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Talking about death can be an uncomfortable experience for you and your loved ones. Especially when your last will and testament is being discussed. This conversation, however, is essential and needs to be had before it’s too late.
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- Talking about death can be an uncomfortable experience for you and your loved ones. Especially when your last will and testament is being discussed. This conversation, however, is essential and needs to be had before it’s too late.
- What Is a Last Will and Testament?
- Why Is a Last Will and Testament Important?
- Last Will and Testament: Its Origin and How It Works
- Will Contest: Questioning the Capacity of Making a Will
- Wills, Trusts, and the Power of Appointment
- What Is Probate?
- What Is Estate Planning?
- Is Will Revocation Possible?
- Last Will and Testament FAQs
- Find the right Financial Planner for you with the help of an MMS Money Buddy.
- Want to get your money sorted? Speak with a Money Buddy about your financial planning needs today!
This article includes a comprehensive discussion of a last will and testament.
It explains the importance of drafting a will and the consequences of not having one.
The article covers the different types of wills and how they work. It also serves as a guide to writing a will and understanding the other topics relating to the subject. A separate FAQ section is also included for further discussion.
What Is a Last Will and Testament?
A will is a legal document that comprises an individual’s wishes regarding their assets and beneficiaries.
The last will and testament indicates how your assets and properties are to be distributed, including the essential details of your beneficiaries. It also covers the custody of dependents, and accounts and financial interest management.
You don’t need to file your last will and testament with any government body or court system. However, you must store it in a safe place in your home where your personal representative will be able to locate it.
You may also give this document directly to your executor, lawyer, or place it in a secure deposit box.
Why Is a Last Will and Testament Important?
Creating a legal will is essential, especially for individuals with numerous assets that need to be divided among beneficiaries. Doing so will avoid any possible disputes.
Those diagnosed with a terminal illness and the elderly must also have their own will. Without a legal will your entire estate is distributed based on intestacy laws, which are explained below.
Consequences of Having No Will and Testament
One of the consequences of having no will and testament is intestacy. Intestacy happens when a will fails to deal with all of the estate’s assets accordingly. A will becomes invalid when it is unsigned, or the deceased person didn’t have the mental capacity to make a valid will before the time of their death.
Under intestacy laws, the distribution of properties is dependent on several factors. These include whether or not you had children, were in a same-sex de facto relationship (not married yet living as a couple on a genuine domestic basis), or had a surviving spouse or any other relatives.
If you passed away intestate without any relatives, your personal property will be handed over to the state.
Essential Requirements for a Last Will and Testament
When creating your own will, you must have a sound mind and the capability to comprehend the arrangements you’re making. In this case, you are called a “testator” or “will-maker.” You then choose an executor who will handle the distribution of your estate.
As a testator, you must identify yourself as the will creator and why such a document is being made. You must sign and date your own will, usually in the presence of one or more witnesses. After signing all the documents, your will must be notarised.
Other criteria for creating a legal will include:
- Content of the Will
You should declare that you nullify all previous wills and codicils (addendum to the last will) if circumstances change. Otherwise, a succeeding will revokes earlier testaments and codicils. However, if a subsequent will is contrary to the previous version, the original document is considered entirely null and void by implications.
- The Role of Legal Experts
You have the option to draft a will with the help of legal advice; use a software product or a template to create an online will; or write your own will.
When a lawyer drafts your will, it may come as part of an estate planning package. It includes other elements, such as a living trust that oversees the transfer of your assets after your death.
The advantage of hiring a lawyer to write your will is the avoidance of possible technical mistakes that could invalidate your testament.
- International Wills
The Convention of providing a Uniform Law on the Form of an International Will was concluded in 1973 in UNIDROIT (The International Institute for the Unification of Private Law).
UNIDROIT is an independent intergovernmental organisation whose purpose is to study ways to unify and modernise private and commercial law. This international will is enforced in Australia.
