Have you decided how you will divide your wealth and assets among your heirs when you die? What would happen to your money and property if you died without a will?
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- Have you decided how you will divide your wealth and assets among your heirs when you die? What would happen to your money and property if you died without a will?
- What Is a Will?
- Will Validity and Eligibility Criteria
- Why a Will Is Important
- Making a Will: How to Get Started
- Financial and Legal Housekeeping Tips
- A Checklist to Reviewing Your Will
- Actions to Consider After Will Creation
- Traps to Avoid When Drafting Your Will
- What You Can Do When There Is No Will
Dying without having prepared a legally enforceable will can be costly. Millions of dollars are spent on lawyers and court fees each year for probate proceedings upon the death of a loved one.
Find out how a will can help prevent high probate costs and avoid unnecessary family conflict. This article explains the importance of this legal document, its eligibility requirements, its validity, the drafting process, and reviewing your checklist.
What Is a Will?
A will is a legal document containing provisions on how a person’s property and assets will be distributed to heirs after death. Also called last will and testament, it may include appointing a guardian for heirs that are minor children.
Will Validity and Eligibility Criteria
In making a valid will, a person must have the testamentary capacity or the mental capacity to understand property rights and family responsibilities.
A person who has written and executed their will is called a testator. The testator must be of sound mind, and aware that they are making a will to distribute their property after death.
A will is deemed valid in Australia if it complies with the following legal requirements:
- It is in writing, either handwritten or typewritten.
- The document is signed by the will-maker (testator) under their full name.
- Two or more people are present at the time of signing the will.
- At least two of the witnesses can attest and sign the will in the presence of the will-maker.
- The maker’s signature is made to execute the will.
Why a Will Is Important
Having a living will is not only a necessity among wealthy Australian people or those with complicated assets. Anyone can execute this legal document for such good reasons as:
- You have free will to choose who gets your assets
- You can avoid giving your assets to estranged family members
- You can identify the first choice of beneficiary
- Your heirs can access your assets
- You can save your estate money on taxes
The state will oversee how your assets are distributed based on a set formula if you die without making a will.
An heir can refuse to accept your “gift” (their inheritance) for any reason. This refusal is called “disclaiming” the gift, or a disclaimer.
When an heir disclaims an inheritance, they don’t get to choose who gets it. The gift is passed on to the next beneficiary as if the heir who rejected it did not exist.
Making a Will: How to Get Started
Start by listing your assets and debts. Ensure to include in a new will the family heirlooms, safe deposit boxes, and other assets that you like to transfer to another person or entity.
Essential Tips for Writing a Will
Writing a will on paper, or online, can be done with ease and accuracy if you know what to include and the requirements to make it valid.
Here are practical tips in drafting your will:
- Ensure that the details are accurate and up-to-date
- Your mental state is explicitly stated
- Executors and beneficiaries are assigned
- The will is wholly signed and witnessed by two or more people
Should You Get Legal Advice to Write Your Will?
Working with a law firm with an Australian business number (ABN) can be the best option when you have more assets and properties for multiple beneficiaries.
Getting professional legal advice when you’re writing a will also prevents any issues that may result from intestacy, the failure to make a will before you die.
With a legal adviser on your side, you have a valid will to divide your assets according to your plan in case of death.
Powers of Attorney for Making a Will
A power of attorney is a legal document in which an appointee is stated to look after your business and financial affairs.
The three types of powers of attorney are:
- General power of attorney
- Enduring power of attorney
- Medical power of attorney
The first two types allow you, the principal, to let other people make financial and legal decisions on your behalf.
A medical power of attorney permits a designation of an individual to make medical decisions for you.
Financial and Legal Housekeeping Tips
Keeping the important documents (financial and legal) provides your heirs and executor with essential information to administer your wishes when you die.
Your Super and Your Will
Suppose you want to make sure that specific beneficiaries get to enjoy your superannuation fund after you die. In that case, you need to nominate heirs for such a purpose.
If you do not make a nomination, the super fund trustee will pay your death benefit to your estate. The trustee can also choose the beneficiaries of your assets.
Family Trusts and Your Will
Trusts and wills are both estate planning tools that can ensure your assets are protected and divided among your loved ones as you desire.
The will is a legal document that specifies how your assets will be divided. The trust is a fiduciary relationship in which a trustor gives the trustee the right to assets among the beneficiaries.
What Is a Testamentary Trust?
