With the year now in full swing, it’s time to reflect on those New Year’s resolutions or set about establishing goals you would like to achieve over the year. While this often revolves around health and fitness, financial related matters are generally a firm second.
It may not be something many of us like to think about but this could include how your family and loved ones will be provided for when you die. Making sure you have a valid and up to date Will is an important part of planning for your family’s future.
If you have appropriate advice the development of an effective Will is generally something that can be done quickly and easily, and once done it will provide certainty and confidence that your family will be provided for in the future.
We can’t see the future and we can’t predict unfortunate circumstances but we can plan for them, and we can help to make them easier for our loved ones.
What happens if I don’t have a Will?
Should you pass away without a valid Will:
- The administration of your estate may be unnecessarily complicated for your surviving family members who may need to work through the courts to have your estate administered.
- The distribution of your estate will be undertaken in line with a legislated formula that may not reflect your wishes.
If you pass without a Will your property will be distributed according to the laws of the State or Territory in which you lived at the time of your death. Similarly, if you have children under the age of 18, they will have a guardian appointed to them by the State. In most cases any such arrangements will not be entirely consistent with your wishes or desires.
Benefits of having a Will
The key benefits of having a Will include being able to:
- Appoint one or more people you know and trust to be the executor of your estate.
- Nominate guardians for any of your children who are under 18.
- Specify exactly where and how your estate gets distributed and to whom.
- Allocate specific gifts to particular people or organisations (e.g. charities).
- Make specific directions about your funeral arrangements or the way you would like your body to be treated after death (e.g. to be buried or cremated).
In addition the administration of your estate will generally be more efficient and less stressful if you have a clearly drafted Will.
What happens if I don’t have a valid or up to date Will?
If you already have a Will, then congratulations on being organised! But have you reviewed it recently? Unfortunately, if you have a Will which is old, not clearly drafted or incomplete the document may be subject to legal challenge or may not reflect your current circumstances or wishes. Ideally you should review your Will every three to five years to make sure it still reflects your current wishes.
It is also important to review the document when any of the following events occur:
- A change in your family (e.g. marriage, divorce, children).
- A change in assets (e.g. you come into a large sum of money, acquire a significant asset or start running a family business).
- A change in the capacity or circumstances of key people (e.g. a family member needs long-term medical care or special assistance, your executor dies or loses capacity).
- A change in location (e.g. you move to a different state or country with different inheritance and estate laws).
- A change of heart (e.g. you want to add or remove a gift to a particular friend or relative, you want to provide a gift to a charity).
Three things you may not know about Wills
- Superannuation – Superannuation death benefits cannot be dealt with directly in a Will. However, depending the rules of on your fund, you may be able to make a separate Binding Nomination to make sure any death benefit is distributed in accordance with your wishes.
- Effect of marriage and divorce – In Victoria marriage has the effect of revoking any previous Wills other than those specifically and expressly made “in contemplation of marriage”. Divorce, on the other hand, doesn’t revoke an existing Will however, unless a contrary intention is shown, any appointment of your former spouse as an executor and any gift you have left them are automatically revoked.
- Execution requirements – To be valid a Will needs to be signed by the Will-maker and witnessed by at least two people. Each page also needs to be signed by the Will-maker and the witnesses and everyone needs to sign in each other’s presence.
Most of us know the importance of having a Will. We put it on the ‘to-do’ list, then life gets in the way and we haven’t made a plan to get one in place.
We plan to buy a house and we invest time into making that house our home. We start a family and we do everything in life to protect them because the thought of losing them is too much to bear.
But do we give much thought to the question; if they lost you? While it’s doubtful that anyone’s New Year’s resolution was specifically to go out a get a Will, the comfort of knowing its been taken care of may be just as gratifying.