What’s the effect of marriage or divorce on a Will and superannuation? July 11, 2021

Getting hitched or getting ditched: How family law issues can affect estate planning

The impact of marriage and divorce extends far beyond parenting and property disputes.  Many Australians are unaware of the significant effect of marriage and divorce on Wills and Superannuation Death Benefit Nominations (SDBN).

What are the effects of marriage on a Will?

In Australia, when you get married, any pre-existing Will is cancelled (revoked) and becomes invalid unless the Will was made in contemplation of the marriage  If you don’t have a valid Will, your property (estate) will be distributed according to special laws known as intestacy rules. This can often produce a result that is substantially different from your intentions.

What are the 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. If they’re named as the executor of your estate, they are entitled act in this role, regardless of your instructions.  It is crucial to consider your estate planning options early to prevent a distribution of your estate that does not reflect your changed personal circumstances. It’s a good idea to seek legal advice from a wills and estates lawyer as soon as possible.

The effect of divorce on a Will differs between States and Territories.  In some jurisdictions, divorce makes the Will invalid. In Victoria, the appointment of the former spouse as an executor, trustee or guardian is revoked and any gifts left to them are revoked. It is therefore imperative that you update your Will if your circumstances change.

What is the 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 under 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 gives you the greatest level of certainty about who will benefit.  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. We recommend updating your SDBN if your marital circumstances change.

How can we help?

It is essential to update your Will and SDBN if you marry or divorce.

We can give you comprehensive legal advice to ensure that your affairs are in order and your interests are protected. Contact us today to learn more about the effect or marriage or divorce on your Will and superannuation.

This article was written by Principal, Nick Ellis.

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can receive from marshalls+dent+wilmoth and other relevant experts.