- Criteria for the Will to Be in Writing and Signed
Your own will must be either typed or handwritten. When signing a will, make sure you sign each page in the presence of your witnesses.
Explain clearly to them that the document you’ll sign is your last will and testament. No text must appear on the last page after your signature, aside from the witness signing area.
If it’s impossible for you to sign the document on some grounds, you may appoint someone else to sign it on your behalf. It’s better to seek legal advice from a professional at this point.
Types of a Last Will and Testament
There are four main types of wills, and the one you need depends on your specific situation.
- Simple Will
With a simple will, you get to decide who your beneficiaries will be and name a guardian for any minor children. Will templates are available online and provide an excellent framework for creating testaments.
To know the legitimacy of online will templates, make sure that these documents comply with state laws. Australian states and territories, such as Queensland, Tasmania, NSW (New South Wales), and Victoria have different requirements, so do some research first.
- Testamentary Trust Will
This type of will appoints a trustee to manage the assets you have placed in a trust for the benefit of your chosen beneficiaries.
A testamentary trust is helpful if you have minor children who can’t handle their inheritance independently. With this will, you can place your assets in a trust and include conditions on the estate, which could be gradual depending on your children’s age and other factors.
- Joint Will
A joint will (or mutual will) is when two individuals leave all of their assets to each other and then agree on what should happen to those properties if one of them dies.
Let’s say a married couple decides to have a joint will. The surviving spouse will get everything when his partner passes away. However, he’s bound to the provisions of this will since the terms are irreversible without both parties’ consent.
If the surviving spouse wishes to remarry, they’re stuck with whatever the joint will provides. When both of them die, that’s the only time their children will benefit from the assets they leave.
A mirror will permits two people to create almost identical wills that leave everything to each other. The couple will indicate in their respective wills that everything will be left to the remaining spouse.
Typically, there’s a clause stating that if the couple dies at the same time, or within 30 days apart, everything will go to their children or a named
beneficiary.
With a mirror will, you can only give away what you own and not what your partner owns. However, if a property is jointly owned with a right of survivorship, the surviving owner automatically absorbs the dying owner’s share of the property.
Whether it’s a house, a vehicle, or a bank account, any other property that is jointly owned will be absorbed by your surviving spouse.
- Living Will
A “living will” has no connection with distributing your assets at the time of your death. Instead, it lets you choose what medical treatments or healthcare options you want to have if you become incapacitated.
Through this will, you also have the option to name a personal representative to make decisions on your behalf.
If you want more than one type of will simultaneously, make sure to engage a law firm to assist you with the process.
Standard Terms Found in a Last Will
- Estate: The total net worth of an individual or the sum of their property minus any liabilities or debts they may have.
- Asset: These are things of value, such as personal property, money, and real estate property.
- Liability: These are legal or financial obligations, including credit card debts, loans, and mortgages.
- Testator: This refers to the person who created the last will and testament. In some cases, this individual may be called the decedent, will-maker, or deceased person.
- Executor: Known as a personal representative, this individual is the person who executes the last will. An executor is the one who distributes assets, manages debts, and ensures essential instructions are followed, such as child guardianship.
- Beneficiary: These are people, organisations, or charities that will receive the decedent’s estate.
- Witness: These are individuals who are present when the testator signs the last will. They help prove the legitimacy of the testator’s signature.
- Bequest: It’s a term that means to bequeath something to a beneficiary through a last will.
Last Will and Testament: Its Origin and How It Works
The history of the last will dates back thousands of years ago. According to a Greek historian named Plutarch, a written will was intended solely for men who passed away without an heir.
The process of writing a will in ancient times was similar to what we know today. Although state laws vary in the requirement, the general rule for drafting a legal will is your capacity in understanding the implications of leaving all your properties to your beneficiaries after your death.
An individual writes a will while they are still alive, and the instructions are only followed once that person dies. As previously discussed, the executor of the estate is responsible for handling the deceased person’s assets.
