A Will is a document that specifies how you would like your assets distributed when you die and the person who will be responsible for managing your assets (your executor).
Nobody likes to think about dying, and sometimes it can come unexpectedly. Having a Will gives you peace of mind that your family and loved ones won’t have the unnecessary burden of having to sort through a messy estate, during a difficult time.
Preparing a Will is the first step to take when planning the distribution of your estate. It enables:
If you die without a Will, an administrator will manage your assets. An administrator will not have the same powers as the executor. If you don’t have a Will or your Will doesn’t cover all of your assets, they will be distributed according to a state-based formula, known as” intestacy rules”. These rules apply to everyone and do not take into account your personal circumstances, or what you might have wanted. Under the state-based intestacy legislation your estate passes to your next of kin, as specified in the formula. If you have no next of kin, your estate assets will go to the State.
Things to remember:
Some assets cannot be left to your beneficiaries in a Will. These are non-estate assets and include superannuation with a binding nomination to an eligible beneficiary, certain insurance policies and jointly held assets. For example, a jointly owned family home cannot be disposed of through a Will. When one owner in a joint tenancy dies, the asset passes automatically to the survivor/s. It makes no difference whether you have a Will or not.
In contrast, assets held under tenancy-in-common are considered assets of an individual’s estate. A tenancy-in-common exists where two or more people hold a distinct share in an asset. When one owner dies, there is no automatic transfer of that share to the other owner/s.
If you own an asset as a joint proprietor, but would like to leave your share of the property in your Will, discuss changing the title to tenants in common with your solicitor. Also discuss any potential tax implications of this with your accountant.
Whoever you want. However, it is important to recognise that if you do not leave sufficient assets to the people who depend on you, they may be able to take legal action to get a bigger share. Speak to your solicitor if you are concerned about this.
If you leave assets to someone under 18, those assets must be held in trust until they turn 18. However, unless other arrangements are made, children can access the funds on their 18th birthday.
An executor is the person who is responsible for carrying out the instructions in your Will. This is a very important job and some of the possible tasks include:
There is no rule about who is the best person to be the executor. It can be your husband/wife, children or any other person who can be trusted to manage the distribution of your assets. It can also be a beneficiary. Things to consider when choosing an executor are:
You should also consider having an alternate executor, in case the first executor is not available or changes their mind.
It’s also possible to appoint two people to act as joint executors. Talk to your solicitor about these options and the pros and cons for each. If you don’t know anyone, or you want someone independent to handle the task, you can appoint a solicitor, accountant or a person from a trustee company.
You can change your Will as your circumstances change. You can’t expect that your present needs will remain the same for the future. Some reasons for changing your Will include:
Your Will is automatically revoked in most states if:
After a divorce, it is important to get legal advice about the status of any existing Will. You should check whether the Will has been cancelled by the divorce, or whether the divorce cancels any distribution to your ex-partner. It may also cancel any appointment of your ex-partner as executor, trustee or guardian. It is important to make a new Will and best to ensure it takes effect as soon as the divorce is final.
You should definitely review your Will when you separate – check this with your solicitor.