Wills & Estates – Yours

Why have a will?

Your will is the legal document that sets out how your assets are to be distributed upon your death. It will contain instructions for the division and disposal of your assets. It can also cover some lifestyle requests such as nominating guardians for your children as well as your funeral and burial wishes. Your will can also determine the timing of inheritances by use of trust structures as well as donations you would like to make to charities

When someone passes away without writing a will, an administrator is appointed by the court who will use the deceased’s assets to pay outstanding taxes and bills and determine the distribution of the rest based on an established formula, not necessarily how the deceased would have intended. If the person doesn’t have any living relatives, the assets are given to the state government.

What isn’t covered in your will?

There are a number of assets that you are likely to have that are not automatically dealt with through your will. Some of these assets can represent a significant chunk of your total wealth.

  • Some jointly held assets: If you hold assets jointly with someone else (for example, a joint bank account, a joint home, a jointly held car), those assets will pass automatically to the co-owner rather than be distributed through your will.
  • Superannuation proceeds: Your superannuation is not automatically part of your estate. This can be especially significant if you hold life insurance through your superannuation fund. Generally, the payout of your superannuation and any associated life insurance is at the discretion of the trustee of the superannuation fund. It is possible to make a binding nomination, however these can be restrictive. You should discuss this issue with your superannuation fund.
  • Life insurance policy proceeds: Individual life insurance policies also do not automatically go through your will. You can, however, nominate your estate as the beneficiary in order to have the proceeds distributed via your will.
  • Interest that you have as owner or beneficiary of a trust: Generally, the relevant trust deed for any trust that you may be a member of will outline how ownership will be transferred.

How to write your own will

There is no doubt that using a DIY will kit can be a cheaper option than having your will drafted by a solicitor, but keep in mind that your will is a legal document and if you do not know how to write a will and it is not executed properly, it may be invalid. Because of this, it is often advisable to seek professional assistance.

Anyone can prepare a will if they are over 18-years old and deemed to be of sound mind. A will must be:

  • in writing
  • signed by the owner of the will and be witnessed by two people (not an heir or spouse)

If you choose to write your own will, here are a few tips to get you started.

  1. Do your research – example wills are available online and you can read the samples to get an understanding of how you may like to structure your own.
  2. Find a suitable DIY kit – there are many available for sale online.
  3. Understand your state’s specific requirements – visit your state’s Public Trustee’s website (listed below) to understand what is needed and what services may be available to you, including exemptions from charges. For example, some states automatically revoke your will when you get married or divorced.
  4. Make it clear – ensure everything you write provides explicit instructions and clearly identifies heirs, including details such as their address, birth date and relationship to you. If you choose to exclude someone from your will, such as an estranged relative, make it clear this was intentional to avoid future legal challenges. The clearer your explanations within your will, the less likely it will be misinterpreted or considered invalid.
  5. Include back up recipients – this is important in case your heirs are unable or unwilling to accept their inheritance, for example if they pass away before you or cannot be located.
  6. File it carefully – tell those closest to you where they can find your will to save everyone tearing through your house trying to locate it. It is also a good idea to keep a list of the legal documents you have and where they can be found.
  7. Keep updating it – once you have finished writing your will, don’t cast it aside and forget about it. Ensure you update it as your circumstances change.

Links

Power of Attorney – Financial

Power of Attorney – Medical

It is often a good idea to speak with a solicitor or private trustee to learn how to write a will that is legally binding as if your will isn’t signed and witnessed correctly, it will not be considered valid. There are also community legal centres around the country that may be able to help. Your state’s Public Trustee may not charge to prepare or update your will as long as they are made the executor of your will. Check your local Public Trustee to understand your requirements.

Source: moneysmart.gov.au