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A will is a document that sets out your intentions for your assets after your death. The document also provides instruction as to who is to be charged with the responsibility of carrying out your wishes, also known as your 'executor'.
The person making a will is known as the 'testator', while a person entitled to benefit from a will is known as a 'beneficiary'.
You may review and update your will at any time, however your last signed valid will is that which applies on your death.
Anyone over the age of 18 years and of sound mind should have a valid and up-to-date will. If you die without making a will, everything you own will be distributed according to the law in your State – which means your wishes will be ignored.
Having a valid and up-to-date will should be a central part of your generational planning strategy. This applies irrespective of the size of your estate or how you wish it to be distributed.
Your will provides you with peace of mind knowing that your assets will be managed in the way that you intend. A properly constructed will can assist in preventing any potential legal challenges against your wishes.
While there is no limit on the time that a will remains valid, a review every 3-4 years is recommended.
It is important that reviews are also conducted whenever your circumstances change, if you decide to alter your beneficiaries or if you buy or sell an asset.
Regular reviews of your will ensure that your intentions are still accurately reflected.
Some people think that making a will is something you do once and can then forget about. For most of us, nothing could be further from the truth. The only thing that can be worse than not having a will, is having a will which is no longer relevant to your circumstances.
You should check your will regularly to see that it still reflects your wishes, responsibilities and financial position.
Sometimes it can also be helpful to make a fresh will every few years as this provides a continuous record showing how your wishes and needs have changed as your circumstances warrant. A simple will that is 30 years old, whilst technically valid, may not seem relevant to your family as, say, five wills made approximately six years apart. Recently and regularly updated wills may lend greater support to your wishes than a very old will in the event of a contest.
By regularly reviewing your will, you are actively managing your affairs and ensuring that your loved ones receive the benefit you intend for them. They will also have the comfort of knowing that you have thoughtfully considered and provided for their needs after your death, rather than leaving matters to chance.
Sometimes a will is revoked or rendered invalid by other things you do. For example, your will may be revoked if:
You marry
Marriage generally causes your existing will to be revoked.
You divorce
Depending on the State you live (or die) in, divorce can also alter the effect of your will. In Victoria, for example, your former spouse is treated as having died immediately before you for the purposes of the distribution of your estate.
These laws differ from State to State and it is vital you prepare a new will if you marry, separate or divorce so your wishes can be carried out.
You destroy it
If you deliberately destroy your will (with the intention of revoking it) it will usually be revoked.
You make a new Will
If you make a new Will, previous Wills are usually revoked.
Your Will may be invalid if:
A professional adviser, such as Equity Trustees, will be able to direct you as to what to include in your will.
In making a will, some of the things you should consider are:
1. Asset distribution
2. Who will be the guardian of any infant children
3. Whether you have any specific wishes about your funeral
Burial, cremation, religious service, etc.
4. Whether you wish to donate any organs or other body parts after your death
Do you wish your body to be available for medical teaching purposes
or alternatively for transplant purposes?
5. Consider who should be the executor of your will
The choice of executor is critical to ensure that obligations, legalities and
family issues are handled professionally after your death.
6. Consider what powers your executor should have:
7. Consider the burden that you may be placing on a private executor
The choice of executor is critical to ensure that obligations, legalities and family issues are handled professionally after your death.
Survival - An executor should be someone who is likely to survive you and be willing and able to handle your affairs after your death. Appointing a person of similar age without an appropriate substitute is often not practical. Appointing Equity Trustees guarantees that you will have an executor to survive you.
Experience - Your executor needs to have experience (or access to advisers with experience) in all of the matters listed in Duties of an executor. Equity Trustees has many years of experience in estate planning and management and can help to ensure the smooth and speedy administration of your estate.
Security - It is important to ensure that your executor is able to manage all aspects of your affairs with safety. If a private executor fails to maintain the value of your estate, or fails to transfer it to your beneficiaries, it may be difficult to recoup any loss from his or her personal assets.
When you engage a Trustee Company, such as Equity Trustees, you have far greater assurance that your assets will be properly handled. Trustee Companies have professional indemnity insurance and the resources to meet a claim if assets are lost.
Impartiality - Your executor has a duty to carry out the terms of the will and should not be subjected to pressures from various individuals or groups after your death. Your executor should not be swayed by prejudices and should always ensure that everyone is treated fairly in accordance with the terms of your will.
Discretion - Confidentiality, tact and discretion are three very important attributes of an executor. Often those you leave behind are in an emotionally vulnerable state and it helps if your executor has the necessary experience to deal with any issues in a supportive fashion.
Where there is discretion to distribute income or assets provided in the will, your executor should also be able to balance the interests of the various beneficiaries.
Peace of mind - Knowing that your estate will be administered professionally, with a desire to maintain family unity and harmony.
The duties of the executor can include the following:
If a Trustee Company (such as Equity Trustees) is engaged as your executor rather than a family member or friend, you have far greater assurance that your assets will be properly dealt with. Trustee companies are regulated by legislation and are required to maintain numerous safeguards to provide you with comfort and protection. Choosing Equity Trustees as your executor will give you peace of mind that your estate will be administered professionally, while maintaining family unity and harmony.
Anyone who passes away without a will is said to have died 'intestate'. In such cases the assets belonging to the deceased are distributed according to State law. It is possible that such laws will not be consistent with your wishes and consequently those who you wish to benefit from your estate might not do so.
The law is based on what is likely to be suitable distribution of your assets – and this might work for some people. However, it may be unsuitable to you and your loved ones in some circumstances. For example:
This is also commonly known as having 'testamentary capacity'. You may not have testamentary capacity if you suffer from one of the following:
Doubt may also be cast over your capacity if you are of advancing years.
If there is any concern about an individual’s capacity to make a will, it is essential that medical opinion is sought and that details be properly recorded at the time the will is made.
Under the Testator’s Family Maintenance law, your will can be altered or overturned by a court if you have failed to make adequate provision for someone the court considers you had responsibility to make provision for. In some States (including Victoria) this might include non-family members.
Wills can also be contested if executed incorrectly or if the testator was not of sound mind or acted under pressure from others when making their will. Any dispute over your will is almost certain to result in depletion of your estate and a delay in the distribution of your assets. This may cause inconvenience, or even hardship, for your loved ones.
By ensuring that your will is valid, current and has been drawn up by a professional, such as Equity Trustees, you can avoid challenges to your will. A professional will advise you on the most effective means of distributing your assets and ways in which assets can be protected - for example, through the establishment of a trust.
A Power of Attorney appoints a person or company to manage your assets on your behalf whilst you are alive and is a separate legal document from a will. A will addresses your assets only when you have passed away. Click here to read more about establishing a Power of Attorney.
Trusts can be an effective means of providing for specific purposes and for protecting assets from parties you do not want to benefit from your will. A trust established in a will is known as a 'testamentary trust'.
Testamentary trusts include:
Properly constructed trusts can also be a tax effective means of distributing assets - including to charitable institutions.
In electing to establish a trust it is important that consideration is given to the manner in which the trust will operate and, most importantly, whom you wish to manage the trust (also known as the 'trustee').
Thought should be given to choosing a trustee who will survive you and who has the experience and expertise to take on the role.
You can choose to nominate a single trustee or multiple trustees to co-manage the trust (also known as 'co-trustees').
Equity Trustees recommends that expert advice be sought to ensure that the trust structure is appropriate.