A testamentary trust is a provision in a will that designates a trustee to manage the assets of the deceased. It is usually used when the beneficiaries of a will are children or people with disabilities.
What Is an International Will?
A new form of will, called international will, is recognised as a valid form in specific countries. For example, you have assets in different parts of Australia like Queensland (QLD), New South Wales (NSW), and Victoria, and you also own properties in other countries.
Having an international will where assets or beneficiaries are located across several jurisdictions can help simplify the proof of formalities for wills.
Without this will, the distribution of your assets could be a complex and lengthy process, should your circumstances change.
The Truth About Homemade Wills and DIY Kits
Homemade wills seem to be uncomplicated and more practical than hiring a lawyer. You can prepare the will yourself, without the need for professional help.
A do it yourself (DIY) kit can be the simplest and cheapest way to write your will in paper form.
A DIY will kit can serve as your template through generic questions to appoint your executor, divide your assets and name your beneficiaries.
The will covers all your properties and assets, including credit cards and bank accounts.
Drafting a will yourself can cost about $150 and up to $1,000 if you hire a lawyer.
The Public Trustee of Queensland provides a free will-making service. They can also help you make enduring powers of attorney or act as your executor or trustee.
Should You Update Your Will?
To update your will and retain its validity, you have to add a codicil to the will. A codicil (addendum) is an addition to the will’s provisions in a separate document to confirm some of the contents or include additional clauses to the will.
A Checklist to Reviewing Your Will
Once you’re done drafting your will, it is time to review the content for completeness and accuracy. These are the things you need to check:
- Introductory clause
- Debts clause
- Tax clause
- The tangible personal property clause
- Devices of real estate clause
- Specific bequests of intangibles and cash
- Residuary clause
- Powers clause
- Appointment of fiduciaries clause
- Testator’s signing clause
- Attestation clause
Actions to Consider After Will Creation
If you get divorced, your will remains valid. However, your ex-partner might not remain part of the beneficiaries due to the dissolution of marriage. On the other hand, if you get married, your will becomes invalid.
To have peace of mind, keep your will in a safe place. You can put your own will in a safety deposit box, online document storage, or your attorney’s law office.
Regardless of your personal circumstances, these are things you cannot include in your will:
- Assets with a right of survivorship
- Assets held in trust
- Assets with designated beneficiaries
- Certain types of digital assets
- Support for the care of a person with special needs
Traps to Avoid When Drafting Your Will
Mistakes in a will can be costly. Resolving the problem or contesting a will usually requires making an application to the Supreme Court.
These are some common traps or mistakes to avoid:
- Not appointing an executor of a will
- Not regularly updating your will
- Failure to inform a particular person (a confidante or a loved one) about the will
- Making changes to a will after signing
- Forgetting about tax planning
What You Can Do When There Is No Will
Suppose you die without a will, or die intestate. In that case, your properties will be distributed according to the law of descent and distributions in your state.
Note that all states do not allow the disinheritance of a spouse. By statute, the deceased person’s spouse has a right of election and can demand a percentage of the deceased person’s estate, no matter what the will states.
The following are the legal steps you should follow to initiate a valid will:
Step 1: Speak with an expert in wills and estate matters and ask for professional advice
Step 2: Study the details of the will preparation
Step 3: Make personal decisions when choosing your beneficiaries.
Step 4: Choose an executor, guardians, or trustee
Step 5: Find a safe and secure place for your will that’s easily accessible for quick updates.
If you need professional advice in drafting your will, request a call from our expert financial adviser today!
How are beneficiaries of a will notified?
After the will is accepted for probate, beneficiaries are notified. Probate is a legal process to determine whether the will is valid and authentic.
What is the order of inheritance if there is no will?
The surviving spouse is in the first order, followed by the children and then grandchildren. Parents of the deceased come after, then siblings, nieces, and so on.
Are grandchildren legal heirs?
Yes. Grandchildren can be legal heirs if they are included in the will. In the absence of a will, the rule on inheritance applies.
The more we do to maximise and grow your super today, the more financial freedom you’ll have in years to come find out how a financial planner or adviser can help you with this and moreTrack your Super
- State Library, New South Wales, Chapter 3: Making a Valid Will, retrieved from https://legalanswers.sl.nsw.gov.au/rest-assured-legal-guide-wills-estates-planning-ahead-and-funerals/making
- Legal Services Commission of South Australia, Updating a Will, retrieved from https://lawhandbook.sa.gov.au/ch36s01s05s02.php