While it isn’t pleasant to contemplate death, if you die without a Will, you die intestate. If you die intestate you create many problems that would have been easily surmountable had you only made a Will.
In each state or territory of Australia there is legislation to deal with succession in the event a deceased dies intestate. For example, in New South Wales, the Succession Act 2006 (NSW) will govern how your estate is distributed. This Act has a list of recipients that it will work its way down from (spouse, children, parents, brothers and sisters and so on). However, if you die intestate and there are no eligible recipients of your assets, the state is entitled to keep everything.
Given that many people spend most of their lives working hard and amassing assets, it is important to give detailed thought to how those assets should be distributed (and to whom) upon their death. Further, the creation of a Will assists your loved ones administer your Estate with as little complication as possible. This is an important consideration given that the death of a loved one can be stressful, let alone being faced with the headache of administering their estate.
The following are issues to consider when making your Will:
Estate and non-estate assets – what is your property?
In your Will, you can only ever gift what is personally yours. For example, you can gift a car in your name but you cannot gift assets from a trust or superannuation because these assets are not in your name (though they may be held for your benefit).
However, because you may be entitled to these assets, and as they fall outside your estate, you must ensure that they are dealt with in your overall estate plan in addition to making your Will.
This can be done by ensuring the controlling positions in any trust in which you have an interest are dealt with in your Will and making a binding death benefit nomination for any superannuation death benefits, whether to your estate or a beneficiary personally.
Any interest in a business must also be considered and thought given as to whether this is an estate or non-estate asset.
Who will benefit from your estate?
Who do you want to leave your property to?
Your Will should make proper provision for your spouse or partner, children or other family members and friends. You can also specify the age at which any children will inherit from your estate.
Do you want to leave some money to a particular charity? This can also be specified in your Will
Who will be your executor?
The job of your executor is to administer the estate, pay estate debts and distribute the estate in accordance with your Will. They may be family or friends, or alternatively experienced professionals such as your solicitor or accountant.
It is prudent to ensure that your executor understands financial issues and is trustworthy. It is also a good idea to have a “back up” or alternate executor.
Regular reviews of your estate plan
Your Will expresses your wishes at a particular point in time. It is advisable that whenever your circumstances change, you should consider reviewing your Will so that it accurately reflects your current circumstances.
Situations where you may update your Will include: marriage, separation or divorce, starting a de-facto relationship, having children or grandchildren, death of a spouse and retirement.
At each of these junctures it is a good idea to look at your entire estate, including estate and non-estate assets and ensure that all are dealt with in the way you desire and that you have necessary insurances in place to pay off any debts and ensure your loved ones are provided for.
Can anyone contest your will?
While you are entitled to leave your assets to anyone you wish, in some circumstances, friends or relatives who believe they have not been sufficiently provided for are entitled to contest your Will. One of the most common ways is through an application under the relevant family provision legislation in each state and territory.
A family provision application involves a person eligible under legislation making an application to the court seeking a share of the estate, or a larger share of the estate, on the basis that the deceased failed to make adequate provision for them.
When making your Will, particularly if you are seeking to exclude somebody who has been financially dependent on you during your life, it is prudent to consider these issues.
If you require assistance with making your Will and estate planning contact LegalVision today on 1300 544 755 to speak to one of our estate planning lawyers.