It is advisable that you should change your Will not less than every 5 years. It is most important that your Will is an accurate reflection of your testamentary wishes.
As your cirmcumstances change you need to consider your will.
If you are getting:
- starting a family,
- have become a grandparent or
- have disposed of some assets
you need to update your will to reflect your wishes in the changed circumstances and know that your will is legally valid.
There are many other circumstances when it is appropriate to change or amend your Will. For example, your Will may be revoked by legislation without you even knowing it. In most jurisdictions, divorce from a spouse will have the effect of revoking a will where the spouse was nominated as sole executor and beneficiary. In most jurisdictions, marriage or a civil partnership will also revoke a will.
It is common for people to give specific assets to specific beneficiaries. A testator may wish to do this for a variety of reasons, for example if the beneficiary has a personal interest in a particular asset. However, gifting assets (rather than a share in your estate) can be hazardous if you part with possession of a particular asset, and you also should ensure that you have legal ownership of it in the first place. Your Will must be updated if you sell any asset that is specifically named in your Will as a gift. The reason for this is because it may change the order in which your estate is distributed, and the shares that your beneficiaries will receive.
For example, let’s say Paul’s Will states the following:
- I give my house at 1 Smith Street in Canberra to my daughter Jane.
- I give my unit at 2/41 Ocean Drive in Manly to my son John.
- I give the residue of my estate to my children Jane and John equally.
If the property at Smith Street and the property at Ocean Drive were of equal value (that is $500,000 each) and there is $100,000 in the remainder of estate, then if Paul sells his Canberra property (and forgets to change his Will) and then dies, Jane will receive only $50,000 where John gets $550,000.
Also consider the situation where Paul owns the Canberra property with his ex-wife as joint tenants without realising, because the ownership was not changed after his divorce – upon his death the Canberra property will transfer absolutely to his ex-wife, and again Jane will miss out.
Therefore, it is important to consider any inequalities that may eventuate within your current Will. A distribution such as that referred to above (where Jane receives $50,000 and John receives $550,000) will leave the door open for Jane to contest the Will and claim a greater amount of money which could lead to family disputes.
Codicils used to be a quick, easy and inexpensive way of making amendments to your Will. However extreme caution should be used when using codicils. Because a codicil is a separate document to your Will, it may be easily misplaced or forgotten when your trustees go to administer your estate. With the aid of modern document producing technology, it is much easier now to draft a new Will. You should give consideration to having a new Will drafted if you currently have a Will and codicil combination.
We recommend amending your will where there has been a death, birth, marriage, divorce or change in financial circumstances (such as the acquisition of assets). elringtons can assist in advising you on all of your estate planning needs.
For more information please contact our Wills and Estate Team:
e: firstname.lastname@example.org | p: 02 6206 1300