This article is reproduced courtesy of the author LawCentral. Many of their articles are direct answers of a reader’s question – as below.
Question: My client is distraught. After finding out that her husband’s personal assistant was taking the ‘personal’ part of the job literally, they are now divorced. I am a Western Australian accountant that wants to protect my already fragile client. I hear that divorce invalidates a Will. Should she make a new Will? What happens if she fails to make a new Will?
Answer: Your client should make a Will as soon as possible.
The laws are different in Western Australia compared to the rest of Australia. In the bad old days, only marriage revoked a Will – divorce didn’t. This meant that there were unfair situations where a divorced spouse benefited from their ex-partner’s Will. All States deal with this. However, Western Australia does it differently. Under the Wills Amendment Act 2008 (WA), divorces, like marriages revoke a Will. Revocation means that the Will is now totally void. I suppose this is good because ex-spouses no longer benefit from their separated spouses – but other States do it better (see below).
What happens if your client doesn’t make a new Will?
If your client doesn’t make a new Will, then she dies without a Will – intestate. Trust me when I say that you don’t want to die intestate. It means that your estate is then administered according to the relevant state’s Administration Act. Relatives are beneficiaries in the proportions as set out by the act. This happens even if it is not what you wanted.
Worse, the evil Public Trustee is the default administrator. The Public Trustee automatically takes a percentage of your assets on your death. The greater your assets, the more you pay – even if there is no additional work. It is expensive and usually a waste of time. If you trust the government more than your family, then sure, let the Public Trustee take over. Otherwise, just appoint the beneficiaries as the executors.
What happens outside of WA?
In all other States and Territories, the Will remains valid after divorce. The only change is that the ugly spouse is removed. If your ex was an executor then they lose that job. If they were a beneficiary, the gift fails. Everything else in your Will remains the same. The integrity of the rest of the Will is intact and the document still stands. This means that the estate is distributed according to your wishes (but excluding your ex-spouse).
What is wrong with dying intestate?
You ask what is wrong with dying without a Will. Dying intestate has tax problems. You are taxed long after you die. Although death taxes were abolished by 1981, your estate is reduced by the three defacto death taxes – Income Tax, Capital Gains Tax and Stamp Duty. Failure to plan allows these hungry taxes to eat away at your estate’s value. LawCentral Platinum members can safeguard themselves by learning about:
- Three Generation Testamentary Trusts;
- Post Testamentary Trusts (Poor Man Trusts); and
- Superannuation Testamentary Trust
You can sign up for Platinum membership of LawCentral from the link below: