An Up-to-Date Will is an essential part of your Estate Plan

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Nearly everyone has some assets to pass on after they die, and many Australians will have significant assets when their home, bank accounts, share portfolio, superannuation and insurance are taken into account. It is essential to make appropriate plans, of which preparation of a Will is just a part, in order to protect your loved ones and the assets that you have worked hard to preserve and grow during your lifetime.

 

What happens if you die without a Will?

 

If you die without a Will, the intestacy laws in your State determine how your estate will be distributed, and this may not accord with your wishes. Take the following examples of where the deceased died without a Will

[1]:

 

  • 67yo Sarah died leaving behind husband John and their 2 adult children. Most of Sarah and John’s assets, including their $1.6 million home, were in Sarah’s name alone. Under the legislation, John would receive Sarah’s personal belongings, the first $100,000 of Sarah’s estate, and one-third of the balance. Their children would share the remaining two-thirds of Sarah’s estate.

 

  • 41yo Greg had lived with girlfriend Leanne for the past 18 months, and had a close relationship with his parents and siblings, when he died unexpectedly. Greg had no children, but was married to Melinda for 5 years before they separated (but did not divorce) 3 years ago. Melinda moved up north, and they had not spoken since. Leanne would not qualify as a domestic partner under the legislation, and so Melinda as Greg’s legal spouse would inherit Greg’s whole estate.

 

  • Only child 18yo Annabelle and her 49yo single mother Jane died tragically in a car accident. It was impossible to tell who died first and so under the law it is presumed Annabelle survived her mother. Jane’s whole estate – including a holiday house Jane inherited from her father that had been in the family for generations – would form part of Annabelle’s estate and go to Annabelle’s natural father who left when she was only a baby and had no part in her upbringing.

 

What a difference a Will can make

 

A properly drafted Will can make all the difference. A Will empowers you to provide for your loved ones in an appropriate and tax-effective way, leave specific gifts to particular people or charities, and appoint a person to carry out your instructions and wishes.

 

Even if you already have a Will, it is imperative you review your Will regularly (at least every 3 – 5 years) as your requirements may change depending on your stage in life, your intended beneficiaries, your level of assets and how they are held.

 

Here are 10 things you should consider when preparing your Will:

 

1. Who is to be your executor? Your executor is the person appointed in your will to manage your estate and carry out your wishes in your will after you die. This is a position of great trust, and the appointment requires careful thought. It may be a family member, trusted adviser such as an accountant or lawyer, or an independent trustee company.

 

2 . Do you wish to leave any specific gifts to particular people or charities?

 

3. Who are the beneficiaries that you wish to benefit from your estate when you die?

 

4. Can your estate planning objectives be met with a “standard” Will (e.g. leaving your estate to your spouse then children), or would “testamentary trusts” be appropriate to provide protective advantages and allow tax-effective distribution of your estate?

 

5. Should you appoint a guardian to look after your minor children?

 

6. Do you want to include any other wishes or instructions e.g. regarding funeral arrangements, or organ donation?

 

7. What are your assets and how are they owned? e.g. jointly with someone else, in your own name, in a family trust.

 

8. If superannuation death benefits are paid into your estate, consider the most tax-effective way for them to be applied to support your surviving spouse and your children.

 

9. Is any life insurance payable to your estate?

 

10. Assets held in a company or trust cannot be willed directly and you should consider how and to whom ownership or control of other entities will be transferred.

 

This article has been prepared for general information purposes only and should not be relied on as (or in substitution for) legal, accounting, financial or other professional advice. Liability limited by a scheme approved under Professional Standards Legislation. Legal practitioner directors and employees of PFG Legal Services Pty Ltd are members of the scheme.

[1] These examples refer to the current law in Victoria. Separate legislation is enacted in other States and the distribution of the deceased’s estate amongst relatives and the spouse’s entitlements may be different.

 

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Learn   Sophie

About the Author:

Legal Practitioner & Director of Prime Financial Group Legal Services. I work in conjunction with accounting partners and financial advisers to deliver high quality, professional and personalised legal services in asset protection (Estate planning, Business succession strategies and structuring , Superannuation, Family Trusts & Powers of Attorney).