The importance of making a Will shouldn’t be underestimated. While we all live very busy lives and seem to become more and more time poor as the days go by, we must make a concerted effort to prioritise the things that really matter – and making a Will should certainly be a priority for all of us!
During what will inevitably be an extremely distressing and emotional time, the death of a family member or friend is made that little bit easier when a Will has been made. Understandably, most of us don’t like to think about our eventual death – what will happen to our children, how our property will be dealt with and by who. However, the reality is that by leaving a Will, we can give ourselves and our family the peace of mind that our affairs are all in order and will be managed in accordance with our wishes upon our death.
What is a Will?
A Will is a legal document which details your instructions as to how your property is to be distributed after your death. You, as the person making the Will, are referred to as the Testator. In circumstances where you have children, you may also like to detail in your Will, your wishes in relation to the future living and care arrangements for your children, should you pass before they attain the age of 18 years. The person(s) receiving your property are called Beneficiaries. In addition to identifying the Beneficiaries in your Will, you will also appoint your Executor(s) who will be the person(s) responsible for ensuring that your property is distributed in accordance with your wishes. The role of Executor is usually appointed to a spouse, trusted family member or close friend.
What is included in a Will?
The type of matters that should be addressed in your Will include, but are not limited to, the following:
- How your property will be distributed upon your death – noting that your property comprises all assets such as your home, investments, other property, shares, trusts, superannuation interest(s), employment entitlements, mutual funds, motor vehicles, bank accounts, furniture and effects, personal belongings etc.
- Who you wish to be appointed as Guardian(s) to care for your children – this may help to avoid any potential disputes between family members by making your intentions clear. If not expressly nominated by you in your Will, the issue of guardianship may be determined by a Court, having regard to the children’s best interests at that time.
- Your personal wishes in relation to such matters as your funeral, burial, cremation and organ donations.
- Any personal messages or specific bequests.
What if I don’t have a Will?
The difficulty with consciously choosing not to make a Will, or otherwise procrastinating until it is too late is that if you do die without leaving a valid Will, you are said to die intestate and the distribution of your property is determined by a statutory formula regardless of any wishes you may have previously expressed to family and/or friends. This can, and often does, result in a person’s property being dealt with in a way which may be entirely inconsistent with their wishes. The Succession Act 2006 (NSW) prescribes that if you die intestate, your property will be distributed to the following people, in the following order:
- Your spouse
- Your children
- Your parents
- Your siblings (whole or half blood, or if predeceased, any nieces and nephews)
- Your grandparents
- Your aunts and uncles (whole or half blood, or if predeceased, any surviving cousins).
The way the formula works is that if a priority category does not exist or cannot be identified, the formula progresses to the next category until an eligible relative is found. If no eligible relative can be identified, then your property (or estate) will pass to the State. Significantly, if it is your intention to leave your property to a friend or charity, it is very important to have such direction made in your Will, as the intestate formula does not make provision of distribution to any non-family members.
What about significant life events?
Certain significant life events may effect a Will, such as marriage and divorce. For example, unless a Will is specifically drafted in contemplation of marriage, then the marriage will revoke the Will. Similarly, in the case of divorce, unless specifically dealt with in the Will, a divorce will have the effect of invalidating any gift to the former spouse, and any appointment of the former spouse as Executor would be taken to be omitted from the Will. Accordingly, it is recommended that people review the terms of their Will at regular intervals throughout their lives, including upon the birth of children, the death of named Beneficiaries and in other circumstances where the nature and/or value of your property interests may have changed significantly.
Tick it off your to-do list
Generally, the preparation, drafting and execution of a Will is a fairly straightforward and cost-effective process which will provide you and your loved ones with the comfort and clarity of understanding your wishes in the event of your death. Conversely, if you pass without leaving a valid Will, your loved ones may be left with the significant emotional and financial burden of organising the administration and distribution of your estate.
In today’s society, families come in many different shapes and sizes. Every individual’s Will should be as unique as they are. In more complex circumstances, where a person may have multiple spouses and/or multiple children from different relationships, the terms of the Will should be very carefully considered and drafted, so as to avoid the terms being too vague or uncertain. Issues may arise when including or excluding a spouse or children from former relationships.
While you are certainly at liberty to prepare your own Will, it would be advisable to obtain some independent legal advice in relation to the options available to you and the effect of your Will, particularly where there may be more complex or complicating factors involved such as the implementation of schedules for use in blended families and the creation of multiple testamentary discretionary trusts. It is also prudent to consult with your Taxation Adviser in relation to any potential taxation implications arising under your Will.
As with other legal matters, my advice is to try not to let your thoughts of preparing a Will overwhelm you or cause you to further procrastinate! Embark upon the process in a logical manner, one step at a time. Think about the nature of your property and how you would like that property distributed upon your death, who you trust to ensure that your property is distributed in accordance with your wishes and be sure to seek advice if you have any questions or concerns about the process. Of paramount importance is just finding the will to make your Will!
