WHERE THERES A WILL
Not many people plan to die without leaving a valid Will. However the sad reality is that quite a few do.
Not only is it possible, to be hit by the proverbial bus at any time and die, it is also possible that you wont die before suffering a stroke or dementia or Alzheimers and, so may be left without the testamentary capacity to make or alter a Will.
Even if you do make a Will it is possible that it can be challenged in the courts. A challenger could question whether you understood the matters to be considered in making a Will, the Will might not meet the required formalities or a relative may simply not be happy with what they have or have not been given.
In most states including NSW, a Will is revoked upon marriage and in some it is revoked by a divorce. So, if you have made a Will prior to being married or divorced it will most likely not be valid after that event unless the Will expressly provides that it was made in contemplation of that event and is not to be revoked.
If someone dies without leaving a valid Will, they are deemed intestate and the estate will be divided up according to a pre-determined distribution to beneficiaries prescribed in legislation.
Each state and territory has its own legislation and formula for such a distribution. The prescribed formula is inflexible and worse – in many states it may not been updated for decades! As a result of this, the monetary amounts in the legislation can be inadequate by today’s standards.
An example of this under the WA legislation is where a married person with two children dies, the widowed spouse would receive $50,000 and one third of the balance of the assets, the two children would also get one third of the balance each. So the widowed spouse only receives $50,000 more than the children from the estate!
To sum up, if you have not yet made a Will, there is no time like the present.
If you have a Will, make sure it is valid and that it reflects your current wishes. It is also important that if you go to the effort of deciding to make a Will, that it is a valid Will and will not fail.
Rather than using a Will kit, which are generally rigid in structure to accommodate only basic dispositions, it is best to get more specialised advice to ensure your Will is as water-tight as it can be. In law, certain words have specific meanings – incorrect use can cause problems in carrying out your intentions.
Please note that no one can guarantee that your Will won’t be challenged. Whilst it is your right to dispose of the assets in your estate according to your preferences, this is subject to one big IF that IF is that each state has legislation which creates certain criteria including rights for certain categories of people to challenge a Will if the testator has not made adequate provision for that person in the Will. In order to be successful the challenger needs to establish they meet the criteria and a court then has the discretion to alter the Will.
Having a professionally drafted Will wont necessarily preclude a successful challenge, but it will ensure that you consider all of the important issues that you need to consider in making a Will.
The approach to making your Will depends on many circumstances. These are some:
- Special provisions for education and maintenance for children under age
- Other dependants or possible beneficiaries
- If you have a blended family situation
Divisions of your estate which are to benefit one or more persons to the disadvantage or exclusion of another or others
- A dependant who may have a disability
- A spendthrift or bankrupt beneficiary
- Your superannuation situation
- The spread of your assets and any liabilities
- Assets you have in co-ownership with another person
- Business interests such as companies, trusts, partnerships, joint ventures
- Tax issues, including CGT
- How far you may want to go to protect assets for the benefit of beneficiaries
If your situation is a complex one, including having interests in multiple companies or trusts, or if you think someone may challenge it, if you are not sure if your current Will covers everything it should or if you have not had it reviewed for many years, it is advisable that you make an appointment to see one of our Estate Planning specialists.
Whitelaw McDonald has professionals specialising in Estate Planning, including drafting Wills which take into account issues relating to Tax, Stamp Duty, Trusts, Superannuation and other often forgotten (yet important) issues.
We can also advise on and establish Testamentary Trusts for clients who wish to build one into their Will.
In the case of clients with business interests, we usually will want to discuss your circumstances with your accountant and financial advisor, after having obtained details of your intentions.