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FAQ’s on Estate Planning

While not many people are likely to nominate estate planning [aka “thinking about how my assets will be dealt with when I die, or suffer impaired capacity”] as being on their “most wanted things to do” list, this is something that should be on all our “must do” lists.

Proactively planning for how you would like your assets distributed after your death can save many hours of heartache and stress for friends and family, and can also aid in ensuring that the assets you have spent a lifetime accumulating are not eaten up by costly legal proceedings after your death which arise simply because insufficient direction has been left as to how you wish your estate to be divided.

To help you to get started we set out below some of the most common questions that arise when considering planning for your estate.

What is a ‘Last Will & Testament’?

A ‘Last Will & Testament’ (usually simply referred to as a Will) is a written record of how you would like your assets distributed after your death. A Will is entirely different to a Power of Attorney (“POA”). A POA allows a person or company to manage your assets while you are alive. A legal Will is the only way to provide for how to deal with the assets you own after your death.

I don’t own very much, do I really need to have a Will?

The short answer to this question is ‘YES’, for a number of reasons.

Firstly, having a Will gives you peace of mind that you have made your wishes clear and that your assets will be administered and distributed in accordance with your wishes.

Secondly, regardless of the size of your estate, you do not want costly legal disputes to end up eating into those assets. This can be particularly important if the assets of an estate are relatively modest. Disputes between would be beneficiaries quickly eat up an estate and it is all too possible that very little of an estate will be left for the beneficiaries if this occurs.

Also, bear in mind that what you own on your death may include life insurance and/or superannuation proceeds, which now commonly exceed all parties’ other assets.

I made a Will some years ago but do I usually need to update it?

Even though a Will does not generally have an expiration date it is sensible to consider reviewing your Will periodically, particularly if your personal circumstances or those of your family change. It is very important to review your Will to take into account those changes.

Important life changes such as marriage, divorce, the birth of children and any change in personal financial circumstances such as receiving an inheritance or buying a property are also relevant milestone points at which to consider updating a Will.

We recommend clients consider their will every 3 – 5 years.

It is important to seek legal advice prior to updating a Will. Sometimes the implications of a seemingly minor change to a Will are not always readily apparent, and it is also important that any amendments to the Will are properly documented, signed and witnessed to ensure a Will remains valid.  Do not just annotate comments or changes onto the will you had prepared some years ago and initial them, hoping this will suffice! 

Are there rules about who I must leave my assets to?

While in theory you are able to prepare a Will leaving your estate to whomever you please, (even a home for stray cats) in reality it is very important to seek legal advice on this point.

Relevant matters may include whether you have any infant children or other dependents. In situations involving blended families or estranged children careful consideration also needs to be given to the likely impact of leaving individuals out of a Will, and whether this is likely to lead to a costly legal dispute and contest about the Will.

Who should I appoint as my Executor?

The role of an Executor carries with it great responsibility and while it can be tempting to choose your best friend or eldest child simply because it seems the right thing to do, it is important to consider whether the person you are thinking of naming as Executor has the capacity to carry out the role.

The duties of an executor can include everything from arranging the funeral to managing the assets of the Estate and obtaining probate. Depending on the size of the estate, debts may need to be paid, or a business controlled or conducted, and the tricky waters of any potential dispute in respect of the Will may need to be navigated.

In circumstances where there is a potential for conflict between family and friends it may be sensible to consider appointing an independent Executor as well as or instead of a family member or friend. This can assist in ensuring the estate is dealt with fairly and without favour or conflict and also means the burden of the Executor’s role does not rest with a loved one who may not be up to the task.

The downside to appointing an independent Executor can be that considerable fees may be incurred, depending on who or what organisation is appointed. Again, this is a matter where proactive legal advice can be of great assistance in determining the best way forward.

What happens if I die without a Will?

If you die without a Will you are said to have died ‘intestate’. If this occurs your assets will be distributed according to the relevant State law. This will of course be outside your control and may mean that your assets are not distributed in the way that you would have liked.

Can a Will be disputed or changed after I die?

It is possible that even with the most careful planning someone may wish to challenge your Will. If a Court finds that you did not make adequate arrangements for a person for who you have responsibility, such as a dependent family member, then it may vary or overturn your Will and put in place alternative arrangements for the distribution of your assets. Depending on where you live this could potentially occur even if the claim is by a non-family member.

Another basis on which a Will can be overturned is if a Court were to find that you were not of ‘sound mind’ when you made the Will. Being of ‘sound mind’ means that you had sufficient intellectual and physical capacity to make a Will. Matters that will impact on the question of ‘sound mind’ will be whether the person making the Will had an intellectual impairment or disability or suffered from memory loss, dementia or some other serious illness.

A validly prepared, properly witnessed and current Will is a good step in the right direction in ensuring that your assets are distributed how you wish and to whom you wish after your death. A carefully drafted Will can also aid in reducing the likelihood of a successful challenge as to how you choose to distribute your estate.

The potential fall-out from a poorly prepared Will is significant both in dollar and personal terms. We strongly recommend that you seek legal advice before preparing or updating your Will.

This is an area of law that we have considerable experience in and we are happy to discuss any questions you may have.

If you or someone you know wants more information or needs help or advice, please contact us on (07) 5443 4866 or email kwaddington@gwlaw.com.au.

 

Ken Waddington

Partner

(07) 5443 4866

kwaddington@gwlaw.com.au

If you need help, or have a question get in touch with us today.