What is a Will?

A Will is a legal document in which you state how you want your assets to be distributed after your death. A Will also enables you to choose an Executor who will be responsible for making sure your wishes are met.

Statistics taken from ABS 2008 to 2010:

  • 54% of Australians don’t have Wills
  • 33% of Australians first marriages end in divorce
  • 60% of Australians second marriages end in divorce

Since year 2000 there has been an increase by 50% of blended and step families (Example: The Brady Bunch is a step family, because they each had their own children. But, if they had a child together, the family would be called blended).

What happens if I don’t have a Will?

If you die with assets in your name, and without a Will:

  • The division and distribution of your estate is governed by a statute, called an “intestate” law. If you are survived by a spouse and children, your estate is usually divided between your spouse and children. If you have only children (or grandchildren), the estate is divided among your children (and grandchildren). If you have neither spouse, children, nor grandchildren, the estate is distributed to your parents, brothers and sisters, grandparents, aunts and uncles, or cousins, depending on who survives you.
  • The person (or persons) who inherits your estate is usually appointed to serve as the administrator of your estate, to collect your assets and settle your estate.
  • If you have minor children who inherit from you, a court will appoint a guardian for their estates until they reach the age of eighteen.
  • If you have minor children and your husband or wife did not survive you, a court will appoint a guardian for their persons.

These laws do not always cause problems, but there are many situations in which you will want to arrange things differently by your Will.

What if I don’t want the courts to determine how my assets are split?

In order to prevent uncertainty or misunderstanding, the creation of a Will is essential as it will state who both the primary and substitute beneficiaries are, rather than allow the law to determine who they are and what they should take.

Fact:

Did you know that if you and your partner have a Will (husband, wife) and die together – and it cannot be proven who died first – then the younger partner receives the Estate and their Will is actioned accordingly. Would you be happy with this ? Has your partner satisfied your need for how the assets are split?

Can you leave specific gifts to anyone you choose?

If you wish to make gifts or leave a portion of you assets to your children, step-children, grandchildren, relatives, friends, charities or a trust, a professionally drafted Will determine the various parties’ property rights and appoint an administrator to make decisions and ensure your estate is distributed in accordance with your wishes.

Why is an administrator necessary?

It is important that you appoint an administrator rather than leave it to the court to determine who should administer your estate. Appointing an administrator yourself may prevent any complications or uncertainty for surviving relatives. If you do not appoint an administrator, any difference of opinion that cannot be resolved will exacerbate an already traumatic situation for surviving relatives and may lead to legal actions, unnecessary expenses and worse yet, irreparable rifts between family members.

What is the role of an executor?

The executor will manage many of the tasks that are involved with settling your estate such as collecting all your assets, paying off any debts that you owe, paying taxes that are owed by your estate, and distributing what remains of your assets to those people you have named in your Will.

What is the role of the trustee?

The trustee of the estate may also be the executor or may be appointed separately. The trustee is very important as they have an ongoing role for example, in cases where the children are named as beneficiaries or grandchildren stand to inherit from their parents.

What is the role of the guardian when children are involved?

Younger children require a guardian, the absence of their parents, and their wishes on this matter can also be detailed in the Will. A proposed guardian should be made aware of and consent to their inclusion as a guardian.

Many people consider using Will kits due to the cost involved in going through a solicitor to prepare their documents, is this good option?

Proper estate planning can make more money available to loved ones as you could save on taxes and probate costs, so the money saved on preparing a Will could end up costing more in the long run. However if using a Will kit is your preferred option then bear in mind that they do not offer advisory or consulting services and may not adequately cover a complex situation.

When should you update your Will?

You should update you Will regularly and if your circumstances change, for example:

  • Marriage or remarriage;
  • Divorce or separation;
  • Moving in with a partner;
  • The birth of children and grandchildren;
  • Retirement;
  • Acquiring a large asset; or
  • The loss or sale of assets disposed of by specific gift.

Assets and family situations can change significantly therefore updating your Will regularly is important to ensure that it reflects your circumstance and life position.

Fact:

Did you know that if you have a Will when single or living de facto – that your Will becomes invalid the day you get married? You need to make a new Will.

When is a Power of Attorney and Enduring Guardian required?

Powers of Attorney and Enduring Guardians can be prepared at the same time as a Will. They are prepared if a person wishes a specific person to make decisions on their behalf or manage their affairs should they suffer a mental illness or disability.

Do I need a Will if I am young?

Young people need a Will too these days, although most of them think they have “nothing to leave”, compulsory superannuation has changed that. Superannuation companies ask the parents of deceased young people to present a Will or Letters of Administration to access any superannuation owned by the deceased.

Making a Will is an important decision. There are many things to consider, and each person’s situation is unique. We have been through this process a number of times personally – as your Mortgage Brokers we have a genuine concern in making you aware how important it is to have a current Will.

Please do not hesitate to ask any questions, we would be happy to recommend Solicitors in Canberra and other State who can assist you with making a Will or updating the one you have.