Making a Will
A Will is a legal document that records how you would like your assets distributed after you die and appoints an executor to administer your estate. The person making the Will is known as the testator.
There is no simple answer about how to prepare your Will – this depends on your assets, your family, and personal circumstances. What is certain, is that you need to make a Will that is clear, avoids confusion and conflict between your loved ones, and that is legally valid. This helps to protect your family from costly and stressful legal disputes.
Choosing your executors
Your executors have the legal and administrative task of sorting out your assets and debts after you die and making sure that the wishes outlined in your Will are upheld.
The role of an executor is a responsible one and while it can be tempting to choose your best friend or eldest child simply because it seems the right thing to do, it is important to consider whether that person has the capacity to carry out the role.
The question of who to appoint as executor is an important one and something we can guide you on when preparing your Will.
Choosing your beneficiaries
You can choose anybody as a beneficiary of your estate and distribute your assets in any way you like, however if you do not provide for your family and dependents, your Will could be contested, depleting hard-earned assets through expensive legal costs. We can help guide you when making this decision.
You should also consider the effects that an inheritance may have on your beneficiaries. In some cases, a testamentary trust can sidestep potential taxation problems, so it is important that you get specific advice about your situation.
What is a Testamentary Trust?
A testamentary trust is a more complex Will that creates one or more trusts after the testator dies. These trusts can help protect vulnerable beneficiaries, safeguard assets from third-party creditors, and provide flexibility in the distribution of assets resulting in more optimal tax outcomes. Talking to a lawyer and financial planner can help tailor your Will to address these important considerations.
How do you know a Will is valid?
A person making a Will must be mentally competent and the Will must be correctly signed and witnessed and show no evidence of tampering. The witnesses cannot be beneficiaries or related to beneficiaries and must be over 18 years.
If there is any doubt or potential for dispute as to mental competence, you should obtain written confirmation from a doctor and store a copy of this with your Will.
How often should I review my Will?
You should review your Will periodically and especially after any major events such as marriage, divorce or separation, the sale or purchase of real estate, the death of a beneficiary or if your assets change significantly. Reviewing your Will regularly ensures that it continues to represent your testamentary wishes and is the best fit for you and your family.
What happens if you die without a Will?
If you die without a Will, you will die ‘intestate’. If this occurs your assets will be distributed according to the relevant State law.
The rules of intestacy provide for a specific order of distribution to the deceased person’s next of kin designed to reflect society’s expectations as to who should benefit from the estate. However, they may not consider the real wishes of the deceased nor his or her unique circumstances.
If you are the next of kin you can apply for a grant of Letters of Administration, which will give you authority to deal with the estate assets and liabilities and finalise the estate as an executor would.
Information for Executors
Have you been chosen to be the executor of a Will? This means that you have been given responsibility to manage somebody’s estate according to the terms outlined in the Will and to protect their assets under the various laws and rules that govern estate administration in Australia.
An executor’s duties may include:
- Organising the funeral and notices
- Locating the Will and obtaining a copy of the Death Certificate
- Making sure property and assets are safe and secure
- Applying for Probate
- Paying liabilities of the estate
- Collecting monies belonging to the deceased from financial institutions and insurance companies
- Collecting debts owed to the deceased
- Lodging estate tax returns
- Selling and transferring property and other assets
- Reporting to beneficiaries
- Distributing the proceeds of the estate to beneficiaries
- Setting up trusts
Do I need a Lawyer?
Executors have significant legal responsibilities and may need to protect themselves from personal liability. This is particularly so with complex estates or where a family provision claim is made. They may need to consider matters outside their areas of expertise such as the tax implications on the sale or transfer of assets, the order of payment of debts, and the consideration of a family provision claim.
Being an executor can be overwhelming, particularly when grieving, which is why most executors choose to be guided by professionals such as lawyers and accountants.
Estates vary in complexity and an executor’s duties can be complicated, so it is wise to get advice from a lawyer. The legal costs are usually covered by the estate.
What if I’m not up to the job?
Just because you have been named an executor doesn’t mean you have to accept the responsibility. If there is another executor named, they can take on the whole of the job, or if you are the sole executor you can apply to the court to appoint someone else.
What is Probate?
Probate is recognition of the Will’s validity and permission from the Supreme Court for the executors named in the Will to carry out their duties in relation to the estate. You will likely need a grant of Probate to deal with the assets of an estate, like selling property and obtaining bank funds.
Other estate planning considerations
An effective estate plan helps you to prepare for the inevitable and the unforeseen.
In addition to preparing a valid Will that reflects your wishes and appoints somebody you trust to manage your estate after you die, you should also consider:
- Preparing a Power of Attorney to appoint somebody you trust to manage your legal and financial affairs if you are unable to do so yourself; and
- Putting in place an Advance Health Directive to ensure that health and welfare decisions that align with your wishes and values can be made on your behalf if you are incapacitated.
We understand the complexity of estate planning and the potential pitfalls in this area. We ask the right questions and prepare your Will and other documents to ensure your assets are distributed to your intended beneficiaries, and that your affairs are entrusted to those you choose if you are incapacitated. Once formalised, we can store your Will and other estate planning documents safely in our secure vault.