Family & Relationships

Getting hitched or getting ditched - effects on Estate Planning

The impact of marriage and divorce extends far beyond parenting and property disputes.  Many Australians are unaware of the significant effect marriage and divorce have on Wills and Superannuation Death Benefit nominations (‘SDBN”), which can have serious unintended consequences if careful attention is not paid to making proper arrangements. 

Effects of Marriage on a Will

In Australia, any pre-existing Will is revoked and becomes invalid upon the marriage of the maker of the Will (also known as a testator).  This means that you will no longer have a valid Will after you marry, unless (in most States) a contrary intention is clear in the Will.  In this event, your Estate will be distributed according to intestacy rules, which can often produce a result that is substantially different from the testator’s intentions. 

Effects of Separation or Divorce on a Will

Separation does not have any effect on a Will.  Your spouse may inherit any property left to them or if named as executor, they are entitled to take up the role, regardless of your instructions.  As a result, it is crucial to consider your estate planning options early on to prevent a distribution of your Estate that does not reflect your changed personal circumstances. 

The effect of divorce on a Will differs between States and Territories.  In some jurisdictions, divorce renders the Will invalid and in others the former spouse is disqualified as Executor and any gifts left to them are revoked. 

Effect of Marriage or Divorce on Superannuation Death Benefit Nominations

Superannuation is not dealt with as an asset of your Estate and therefore will not be distributed according to your Will.  Just as you nominate beneficiaries in your Will, you must also nominate beneficiaries for your superannuation death benefits.  You have three options – a binding death benefit nomination, a non-binding death nomination, or no nomination. 

A binding SDBN lets you determine who will benefit with the greatest level of certainty.  However, your binding SDBN may become invalid after three years, or when your marital circumstances change.  This means that if you get married or divorced, you must update your SDBN. 

A non-binding SDBN identifies your preferred beneficiaries.  Ultimately, the Trustee of your superannuation fund will decide who receives your benefit.  While non-binding nominations do not need to be updated every three years, your SDBN may become invalid if you have married or divorced and you will need to update your SDBN.

How can we help?

It is essential to remember to update your Will and SDBN upon a change in marital status.  The process of doing so does not need to be difficult.  Our Family Law and Wills and Estate teams are able to provide you with comprehensive legal advice to ensure that your affairs are properly in order and your interests are protected.

Nick Ellis - Lawyer