Understanding wills
What is a will?
A Will is a document specifying how you’d like your assets distributed when you die and the person responsible for managing this process (your executor).
Why do I need one?
Having a Will gives you peace of mind. It helps make sure your family and loved ones are looked after financially on your passing rather than being burdened with what is often a difficult legal situation.
Specifically, a Will enables:
- An executor of your choice to be appointed. For example someone competent to run your business within the estate until it’s sold.
- Timely probate. Probate* will generally be granted without undue delay and costs.
- Clear instructions on how to distribute and manage the estate. Minimising the potential for squabbles.
*Probate is the process where the court gives your executor the power to carry out their obligations.
Who can I leave my assets to?
Whoever you want, but if you don’t leave sufficient assets to those who depend on you, they may be able to take legal action to get a bigger share. If you leave assets to someone under age 18, those assets must be held in trust until they can access them, generally on their 18th birthday.
What happens if I don’t have one?
If you die without a Will, an administrator is appointed by the Court to manage your assets. An administrator does not have the same powers as an executor.
If you don’t have a Will, your estate assets will be distributed according to a
State based formula, known as ‘intestacy rules’. These rules do not take into account your personal circumstances or wishes.
The nitty gritty
Who can make a will?
- generally you must be aged 18 or over (there are some exceptions)
- have ‘testamentary capacity’ – know what assets you have and how much they’re worth (not necessarily the exact value); and
- have the mental capacity to make decisions. If there is a question about your mental capacity, make sure you talk to a solicitor.
What assets does my Will deal with?
In
- Assets owned in your own name e.g. shares.
- Assets owned with others as tenants-in-common, e.g. investment properties.
- Specific belongings e.g. paintings, photos, or items of sentimental value. Be sure to list specific items to ensure they are easily identifiable.
Out (non-estate assets)
- Superannuation (unless there is a nomination to the estate or the fund decides to pay to the estate).
- Certain insurance policies.
- Assets owned jointly as joint tenants (ownership is passed directly to the other owner).
Can I change my will?
You can change your Will whenever you like, and should change your Will as your circumstances change.
Some common reasons for changing your Will include:
- Your dependents’ situation changes (e.g. marry, separate, become a parent, children grow up).
- Start a business
- A substantial increase in your assets
- You dispose of asset(s) mentioned in your Will
- A beneficiary or executor dies
Your Will is generally revoked if:
- You write something on the Will so it is clear you intended to cancel it
- You marry
- You destroy your original Will
- You make a new, valid Will (this automatically cancels the old one)
What about separation and divorce?
It’s best to check with your solicitor how your divorce impacts your Will. It is also important to draft a new Will taking effect as soon as possible.
Top Tips
- Your Will should meet your needs – no 2 people are the same.
- Keep your Will current – your needs and circumstances will change over time.
- Keep your Will in a safe place, give your executor(s) a copy and let them know where the original is kept.
If you would like to review or update your estate plan, please contact us.
