How Does Divorce Affect a Will? (Vic)

In Australia, divorce has significant implications for estate planning. When a couple divorce, it can automatically alter their wills, particularly those provisions that relate to their former spouse. Each state and territory in Australia have specific legislation that pertains to wills and estates. It is important that anyone contemplating divorce understands the impact that it can have on their estate planning. This article explains the effect of divorce on a will in Victoria, along with practical steps to manage estate planning during and after divorce.

The legal framework

In Victoria, the Wills Act 1997 dictates the impact that divorce has on the validity of a will. Under this Act, divorce does not revoke a testator’s entire will. Rather, it alters the operation of specific provisions related to the former spouse. Provisions in the will that do not involve the former spouse, such as gifts to children, friends, and charities, remain unaffected by divorce.

Section 14 of the Act establishes the affects that divorce have on a will, in that it invalidates provisions that:

• appoint the former spouse as an executor, trustee, or guardian. As such, the former spouse can no longer administer the estate or manage assets on behalf of beneficiaries. If the will does not name a substitute executor or trustee, this can lead to complications, as the court may need to appoint an administrator;
• gift property or assets to the former spouse. These assets typically revert to the estate and are distributed to the residuary beneficiaries or according to the rules of intestacy if no valid residuary clause exists.

In effect, when a couple divorce in Victoria, the testator’s former spouse is treated as though they predeceased the will-maker for these specific provisions. The only exception is if the wording of the will explicitly states that the appointment or gift is not revoked upon the ending of the marriage.

Joint tenancies

Real estate held in joint tenancy passes automatically to the surviving joint tenant upon death, regardless of the terms of the will, and irrespective of an intervening divorce. As such, after divorce, it is advisable to either dispose of all property and share the proceeds appropriately, or if the property is being retained, sever the joint tenancy and convert the ownership to tenants in common. As tenants in common, the former spouses will each be able to control the distribution of their share of the property through the terms of their individual wills.

Family provision claims

Divorce does not necessarily prevent a former spouse from making a family provision claim against the estate under Part IV of the Administration and Probate Act 1958. A former spouse can argue that they were dependent on the deceased or had a financial relationship that entitles them to a share of the estate, particularly if the deceased had ongoing financial obligations toward them. An example of this would be if the deceased was obliged to pay ongoing spousal maintenance. The success of such a claim depends on various factors, including:

• the financial position of the former spouse;
• the size and distribution of the estate; and
• the nature of the relationship and any prior agreements, such as Binding Financial Agreements (BFA) or court orders.

Intestacy and divorce

If a divorced person dies intestate (without a valid will), their former spouse is not entitled to inherit under Victoria’s intestacy laws. The Administration and Probate Act 1958 stipulates that intestate estates are distributed to surviving family members such as children, parents, and siblings, bypassing the former spouse.

Separation

However, it is important to note that separation (living apart from a spouse without finalising a divorce) does not preclude a spouse from inheriting under intestacy laws. In fact, separation does not have any automatic legal effect on a will. Until a divorce is finalised, testamentary provisions in favour of an estranged spouse remain valid. This can lead to unintended consequences if the will-maker dies before the divorce is granted, as the estranged spouse may inherit under the terms of the will. To mitigate this risk, testators should review and update their will as soon as they determine that a separation is permanent, rather than waiting until a divorce process is complete.

Remarriage

Unlike divorce, remarriage revokes a testator’s entire will unless the will explicitly states it was made in contemplation of the remarriage. This distinction highlights the importance of updating estate plans after significant life events.

Practical steps

To ensure that a will accurately reflects a person’s intentions following divorce, the testator should create a new will or amend the existing one to reflect their new circumstances. This ensures that new executors, guardians and trustees are appointed, that the former spouse is explicitly excluded, and that gifts and distributions align with the will-maker’s current wishes.

As divorce does not automatically revoke a power of attorney or enduring power of attorney granted to a former spouse, it is also crucial to revoke these documents and appoint a new attorney to manage financial, medical, or personal matters if circumstances have changed. Divorce also may not automatically revoke a former spouse’s nomination as a superannuation beneficiary, so individuals should update their beneficiary nominations to avoid unintended outcomes.

Please get in touch with Go To Court Lawyers on 1300 636 846 for any legal advice.