While many people are unlikely to nominate estate planning aka “Thinking about what
will happen to my assets when I die” as being on their “most wanted things to do” list in
reality, this is something that should be on all our “must do” lists.
Proactively planning for how you would like your assets distributed after your death can
save many hours of heartache for friends and family and can also aid in ensuring that
the assets you have spent a lifetime accumulating are not eaten up by costly legal
battles after your death which arise simply because no direction has been left as to how
you wish your estate to be divided.
To help you to get started we have set out below some of the most common questions
that arise when considering planning for your estate.
What is a ‘Last Will & Testament’?
A ‘Last Will & Testament’ (often simply referred to as a ‘Will’) is a written record of how
you would like your assets shared or distributed after your death. A Will is different to a
Power of Attorney (“POA”). A POA allows a person or company to manage your assets
while you are alive. A separate legal Will is needed to deal with your assets after your
death.
I don’t own very much do I really need to have a Will?
The short answer to this question is ‘YES’. There are a number of reasons why it is
important to have a valid Will.
Firstly, having a Will gives you peace of mind that you have made your wishes clear and
that your assets will be divided up and administered in accordance with your wishes.
Secondly, regardless of the size of your estate, do not want costly legal disputes to end
up eating into those assets. This can be particularly important if the assets of an estate
are relatively modest. Disputes between would be beneficiaries quickly eat up an estate
and it is very possible that very little of an estate will be left for the beneficiaries if this
occurs.
I made a Will some years ago but should I think about updating it?
Even though a Will does not generally have an expiration date it is sensible to consider
reviewing your Will periodically. In addition, if your personal circumstances change it is
important to review your Will to take into account those changes.
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Important life changes such as marriage, divorce, the birth of children and any change in
personal financial circumstances such as receiving an inheritance or buying a property
are also relevant milestone points at which to consider updating a Will.
It is important to seek legal advice prior to updating a Will. Sometimes the implications of
a seemingly minor change to a Will are not always readily apparent and it is also
important that any amendments to the Will are properly documented, signed and
witnessed to ensure a Will remains valid.
Are there rules about who I must leave my assets to?
While in theory you are able to prepare a Will leaving your estate to whomever you
please, even if that is a home for stray cats, in reality it is very important to seek legal
advice on this point.
Relevant matters may include whether you have any infant children or other
dependents. In situations involving blended families or estranged children careful
consideration also needs to be given to the likely impact of leaving individuals out of a
Will and whether this is likely to lead to a costly legal dispute and contest about the Will.
Who should I appoint as my Executor?
The role of an Executor is one that carries with it great responsibility and while it can be
tempting to choose your best friend or eldest child simply because it seems the right
thing to do, it is important to consider whether the person you are thinking of naming as
Executor has the capacity to carry out the role.
The duties of an executor can include everything from arranging the funeral to managing
the assets of the Estate during the period before probate is granted and the assets are
distributed. Depending on the size of the estate debts may need to be paid and the tricky
waters of any potential dispute in respect of the Will may need to be navigated.
In circumstances where there is a potential for conflict between family and friends it may
be sensible to consider appointing an independent Executor rather than a family
member or friend. This can assist in ensuring the estate is dealt with fairly and without
favour and also means the burden of the Executor’s role does not rest with a loved one.
The downside to appointing an independent Executor can be that considerable fees may
be incurred depending on who or what organisation is appointed. Again, this is a matter
where proactive legal advice can be of great assistance in determining the best way
forward.
What happens if I die without a Will?
If you die without a Will you will be said to have died ‘intestate’. If this occurs your assets
will be distributed according to the relevant State law. This will of course be outside your
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control and may mean that your assets are not distributed in the way that you would
have liked.
Can a Will be disputed or changed after I die?
It is possible that even with the most careful planning someone may wish to challenge
your Will. If a Court finds that you did not make adequate arrangements for a person for
who you have responsibility, such as a dependent family member, then it may overturn
your Will and put in place alternative arrangements for the distribution of your assets.
Depending on where you live this could potentially occur even if the claim is by a nonfamily member.
Another basis on which a Will can be overturned is if a Court were to find that you were
not of ‘sound mind’ when you made the Will. Being of ‘sound mind’ means that you had
sufficient intellectual and physical capacity to make a Will. Matters that will impact on the
question of ‘sound mind’ will be whether the person making the Will had an intellectual
impairment or disability or suffered from memory loss, dementia or some other serious
illness.
A validly prepared, properly witnessed and current Will is a good step in the right
direction in ensuring that your assets are distributed how you want and to whom you
want after your death. A carefully drafted Will can also aid in reducing the likelihood of a
successful challenge to how you choose to distribute your estate.
The potential fall-out from a poorly prepared Will is significant both in dollar and personal
terms and we strongly recommend that you seek legal advice before preparing or
updating your Will. This is an area of law that we have considerable experience in and
we are happy to discuss any questions you may have.
If you or someone you know wants more information or needs help or advice, please
contact us on 02 9191 9293 or email mail@rnlegal.org.