The probate court (the one handling cases, such as wills, estate, conservatorship, and guardianship) often supervises the executor to make sure that the wishes in the will are fulfilled.
A valid will builds the foundation of an estate plan. It’s the critical factor to ensure that the estate is settled according to the decedent’s desire.
The probate court uses the presiding document to guide the process of settling an estate. However, assets such as retirement plans and life insurance policies are not considered probate assets and pass directly to the beneficiaries.
Aside from asset disposition, a legal will establishes guardian arrangements, including the care of an aging parent or a child with special needs.
Step by Step Guide in Making a Will
- Check the Eligibility Requirement
You must be over 18 years of age and have testamentary capacity:
- You know the legal effect of the last will
- You are aware of the extent of your assets
- You determine the people who would benefit from your estate
- You are capable of making rational decisions about who will benefit from your will
- Prepare a List of Your Assets
Ensure a list of your assets, such as personal property, superannuation, investment, bank accounts, investment portfolio, and other things of value.
- Name a Beneficiary
Choose your heir and include their full names, contact number, and addresses in the will. You must include all your children. Any child not listed in your will may have the right to claim against it.
If you intend to disinherit some of your children, you should name them specifically. Otherwise, the court may assume that you made a mistake and may re-interpret your will, including the child you left out intentionally.
Stepchildren are not your natural heirs. Therefore, they’re omitted if you leave your assets to “all my children.” They only become part of the list if you legally adopted them. If you want to give them something, you must name them as beneficiaries in your will.
You may also consider your less abled family members and other financial dependents. If you have minor children, include the names of people you’d like to appoint as guardians.
You may want to think about the following questions when choosing a guardian:
- Will my appointed guardian be mature and old enough to look after my children?
- Does my chosen guardian have experience in raising children?
- Is my preferred guardian concerned about my children’s welfare?
- Can my proposed guardian take care of my children financially, physically, and emotionally?
- Do my children feel comfortable around my preferred guardian?
- Where does my proposed guardian live?
- Will my children be open to the idea of moving right after I die?
- Include Specific Bequests
List the specific gift you want to bequeath to particular people or organisations. It could be personal items or sums of money. You may also opt to give gifts while you’re still alive.
An absolute gift allows your beneficiaries to have complete possession and control over your belongings. Upon receipt, your heirs own the property and may do whatever they want with it. However, the use of the assets should still be subject to legal regulation.
On the contrary, a conditional gift is revocable if the beneficiaries don’t fulfil its conditions. Let’s say, you gave your house to your best friend Cathy, on the proviso she takes care of your dogs when you die. If she fails to do this, the gift will be revoked.
- Describe the Details of Your Funeral
Ensure that you include the funeral details in your will, especially if you have a pre-paid arrangement. Your expressed wishes for your funeral are not binding. Therefore, there’s a chance your will won’t be seen until after your funeral.
You may plan a family conference to discuss your concern with your loved ones. You can also use the Additional Clauses section to identify your funeral instructions.
- Nominate an Executor
Make sure to appoint a responsible and competent executor who will handle your estate accordingly.
The role of an executor includes paying debts, collecting estate assets, and distributing the properties to the designated beneficiaries in the will. You may choose a friend, a family member, or an independent trustee organisation as your personal representative.
Life circumstances can change, so it’s essential to review your will regularly to ensure that it reflects your wishes accurately.
Other Important Things to Consider When Drafting a Will
- Not appointing beneficiaries as witnesses to avoid possible cancellation of their entitlements
- Ensuring that a will or a codicil is in its proper format, so as to avoid contested wills
Will Contest: Questioning the Capacity of Making a Will
Writing your own will involves careful planning. Unfortunately, your final intentions won’t be fulfilled if someone successfully contests your last will.
If there’s a dispute about the document’s validity, a self-proving will that contains all sworn statements from the witnesses who watched you sign your will can be used as evidence.
A self-proving will eliminates the need for your chosen witnesses to come to court and testify. Their sworn statements attached to the will can prove that the signature is genuine.
