One of the most important priorities in your life should be a Will. If you have assets and have not gone to the trouble of speaking with a lawyer about drafting a Will, it is advisable that you do so sooner that later.
What is a Will?
- determines how your assets will be distributed on your death; and
- reduces stress and financial burden for your family.
It is crucial that your Will is valid, otherwise it will have no effect and you will be considered to have died intestate.
A Will is only one part of your entire estate planning process (noting Enduring Powers of Attorney and Appointment of Enduring Guardian, Superannuation Death Benefit Nominations and the controlling positions of other entities such as companies and trusts must also be considered holistically).
Why do I need a will?
Your Will is the lynch pin to your estate planning tool-box and there are three main reasons why it’s important to have a complete and up-to-date will drafted.
Firstly, your will is the instrument which tells others how you would like your assets distributed when you pass away. Without a will, the way your assets are distributed is determined by a statutory formula, rather than according to your specific wishes. To ensure that all the assets you possess are given to the people or institutions you have in mind, seek assistance from a solicitor so that your estate is structured exactly the way you would like it to be.
Having a valid will is also important so that the people close to you understand how to carry out your wishes. Having a will that gives clear direction about the distribution of your assets reduces stress and confusion at an already difficult time.
Lastly, a valid will significantly reduces the financial burden on your family. If you pass away and you do not have a valid will, the laws of intestacy apply. This means that assets will be distributed according to the statutory formula mentioned above. For your family, preparing the documents and satisfying the legal requirements for administering an intestate estate is much more complex than that for a valid will, increasing the cost and financial burden your family must bear.
Key Issues to Consider
- What constitutes a valid will?
- Who will I appoint as executor?
- What if I need help managing my affairs during my lifetime?
What makes a Will valid?
Each State and Territory in Australia has specific legislation to ensure that Wills are valid. For example, the Succession Act 2006 (NSW) and the Administration and Probate Act 1958 (Vic) administer Wills. You should refer to the legislation for your state or territory to find out specific requirements.
Generally, a valid will is one that is in writing, signed by the will-maker and in the presence of two witnesses, who also sign the document.
Appointing an Executor
An executor is the person responsible for gathering all your assets and then distributing them according to the instructions contained in your will.
First and foremost, an executor should be someone you trust. Another practical consideration is whether that person is likely to survive you, in order for them to carry out your wishes. It is also wise to appoint a substitute (or back up executor) in case your first choice predeceases you or is unable to act as your executor.
Managing Your Affairs
At certain points in your life, you may need help to manage your affairs. A Power of Attorney and Enduring Guardianship are two instruments which formalise another person’s ability to do this.
A Power of Attorney (POA) gives a person you appoint permission to manage your financial affairs in situations where you are unable to do so, such as when you are out of the country. A POA cannot be used where a person is unable to manage their affairs because they lack capacity (such as where that person is disabled) and it is limited to financial affairs. An Enduring Guardianship should be sought when broader powers to manage a person’s lifestyle, health and medical affairs are required.
LegalVision assists individuals with tailored online legal advice for a fixed-fee, including wills. Call LegalVision today on 1300 544 755.