Good grounds for creating a Will
In summary – it is strongly advised to conduct proper estate planning and maintain an up-to-date Will
Writing a legally binding Will, selecting qualified executors, and keeping your Will updated as your circumstances change should all be carefully considered.
No Will or next of kin?
According to recent reports, the state may inherit the $40 million inheritance of a Holocaust survivor who passed away without a will or any obvious survivors.
Consider how you will eventually distribute your assets
Intestate means that you pass away without making a Will. Many Australians pass away without a valid Will, which places them in an intestacy or partial intestacy situation. Every jurisdiction in Australia has a strict statutory system in place to handle succession in the event of intestacy. But rather than rely on the law of the state to decide who should handle your estate and receive your assets, wouldn’t you rather decide for yourself?
According to the law, the state is entitled to all your assets if you pass away intestate and there are no suitable beneficiaries. Further, a lot of your money will be spent on legal fees to search for beneficiaries.
While everyone tries to avoid thinking about death, it is necessary to plan how your assets will be distributed after death. Most people dedicate their whole working lives to building wealth, but they rarely give any attention to how that wealth will be divided once they pass away.
If you have children, a business, or any other assets, you should make sure your will is legitimate and up to date and, if necessary, seek estate planning guidance.
When drafting your Will, keep these five things in mind
- Your property
You are only ever permitted to leave in your will what you individually own and are entitled to do so. As an illustration, since a trust asset is not your property, you cannot bequeath it in your will.
Property held as tenants in common, the personal property you possess, such as a bank account or a car, and life insurance proceeds (where the estate is specifically named as the beneficiary) are all examples of assets that might be distributed by a will, or “estate” assets.
Unless you have specifically stated in a nomination that superannuation belongs to your estate, it is not an asset.
- Providing for your loved ones
Who do you want to inherit your assets from you? Make sure you have enough money set aside for your partner or spouse, kids, extended or former family members, and friends.
Do you want to leave some money to a particular charity? Do you want to put any conditions on any of your legacies? Unless you specify an age at which you want your children to receive their inheritance, they will be entitled to receive it when they turn eighteen.
- Appointing an executor
The executor’s duties include safeguarding estate assets, handling debts, and distributing the estate in line with the terms of your Will. They could be members of your family or close friends, or they could be seasoned experts like your lawyer or accountant. They must also arrange your funeral, so if you would like to be laid to rest relatively quickly, then it is best to appoint an executor to do this, rather than laying in a morgue for a prolonged period while the issue is resolved possibly through protracted legal battles.
Make sure the person you choose is knowledgeable about money matters. Don’t forget to check if they are ready to serve as your executors in the event of your passing; otherwise, you run the danger of them declining the position and having to find someone else to handle your estate.
Keep in mind that there may be long-term obligations under the Will, particularly if your Will calls for the establishment of a trust, such as one for your children.
- Proper estate planning
When you pass away, what do you want to happen to any business interests you may have? Many people make the error of believing that assets that are legally controlled by family businesses and family trusts are likewise impacted by a will.
To secure assets, provide for beneficiaries, and provide tax advantages, testamentary trusts are beneficial and should be taken into account.
You can and if necessary, should appoint a new Appointor to any trusts in which you have an interest, in your Will. The position of an appointor is very powerful as they appoint a trustee who can favor certain beneficiaries in a way that you do not intend.
- Reviewing your Will regularly
Your Will outlines your intentions at a specific moment. It is advised that you check your will periodically to ensure that it still appropriately reflects your preferences as your circumstances change.
You should review your Will if any of the following occur: you get married, you get divorced, you establish a de facto relationship, you have children or grandkids, your spouse passes away, or you retire.
Who can contest your Will
Last but not least, even while you have the freedom to leave your assets to anyone you choose, there are some situations where friends or family members who feel underrepresented in your Will may be able to fight it. A Family Provision Application (FPA) is one of the most popular methods.
An FPA is made by someone who has a specific relationship to the deceased and asks the court for a portion of the estate or a larger portion of the estate because the deceased did not make “adequate provision” for the applicant’s maintenance, education, or advancement in life.
Given the possibility of such a claim, it is another matter you should take into account while drafting your will, especially if you want to exclude someone who was financially reliant on you during your lifetime.
Prepare your Will today and we’d be happy to assist. Call (03) 9028 7603 and speak with one of our specialists.
DISCLAIMER
This is a commentary published by HazeLegal for general information purposes only. This is not meant to be taken as particular advice. You should seek your own legal and other advice for any question, or any specific situation or proposal, or get in touch with the writer at http://hazelegal.com.au before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories.
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