Reasons for Questioning the Legality of the Will
Even if your last will is legally binding, someone may still dispute its legality in court. Although individuals can’t challenge a will just because they disagree with it, there are legal grounds for a will contest that you must not overlook.
Below are the valid reasons for contesting wills:
- Execution Problems
If your own will is unsigned, is not witnessed, or is not compliant with your state law, a family member can invalidate it. Therefore, you must have an estate planning attorney to give you legal advice in preparing your will.
- Testamentary Capacity
A family member contesting your will can use your mental state as a reason to invalidate your will. Therefore, you must have a sound mind when signing the document.
You may ask your lawyer to obtain medical records from your healthcare provider, or videotape the signing to prevent someone from questioning your mental capacity.
- Fraud and Undue Influence
Opportunists might trick you into signing a different document that turns out to be a will. Make sure to read everything carefully. If you’re incapacitated, it will help to hire a lawyer.
Document signing should be of your free will and not because someone forces you to do it. Undue influence is another ground for contesting wills. If you’re concerned that there would be such a claim, talk to your lawyer to prepare counter-evidence.
You may also speak with your heirs about the content of your will and its purpose. Discussing such matters during your lifetime can help your heirs understand your decisions.
Wills, Trusts, and the Power of Appointment
Wills and trusts are both essential in estate planning. They differ, however, in many ways. Trusts are legal entities created by trustors to decide how to transfer portions of all their assets to their appointed trustees.
When you bestow powers on any individual to dispose of specific properties under your last will and testament, such action is called the power of appointment. Here, the trustees have the authority to manage the assets of the beneficiaries of the trust.
There are many types of trusts, and they’re created for several reasons. However, these trusts fall into two main categories: testamentary and living trust.
As mentioned earlier, a testamentary trust is frequently used if the beneficiaries are minor children or disabled people. This trust is irrevocable, and the appointed trustee handles the deceased person’s assets until the trust expires and the beneficiaries receive control of it.
Usually, the trust’s expiration date is tied to a specific event, such as when the beneficiaries graduated from college or reached a certain age. Until the trust expires, the probate court inspects it periodically to ensure proper management.
Unlike a testamentary trust, a living trust can be revocable. Through a revocable living trust (RLT), you can still exert control over your assets, even after passing.
An RLT is commonly used to avoid probate (reviewing the will’s validity). It also protects the privacy of the trust owner and the beneficiaries, as well as minimise estate taxes.
Republished vs. Revived Will
Republishing a will means amendments have been made on a last will and testament. It comes into effect from the date of the republication. The revival of a will restores the previously revoked testament.
A will can be republished in the following situations:
- When the will is re-executed
- When any addition is made and there’s an intention to republish the will
- When a revoked will is subsequently revived
What Is Probate?
Even if you have a legal will, your assets can’t be distributed right away unless a court grants probate.
Probate is when your executor has to register your last will and testament in your state or territory’s Supreme Court. It is crucial for getting the authority to administer your estate and manage the disposal of your assets and debts.
Every Australian state and territory varies in the probate process. Therefore, do your research to know the specific laws in your state.
Legalities Involved in the Probate Process
The grant of probate process includes several legalities. First is the appointment of an executor. This person is identified in the decedent’s will and is notified by the party that holds the document.
The primary role of your executor is to obtain a grant of probate from the Supreme Court so they can administer your estate. The next thing they’ll do is secure and distribute your assets and ensure that the instructions of your will are lawfully fulfilled.
Some of their other responsibilities involve:
- Notifying banks and other organisations of your passing
- Identifying the beneficiaries of your estate and informing them of your death
- Determining the beneficiaries’ entitlements
- Settling your debts and any estate claims, which may include selling off assets held by your estate
If you still have money left in your bank account, your executor must show the grant of probate as proof that they’re authorised to collect the money on behalf of the estate.
A grant is also necessary if you own a substantial number of shares in a company and want your executor to manage them.
