How grey divorce impacts your estate planning: What to update now

Divorce at any age can be a major life upheaval, but when it occurs later in life — often referred to as a “grey divorce” — the financial and legal implications can be even more significant. After decades of shared life, assets, and goals, untangling everything in your 60s or beyond can be emotionally and practically challenging. One critical area that is often overlooked during grey divorce is estate planning.

Many people assume that once their will or superannuation nomination is in place, it’s set for life. Unfortunately, this is not the case — especially after a major life event like divorce. Failing to review and update your estate planning documents can result in unintended consequences, including your ex-partner receiving benefits you no longer wish them to have, or your medical decisions being left in the hands of someone no longer close to you.

If you’re navigating divorce later in life, it’s essential to revisit and revise your estate plan to reflect your new circumstances. Ella Hickman, principal at Hickman Family Lawyers in Perth, breaks down the key documents and legal arrangements you should review and potentially update as part of your post-divorce planning.

How Grey Divorce Impacts Your Estate Planning

For older Australians, estate planning goes beyond simply drafting a basic will. It includes setting up powers of attorney, ensuring medical directives are accurate, nominating superannuation and life insurance beneficiaries, and reviewing trust structures and property ownership.

After a grey divorce, each of these components may need to be reconsidered to ensure your assets are protected, your wishes are honoured, and your dependents are cared for appropriately. Here’s a closer look at each area that may need your attention when it comes to grey divorce and estate planning.

Will

Your will is often the most recognisable part of your estate plan — and arguably the most important. If your current will names your former spouse as a primary beneficiary or executor, you may want to change this. In some Australian states, divorce will automatically revoke parts of a will that relate to your former spouse, but this is not uniform across the country and does not always apply to separated couples who haven’t finalised their divorce.

Updating your will ensures that your estate is distributed in line with your current wishes. You might now want to leave assets to your children, grandchildren, or a new partner. Additionally, you’ll need to reconsider who will be responsible for administering your estate, as this role (the executor) carries significant responsibilities. Choosing someone trustworthy and aligned with your interests is critical.

It’s also an opportunity to consider any specific bequests — such as family heirlooms, charitable donations, or gifts to friends or carers — that reflect your changed priorities post-divorce. Making these changes formally and with legal guidance can help avoid potential disputes and ensure clarity for your loved ones.

Power Of Attorney

A power of attorney allows someone to make legal and financial decisions on your behalf if you become unable to do so. Many people appoint their spouse to this role, but after divorce, it’s important to reconsider who should now have this authority.

If your former spouse remains your nominated power of attorney, they may still be able to manage your bank accounts, sell your property, or make other major decisions on your behalf.

You might choose to appoint an adult child, a trusted friend, or a professional advisor. Whoever you choose, it should be someone who understands your values, financial priorities, and long-term wishes. It’s also wise to appoint a backup or alternate person in case your primary choice is unavailable when needed.

Updating your power of attorney document after divorce is not only a matter of protecting your finances — it’s about ensuring your autonomy, care, and peace of mind in later life.

Medical Directive

Also known as an advance health directive or living will, this document outlines your preferences for medical treatment in the event you’re unable to communicate them. It often includes your wishes around resuscitation, life-sustaining treatment, pain relief, and organ donation.

After a grey divorce, it’s important to review who is listed as your medical decision-maker. If your ex- spouse is still named, they may have legal authority over critical healthcare decisions — even if your personal relationship has legally ended.

Updating this directive ensures that someone you trust is empowered to carry out your medical wishes. It also gives you a chance to revisit those wishes themselves. People’s perspectives on medical treatment and end-of-life care can change with time and experience, and divorce is a good prompt to reflect on what matters most to you.

As part of the update, make sure your chosen representative knows your preferences and is willing and able to advocate for you. And ensure your medical directive is legally valid and accessible to healthcare providers when needed.

Superannuation Nomination

Superannuation is often one of the largest assets Australians hold — especially in retirement. What many don’t realise is that your superannuation does not automatically form part of your estate.

Instead, it is usually distributed according to the nomination you have made with your fund. If your former spouse is still listed as the beneficiary on your super, they could receive a substantial payout upon your death, regardless of what your will says. That’s why it’s essential to review and update your binding nomination as soon as possible after divorce.

You can typically nominate a dependent (such as a child) or your legal personal representative (who will then distribute it according to your will). The type of nomination — binding or non-binding — also matters. Binding nominations provide greater certainty, but they usually need to be renewed every three years to remain valid.

Given the financial stakes involved, it’s worth seeking advice on how best to structure your superannuation nomination post-divorce.

Life Insurance Beneficiaries

Like superannuation, life insurance is often paid directly to the nominated beneficiary, bypassing your estate entirely. This means that even if you’ve updated your will, an outdated life insurance nomination could result in your ex-spouse receiving the payout if they are still named as a beneficiary.

Take time to review any life insurance policies you hold and update the beneficiaries accordingly. This could be your children, other family members, or your estate if you want the funds distributed according to your will.

It’s also wise to review the amount of cover you have. If your financial obligations have changed post-divorce — for example, you no longer need to provide for a partner — you may want to adjust the policy value, or reconsider whether you need the policy at all. Please consult a trusted financial advisor when making these decisions.

Ensure you notify your insurer in writing of any changes and keep a record for your own files.

Trusts

Trusts are commonly used in estate planning to manage assets for the benefit of others. If you and your former spouse established a family trust, you’ll need to carefully consider how your divorce affects the structure and operation of that trust.

You may no longer wish to have your ex involved as a trustee or beneficiary. In some cases, it may be necessary to restructure or even wind up the trust, depending on its terms and the financial settlement agreed upon during the divorce.

It’s also important to consider whether you want to create a new trust for your children or grandchildren, particularly if your financial priorities have shifted. Trusts can be complex and require careful planning, especially in the context of divorce and tax implications, so professional legal and financial advice is essential.

Making the necessary changes to existing trusts — or establishing new ones — helps ensure your assets are protected and distributed in line with your updated intentions.

Property Ownership

Property is often one of the most complex and emotionally charged aspects of a grey divorce. Beyond the division of real estate as part of the financial settlement, it’s vital to ensure that property ownership records are updated correctly.

If you previously owned property jointly with your spouse, this typically means that ownership automatically passes to the other party upon death — regardless of your will. After divorce, many people change the ownership structure to tenants in common, which allows each person to leave their share to someone of their choosing.

You should also review any titles, mortgages, or caveats to make sure your interests are properly protected. In some cases, refinancing or selling may be necessary, especially if retaining the home is no longer financially viable or aligned with your future goals. Ultimately, clear and up-to-date property arrangements will help avoid disputes, ensure your wishes are followed, and give you peace of mind as you move forward.

Grey divorce can bring a fresh start in many ways, but it also brings the need to take stock of your legal and financial affairs — especially your estate planning. Outdated documents can leave you vulnerable or result in unintended consequences for your loved ones.

By reviewing your will, powers of attorney, superannuation, insurance, trusts, and property arrangements, you can ensure your affairs are aligned with your current values and relationships.

Importantly, seek guidance from both a family lawyer and an estate planning lawyer who understands the complexities involved in later-life divorce. With the right legal and financial advice, you can move forward with clarity, control, and confidence.