Marriage, separation and divorce have significant legal consequences for your Will and estate plan in NSW. While your Will and estate plan may not be front of mind during these major life changes, it is important that you promptly receive legal advice to ensure your Will and estate plan is appropriate to your changed circumstances.

Marriage

Under section 12 of the Succession Act 2006 (NSW), your Will is automatically revoked when you get married. An exception to this rule applies if the Will specifies that it is made in contemplation of marriage.

Despite the general rule that marriage revokes a Will, certain provisions in your Will regarding your spouse will not be revoked if you remain married to your spouse at the time of your death. This includes:

• Gifts made in your Will to your spouse
• The appointment of your spouse as executor

Except for the above exceptions, the rest of your Will is automatically revoked by your marriage. This means the balance of your estate (not given away to your spouse) would be dealt with under the statutory rules of intestacy, which may result in that part of your estate being distributed in a way you do not want. It may also in some circumstances increase the chance of expensive disputes in respect of your estate.

The automatic revocation of a Will by marriage is particularly relevant in the case of second and subsequent marriages and blended families. For example, imagine the following hypothetical scenario:

You have two children from your first marriage which ended in divorce. After your divorce, you make a Will making substantial provision to your two children. The Will is not expressed to be made in contemplation of marriage. You subsequently marry a new partner with whom you purchase a home in equal shares as joint tenants. Shortly after your new marriage, you unexpectedly die without having made a new Will.

What happens in this scenario?

• You die without a valid Will as it was revoked on your marriage. Therefore, the statutory rules of intestacy applies to the distribution of your estate.
• Your home would not form part of your estate as your new spouse would automatically become the sole owner after your death by reason of the rule of survivorship. You can read more about the rule of survivorship and joint ownership in this article on joint ownership.
• In addition to your home, your new spouse will receive a statutory legacy of approximately $590,000, and all your personal effects (e.g. jewellery, electronics, furniture, artwork, etc), and half of whatever remains in your estate. The statutory legacy as at the time of writing is approximately $590,000 however it is indexed.
• Your two children will only be entitled to half of whatever is left in your estate after the legacy is paid to your spouse. If your estate is worth less than the amount of the statutory legacy, your new spouse will receive the whole of your estate and your children would receive nothing.
• Your funeral and probate expenses, and debts and liabilities of the estate (e.g. credit card debt) are paid out of your estate before the calculation of your new spouse’s entitlement to the statutory legacy. That is, the spouse’s statutory legacy is ‘protected’ from these estate expenses, while your children’s half share in the rest and residue of the estate is not.

In this hypothetical scenario, while you had intended to leave a Will leaving substantial provision to your two children from your previous marriage, your failure to make a new Will after your new marriage would have the result that your children would be left with substantially less, or nothing, from your estate after you die.

This is just one example of what can go wrong. It is recommended that you receive legal advice after marriage to review your estate plan to ensure it remains appropriate to your circumstances.

Separation

A mere separation from your spouse does not have any legal effect on your Will or estate plan. This means that any provision made to your spouse in your Will and any appointment as executor or guardian will remain effective at law even though you are separated. If you were married, certain provisions in your Will will only be revoked after your divorce has been finalised (read more below).

Divorce or annulment

Under section 13 of the Succession Act 2006 (NSW), your divorce or annulment of marriage does not revoke the whole of your Will.  Only some (but not all) specific provisions relating to your former spouse are revoked, but the Will otherwise remains effective unless you make a new will revoking your old Will.

The parts of your Will which are revoked on your divorce includes any gift made to your former spouse, and the appointment of your former spouse as executor, unless your will specifies that you do not want divorce to have this result.

On the other hand, your divorce (or annulment of marriage) will not cancel the appointment in your Will of your former spouse as trustee (or appointor) in respect of trusts which include children of your former spouse as beneficiaries.

It is important to note that the mere filing of an application for divorce, does not trigger section 13 of the Succession Act. The provisions of section 13 of the Succession Act only take effect when the Court has made orders finalising your divorce because this is what formally brings the marriage to an end, even if you may have emotionally ‘checked-out’ of the marriage long ago. Similarly, Court orders in respect of property or parenting matters are to be distinguised from a divorce order.

Superannuation Binding Death Benefit Nomination

Another important consideration that can sometimes be overlooked is the need to update your Superannuation Binding Death Benefit Nomination after the breakdown of a relationship. If you die before updating your Superannuation Binding Death Benefit Nomination, there is a risk that your Super Fund will pay the whole or part of your superannuation to your former partner.

Your superannuation does not automatically form part of your estate. Accordingly, merely updating your Will after a new marriage or after the breakdown of a relationship will not fix the issue of the potential for your Superannuation to be paid to your former partner after your death as that nomination is separate to your Will. As some Superannuation Death Benefit Nominations lapse after a period of three years (or sooner), it is best practice to regularly review your latest nomination form even if you are not going through a breakdown in relationship.

Other Estate Planning Documents

You should also consider any appointments you have made of your former spouse as Attorney under a Power of Attorney, or Guardian under an Appointment of Enduring Guardian. These documents are not revoked by marriage, separation or divorce. There are specific requirements to validly revoke these appointments, so it is best to obtain legal advice to ensure any revocation of these appointments is effective.

Family Provision Claims By Former Spouses

Under section 51(1)(d) of the Succession Act 2006 (NSW), a former spouse (including a former de-facto spouse) is an eligible person who can make a family provision claim on your estate after you have died.

Unlike other classes of eligible persons, former spouses are required to show that there are factors which warrant the making of their application for further provision from the estate. The term “factors warranting the making of an application” is not defined in the Succession Act and has been described as “enigmatic” (see Wilcox v Wilcox [2012] NSWSC 1138 at [16]). In general terms, to be successful in a family provision claim, a former partner must show that by community standards the deceased person should have regarded the former partner as an “object of testamentary recognition”.

One of the factors the Court might consider as to whether there are “factors warranting the making of the application” is whether your former partner and you have had a formal financial/property settlement following the breakdown of your relationship. However, the mere fact that you have had a financial settlement does not preclude the former partner’s application for provision and each case will depend on its own circumstances.

Section 95 Releases

After the breakdown of a marriage, each respective party often signs a Deed of Release by which each party releases their rights to make a family provision claim against the estate of the other (sometimes referred to as a “Section 95 release”).

However, the Section 95 release is not effective unless approved by the Supreme Court of NSW pursuant to section 95 of the Succession Act 2006 (NSW). Often, parties do not seek Court approval of the Section 95 Release at the time it is signed and only seek Court approval of the release if a family provision claim is made.

A party seeking to obtain the benefit of a Section 95 release should carefully consider the provisions in that section of the Act when preparing the Deed of Release, and should not assume that the Court will “rubber stamp” a Section 95 Release. The Court may have regard to all the circumstances in deciding whether to approve a Section 95 release, including whether the agreement to release the person’s rights was fair and reasonable, and whether the parties had independent legal advice.

For assistance with any aspect of your estate planning, please contact our office on (02) 9698 9160. Gattuso Legal is a legal practice in the Inner West of Sydney with experience in estate planning and succession law. 

The information in this article is a general overview and for educational purposes only. Each situation is unique and professional legal advice should be sought for specific circumstances. Refer to our website terms of use for further details.