The Land Titles Office will also need to see the ‘grant’ before transferring your real estate to your executor.
Owning Properties in Another Country or State
If you own properties in different countries, your personal representative might need to register for a grant of probate in each area where your assets are located.
Your executor may apply for a resealing of the original grant if your assets are in different states of Australia.
What Is Estate Planning?
Estate planning is the preparation of tasks required to manage your assets in the event of your death. It ensures that everything you own will go to the right individuals when you pass away. It’s a more comprehensive process than creating a will, as it involves different documents to secure your assets after your passing.
In addition, an estate plan provides a financial buffer for your family and loved ones. When you name your family members as beneficiaries, you can be sure they – and not random people or organisations you’re unfamiliar with – will receive what you leave behind.
The cost of setting up an estate plan depends on your financial circumstances and the complexity of your wills and estates. The fees for establishing your estate plan may be higher if you have specific requests, own your business, or have been married more than once.
Setting up an estate plan is crucial because it covers everything you own. It includes bank accounts, insurance, investments, land properties, vehicles, and other valuable items. An estate plan also explains how you want to handle every aspect of your life while you’re still alive and after your passing.
The following are the things you can’t include in your own will but can be covered by your estate plan:
- Death benefits from your superannuation fund
- Properties owned by discretionary or unit trusts
- Assets held in family trusts
- Assets owned by a family company
- Assets held by a private corporation
- Proceeds from your life insurance policy
- Jointly owned property
The above examples are commonly referred to as non-estate assets. These assets don’t need to go through the probate process after your passing, since they go directly to your heirs.
To plan your estate carefully, you should consider the following:
- Writing a will that includes specific instructions on the distribution of your assets
- Designating a guardian for children under 18 years of age
- Naming a successor trustee for a family trust
- Providing for the transfer of your dealings and your business
- Ensuring that the money from your life insurance and superannuation will be distributed tax-effectively
- Having a pre-paid arrangement for your funeral so the cost will not be burdensome to your loved ones
- Establishing a power of attorney (POA)
POA gives authority to another person to manage your financial affairs on your behalf. A power of attorney can be categorised into two types: general and enduring.
Unlike a general power of attorney, an enduring power of attorney continues to operate even if you lose total legal capacity. Here, your attorney makes decisions only about your property and financial affairs. They aren’t permitted to make personal and lifestyle decisions for you.
Is Will Revocation Possible?
Revocation of will means your testament is no longer valid. The most recent and updated will determines how a person’s estate is controlled. If you pass away with a revoked will, you’ll die intestate.
Revocation could either be voluntary or by law. Marriage and divorce are grounds for will revocation by law. In contrast, a will may be revoked voluntarily by:
- Another will or codicil
- A declaration in writing of an intention to nullify a will
- Destruction of the will
In the case of voluntary revocation, you must prove that you have the necessary mental capacity to revoke the will and require an intention to invalidate it.
Five Methods of Revocation
- Revocation by Another Will or Codicil
Some wills include a clause revoking prior wills, such as “I revoke all previous testamentary dispositions.” On the contrary, expressions like “last will” and “last and only will” do not intend to revoke former wills.
When you revoke your will to write another one, the revocation of the previous will is conditional.
Dependent relevant revocation means the revocation of the original will is ineffective if you made it by executing a new one. The newly completed testament is invalid. In this case, the former will remains in force.
If the court sees inconsistencies in the testamentary instruments, they may only revoke a portion of the first will. However, if both of your wills are pretty similar yet distribute your estate differently, the second will is taken to invalidate the first one.
- Revocation by Declaration in Writing
Any writing that includes an intention to revoke a will is adequate, provided that the declaration is under the same legalities required for creating a will.
- Revocation by Destruction
You must intend to destroy the will by tearing it apart, burning it, or destroying an essential part of it, so it becomes illegible.
If you intend to destroy the will, but you can’t personally carry out its destruction, you may ask another person to do it at your discretion.
