Make a Will

A properly drafted and executed Will can simplify the administration of your estate and potentially reduce costs for your beneficiaries. It can also help to avoid family disputes.

What are the benefits?

• Your estate can be administered faster and with fewer complications because your intentions will be known.
• Your assets are more likely to pass to your intended beneficiary.
• There is reduced potential for family disputes.
• You will have opportunity to manage tax implications and reduce costs for beneficiaries.
• You will have opportunity to nominate a suitable guardian if you have dependants.

How does a Will work?

A Will is a legal document that sets out how you want your assets to be distributed when you die. To be eligible to make a Will, you must be over age 18 and have mental capacity.

Some important things to consider when drafting a Will include:

• who should benefit from your estate
• whether special bequests of assets are to be made to certain beneficiaries
• who the executor of your estate should be – this can be more than one person who should be willing and able to accept the role; a provision for an alternative executor may also be considered in case the appointed executor(s) are not able.
• burial or cremation instructions.

If you have dependants, you may also wish to consider whether your Will should be used to create a testamentary trust or life interest, or if a guardianship clause needs to be included.

• Testamentary trust – this trust is particularly useful if you have beneficiaries who are young or who have a disability. Your assets will pass into the trust where they can be protected if necessary. Income distributed to beneficiaries who are minors from a testamentary trust can receive favourable tax treatment.

• Life interest – a life interest can be used if you want to give a person the right to use an asset during their lifetime but have another beneficiary take ownership of the asset. A life interest is commonly used to enable a surviving spouse to continue living in a home with the ownership of the home passing to the children.

• Guardianship – if you have young or disabled children, your Will can include the nomination of your preferred guardian for those children. Your guardianship nomination is a declaration of your intentions only and can be overruled by a court if it decides that it is in the best interests of the child to appoint another guardian.

Estate and non-estate assets

A key aspect when preparing a Will is to identify which assets will form part of your estate and which are non-estate assets. Only estate assets are covered by your Will.

Estate assets are those which are directed to beneficiaries via your Will. They could include:

• assets held in your name.
• your share of assets held as tenants-in-common.
• your superannuation and life insurance policies if there is no valid beneficiary.

Non-estate assets are those which do not form part of your estate, but instead pass directly to a beneficiary. Any provision in your Will relating to non-estate assets will be invalid. Non-estate assets include:

• assets you own jointly with another person
• assets owned in a private company or trust
• insurance policies where you have nominated a valid beneficiary
• your superannuation if the trustee of the fund can determine a valid beneficiary.

If you have not nominated a beneficiary of your insurance or superannuation, or if your nomination is invalid, then the asset will form part of your estate. It may be prudent, therefore, to include a provision in your Will in the event of this occurring.

Challenging a Will

Your Will can be challenged after your death in certain situations. Examples of these situations include where:

• the Will was not your last Will, or if you changed your Will after it was originally signed
• you did not have mental capacity at the time you signed the Will
• you were forced or pressured into making the Will
• a person you had a responsibility to provide for believes you didn’t leave them a fair share of your assets.

Family provision legislation exists to ensure that certain people are provided for after a person’s death. The list of people who can challenge a Will on these grounds can vary across the States but will usually include your spouse, former spouse, children and step-children. It can also extend to other family members or individuals.

Having your Will drafted by a solicitor can help to reduce the chance of your Will being challenged.

Other things you should know

• Your Will should be reviewed regularly, in particular if there are any changes to your assets (eg purchases or sales) or personal situation (eg marriage, divorce, birth of a child).
• The tax and Centrelink implications of leaving assets to certain beneficiaries should be considered where applicable.
• If you die without a valid Will, you are said to have died ‘intestate’. The distribution of estate assets if you die intestate is determined by state and territory legislation.

For more info don’t hesitate to contact us at [email protected] or call us at 02 9898 6777

Note: This page contains general information which has been prepared without taking into account your objectives, financial situation or need. Before acting on any advice, you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.