Sometimes our best laid plans don’t follow through as we might have hoped. However, it’s another story when it comes to planning for what happens after our passing. Our ideas about how our family and loved ones will be looked after can change often during our lifetime.

Estate planning ensures that when you die, your assets can be passed promptly and tax effectively to the people you love.

There are many events that can trigger a need to review an estate plan, for instance:

• marriage — which revokes the current wills made by spouses,
• divorce — which revokes any gifts made under a will to the ex-spouse,
• change in the family such as births, deaths and marriages,
• change in relationships such as children entering or leaving de facto arrangements, and
• death of a person who plays a key part in the estate plan such as an executor or trustee.

Here are some examples of when life changed and the estate plan did not keep up.

Who gets the house?

Peter was a young executive married to Jane, a corporate lawyer. They were both busy and successful in their careers and had no children. They drifted apart and Peter started a new relationship with Sophie. They rented an apartment together and six months later were delighted to discover she was expecting their first child. Peter was finalising an important deal and would ‘get round to arranging things’ as soon as the ink had dried on the contract.

That never happened because he was killed in a car crash driving home from the office. Peter and Jane had owned their house as joint tenants meaning on his death it passed automatically to her. The trustees of Peter’s super fund split his super between Sophie and Jane. Sophie was left to raise their child on her own without the financial support Peter would have wanted.

Who controls the money?

Mike and Helen had planned their retirement meticulously including an estate plan. Their wills provided for a testamentary trust to be set up when they died. Mike’s brother agreed to be the trustee because he knew their family and understood what Mike and Helen wanted. Their intention was that the trust would support their grandchildren through their education and establishment of their lives.

Mike passed away after a brief illness and Helen followed shortly afterwards. Mike’s brother was in a nursing home and could not fulfil the trustee’s obligations. The family had to approach the courts to appoint a replacement which meant the trust may not have been administered in the way Mike and Helen would have wished.

Who supports David?

Margaret had raised three children on a tight budget since divorcing their father. She arranged her finances well and took out insurance to ensure her children could be supported if she died or could not work. Margaret’s will appointed her sister, Penny, as guardian of her children and executor of her estate.

Unfortunately, Penny was taken ill and Margaret agreed to look after her nephew David, as well as her own family. When Penny died David was left some money from her estate. When Margaret was revising her financial plans to cope with these events, her financial adviser recommended that she apply to become David’s guardian, increase her insurance cover, appoint a new guardian for the children and include David in her will.

If your family situation changes, be sure you seek professional advice to update your estate plan accordingly.