- Revocation by Marriage
Irrespective of your intention, your will is revoked by your marriage. If you don’t write a new will after marriage, the rules relating to intestacy apply.
- Revocation by Divorce
When you agree to end your marriage formally, you also agree to divide your shared assets permanently. Your partner will then lose all claims to your share of the estate.
A divorce automatically invalidates your will in all states and territories in Australia except for Tasmania.
In Tasmania, a divorce will have the effect of revoking your ex-spouse as the executor of your will. However, they may act as trustees for any properties you have left for your beneficiaries.
Last Will and Testament FAQs
- What does a residue of the estate mean?
The residue of the estate includes properties that aren’t given as a specific gift or used to pay your debts.
Let’s say you own a house. You gifted your son your car and gave your daughter your jewellery. Other items such as your furniture, appliances, and cash savings will be part of the residue of your estate. Your surviving spouse will be the one who’ll get those properties.
Your executor has to settle your debts before the distribution of the residue of your estate. For example, if you had $25,000 in savings and $10,000 in debt, your personal representative should pay the debt before distributing the residue.
Usually, debts are payable from the residue first. Specific gifts will be traded for cash to pay debts if there isn’t sufficient money from the residue.
Remember that your spouse, ex-spouse, your children, and your ex-de facto partner may be entitled to parts of your properties, notwithstanding the provisions of your will. Obtain legal advice if you’re unsure of your obligations.
- How can I be sure my pets will be cared for in the event I suddenly get sick or die?
You should discuss your concerns with your family members or trusted friends. It would be better if you leave spare house keys with them.
Ideally, you should also carry an information card in your wallet to notify emergency medical personnel. The card should contain contact information for pet caregivers and other essential medical details of your pet.
You can’t name your pets as beneficiaries. However, you may provide instructions to your personal representative to find suitable care for them and leave money for their upkeep.
- What can I include in the “additional clauses” section?
The “additional clause” is a section in your will that lets you add up specific gifts or express some non-binding wishes regarding some matter. However, the “additional clause” section must not be used to:
- Express your healthcare wishes (note: medical treatment options are prescribed in a healthcare directive)
- Instruct a beneficiary on how to use a gift specifically
- Give away other people’s property
- Bequeath a property that is jointly owned with someone else
- Give away a specific gift a second time
- What documents do I need to prepare for my estate plan, aside from my will?
Seek legal advice to confirm which documents you need for an estate plan. In general, the following should be included in your estate plan:
- Power of attorney
- Enduring guardianship (a person you legally appoint to make lifestyle and health decisions when you’re incapacitated)
- Advance care directives (contains all your needs and formalises your advance care plan)
- Testamentary trust
- Can my grandchildren contest my will?
Spouses and children of the decedent are automatically eligible persons. However, grandchildren don’t have legal standing to claim their grandparents’ will. They’re only considered eligible persons if they meet the two criteria below:
- Dependency on the Deceased Grandparent
First, your grandchildren must establish that they’re dependent on you during their lifetime to make a claim. They may present evidence that you immediately and directly supported them through continued financial assistance.
If your grandchildren received incidental support or frequent gifts from you, that’s enough for them to establish they were dependent on you.
- Claim for Provision
Your grandchildren must also have provisions based on their present financial situation before any award is made to them.
If they received an inadequate provision from a part of your estate, they must prove that it isn’t sufficient for their education, proper maintenance, and advancement in life.
Suppose the court determines that you failed in your moral duty to make a family provision for those individuals who had a claim in your estate. In that case, they’ll evaluate the adequate condition for your grandchildren.
The amount your grandchildren can inherit depends on several factors, including:
- The financial status of your estate or assets
- The debts that you might have
- Your wishes to bequeath to your grandchildren
If it’s outlined in your will, your grandchildren can also inherit your house after your death.
Death is something you have to prepare for in advance. If you haven’t created a legally valid will, now may be the right time to have one.
Not sure if you can go through the process alone?
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