rather than necessarily through deceased estate.
Blended families are increasingly common, and account for an increasing amount of estate litigation. Disappointed beneficiaries are more-than-ever prepared to litigate to claim what they consider to be their rightful share of an estate.
Don’t make the mistake of putting this off. If you fail to plan, you really are planning to fail – but it will be your loved ones who suffer the pain and bear the enormous costs of trying to repair your mistakes.
Rod Genders is a senior Australian lawyer specialising in accident compensation and estate planning in Adelaide. His boutique specialist law firm is one of the oldest and most respected in Australia – visit it at www.genders.com.au . Rod is also a prolific author and speaker. Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Asset Protection and Retirement Planning may be found at www.genders.com.au/adelaide-lawyer-blog.