Do You Have a Will?

Without wanting to be morbid, it is no surprise just how few people have an up-to-date will.

Many people have very little idea if they are ever going to need insurance like income protection or in the case of a will, know when they are going to die. It is common for those who do get diagnosed with a life threatening illness to be burdened with needing to rush out and to handle affairs such as setting up a will and addressing estate planning issues at a time when they really should be focussing on getting better and resting up under medical care.

Some frequently asked questions:

1. What is a will?

A will is a document that sets out your intentions for your assets after your death. There are significant tax savings if it is established correctly. It also provides instruction as to who is to be charged with the responsibility of carrying out your wishes, also known as your ‘executor’.

The person making a will is known as the ‘testator’, while a person entitled to benefit from a will is known as a ‘beneficiary’.

You may review and update your will at any time, however your last signed valid will is that which applies on your death.

2. How often should I update my will?

While there is no limit on the time that a will remains valid, a review every 3-4 years is recommended.

It is important that reviews are also conducted whenever your circumstances change if, for example, you decide to alter your beneficiaries or if you buy or sell an asset.

Regular reviews of your will ensure that your intentions are still accurately reflected. Some people think that making a will is something you do once and can then forget about. For most of us, nothing could be further from the truth. The only thing that can be worse than not having a will, is having a will which is no longer relevant to your circumstances.

3. Why update my will?

You should check your will regularly to see that it still reflects your wishes, responsibilities and financial position.

It can also be helpful to make a fresh will every few years as this provides a continuous record showing how your wishes and needs have changed
as your circumstances warrant. A simple will that is 30 years old, whilst technically valid, may not seem relevant to your family as, say, five wills made approximately six years apart. Recently and regularly updated wills may lend greater support to your wishes than a very old will in the event of a contest.

By regularly reviewing your will, you are actively managing your affairs and ensuring that your loved ones receive the benefit you intend for them. They will also have the comfort of knowing that you have thoughtfully considered and provided for their needs after your death, rather than leaving matters to chance.

4. What could make my will invalid?

Sometimes a will is revoked or rendered invalid by other things you do. For example, your will may be revoked if:

You marry

Marriage generally causes your existing will to be revoked.

You divorce

Depending on the State you live (or die) in, divorce can also alter the effect of your will. In Victoria, for example, your former spouse is treated as having died immediately before you for the purposes of the distribution of your estate.

These laws differ from State to State and it is vital you prepare a new will if
you marry, separate or divorce so your wishes can be carried out.

You destroy it

If you deliberately destroy your will (with the intention of revoking it) it will usually be revoked.

You make a new Will

  • If you make a new Will, previous Wills are usually revoked.
  • Your Will may be invalid if:
  • it is not signed and properly witnessed
  • you do not have ‘legal capacity’ when you make it
  • someone has exerted ‘undue influence’ over you
  • it is overturned by a court of competent jurisdiction

5. Consider who should be the executor of your will

The choice of executor is critical to ensure that obligations, legalities and family issues are handled professionally after your death.

6. Consider what powers your executor should have

  • To provide money to a guardian for any infant children for their education, shelter and maintenance.
  • To invest any part of your estate if it needs to be held until beneficiaries come of age.
  • To distribute specific assets of your estate in-kind, rather than converting them to cash before any distribution.

7. Consider the burden that you may be placing on a private executor

Make sure you have their acceptance

8. What are the key issues in choosing an executor?

The choice of executor is critical to ensure that obligations, legalities and family issues are handled professionally after your death. The executor can be responsible for:

  • Arranging your funeral.
  • Informing beneficiaries of their entitlements.
  • Liaising with family members, beneficiaries and personal contacts in relation to estate matters, business, financial and general arrangements after your death.
  • Arranging ongoing financial support for dependants (e.g. spouse and/or children) while your estate is being sorted out.
  • Collecting your assets and checking their insurance.
  • Preparing an inventory of your assets to ensure they are properly recorded and to ensure that all taxation, legal and accounting requirements are attended to.
  • Selling any assets that need to be converted to cash.
  • Obtaining Probate of your will.
  • Collecting all assets and having the executor/estate registered as owner for the period of the administration of your estate.
  • Keeping proper tax and accounting records (including Capital Gains Tax).
  • Paying your debts, taxes, testamentary and funeral expenses in proper order.
  • Keeping all beneficiaries informed as to the progress of the estate administration.
  • Handing over specific bequests.
  • Paying legacies.
  • Establishing any special trusts established by the will and distributing your residuary estate to the beneficiaries named in the will.
  • Defending and where necessary settling legal claims against your estate, such as claims by persons for provision or extra provision from the estate or claims that the will is invalid or unclear.
  • If there is potential for conflict within your family you should consider an independent trustee to ensure that your wishes are carried out with integrity and sensitivity to all parties.

What happens if I don’t have a will?

Anyone who passes away without a will is said to have died ‘intestate’. In such cases the assets belonging to the deceased are distributed according to State law. It is possible that such laws will not be consistent with your wishes and consequently those who you wish to benefit from your estate might not do so.

Things you should consider when making a will

1. Asset distribution

  • Insurance, superannuation, jointly owned assets, trust assets and company assets may or may not form part of your estate.
  • Debts owed to you – consider how they should be repaid, or whether loans you have made should be forgiven.
  • Who you wish to benefit from your will and how.
  • How you would like specific items distributed (including personal belongings), noting that chattel division can be a significant source of conflict in estate management.

2.  Who will be the guardian of any infant children

3. Whether you have any specific wishes about your funeral (Burial, cremation, religious service, etc.)

4. Whether you wish to donate any organs or other body parts after your death. Do you wish your body to be available for medical teaching purposes or alternatively for transplant purposes?

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