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Wills are like most other legal documents, people have a general idea of what they are about but they may feel daunted by the details and do not fully understand who should make a Will, when one should be made and what should be included. In our 8-part series, we hope to shed light on commonly unknown issues relating to Wills.
According to research by the Western Australian Public Trustee, more than half of Australians either do not have a Will or do not have a Will which is effective on death. If you pass away without a Will, the law in the state where you live will determine who is responsible for distributing assets you own and who will receive these assets. This means that you will have had no control over who is in charge of distributing your assets and your assets may not be received by the people that you would have chosen.
Even if you have a Will, your Will may be invalid if it has not been properly completed. A Will may be invalid due to common mistakes such as not having a proper witness or deeper issues such as someone having undue influence on the content. We encourage everyone to document their wishes in a valid Will.
People often think that making a Will is something that you only need to do once. This is a common, but serious misconception about Wills. Many life events can have a significant impact on your Will. These include:
By way of example, when a person marries, any existing Will that that they have in place is automatically revoked, unless the Will has been made in contemplation of marriage.
In the case of a person divorcing, certain parts of an existing Will are revoked by the divorce. Any clauses in a Will that provide a gift or beneficial interest to a former spouse are revoked by divorce as are any clauses appointing a former spouse as an executor, trustee or guardian.
It is advisable to review your Will every 2-3 years, or whenever you experience any of the above mentioned life events to ensure that it still reflects your intentions. We are able to help you if you have an existing Will which needs to be updated.
Many people think that they do not need to make a Will if they don’t own any property or don’t have much money. However, Queensland law requires that all deceased estates must be properly administered, no matter how large or small the estate.
Common items that people do not realise form part of their estate include:
In addition to setting out who receives your assets your Will can also:
It is advisable for everyone to have a Will in place, regardless of their financial circumstances.
Many people believe that if they have a Will, it covers all their assets. However, some assets aren’t automatically covered by your Will; superannuation is one of these assets. Your superannuation is held by the trustee of your superannuation fund and there are special rules that govern how a trustee can distribute your superannuation after you die.
Your superannuation fund may permit you to make what is called a binding death nomination, which allows you to determine who will receive your superannuation after you die. In a binding death nomination you can nominate for your superannuation to be paid to your estate, in which case your superannuation will then be distributed in accordance with the terms of your Will. Alternatively, you can make a binding death nomination nominating a spouse, child or other dependant to be the beneficiary of your superannuation, in which case your superannuation will simply be paid directly to the nominated beneficiary. If your superannuation fund does not allow you to make a binding death nomination or you choose not to make a binding death nomination, then the trustee will decide whether to pay your superannuation to your estate, to then be dealt with by your Will, or whether to pay your superannuation directly to a spouse, child or dependant.
When making or reviewing a Will it is therefore important to also make or review any nominations that you may have made with respect to your superannuation.
An executor is the person who you appoint to be responsible for carrying out the wishes in your Will. When choosing an executor, it is a good idea to also name an alternate or back up executor in case your first executor is unable to act as your executor or does not want to become an executor.
When choosing who you want to have act as your executor or alternate executor you should consider the following:
Keeping in mind the above, you can choose anyone who is over the age of 18 years to become your executor, including your spouse, partner or children. An executor of your Will can also be a beneficiary under your Will.
It’s also possible to appoint two people to act as joint executors. If you are having difficulty choosing an executor, or you want someone independent, you can appoint a solicitor, accountant or a person from a trustee company.
If you own a home it may be owned as joint tenants or tenants in common. It is important to understand the difference between these two forms of ownership, as the form of ownership will have an impact on your estate planning.
If you own the family home jointly with another person as joint tenants, the property will automatically go to the co-owner upon your death, rather than forming part of your estate and being dealt with by your Will. Owning a property as joint tenants can be useful if you believe that there is a risk that someone may apply to the Court and contest your Will and seek further provision from your estate upon your death. Owning a property as joint tenants effectively guarantees that the property will go to the co-owner if they survive you and protects the property from falling into your estate and being subject to any claim that may be made.
If however you own the family home jointly with another person as tenants in common, your share of the property will not automatically go to the co-owner on your death, rather, it will form part of your estate and will be distributed in accordance with your Will. Similarly, on the death of the co-owner, you will not automatically receive their share of the property, it will be dealt with by their Will, or the rules of intestacy if they don’t have a Will, and you may end up owning the property with someone you did not initially intend to own the property with.
It is easy to find out whether a property is owned as a joint tenancy or tenants in common. This can be determined by reviewing the title deed for the property or alternatively by completing a title search.
It can be overwhelming to think about who would care for your children if you were to pass away. However, by making a Will you can appoint a person to be the testamentary guardian of your children and therefore have peace of mind in this regard.
A testamentary guardian is responsible for making decisions about the long term care, welfare and development of your children, as well as having daily responsibility for your children’s care. If the other natural parent of your children has also passed away then the appointed guardian will be in the same position as a parent and if someone disagrees with the appointment, they must apply through a court process to challenge the appointment. In the event that the other natural parent of your children is still alive then you may still appoint a guardian however the other natural parent may apply to have the guardian you have appointed removed if they do not agree with the appointment.
If you do not appoint a guardian under your Will then your family members will be left to decide who will care for your children. If agreement cannot be reached it may become necessary for an application to be made to the Court and the Court will decide who will care for your children.
It is important to consider a number of matters when appointing a Testamentary Guardian. Some matters to be considered include the following:
In certain circumstances if you have excluded someone from your Will or not made sufficient provision for someone in your Will, your Will may be able to be contested by way of a family provision application.
In Queensland a family provision application can only be made a spouse, child or dependent. The terms spouse, child and dependant are defined by the law and defined quite broadly. For example, the term spouse includes a husband, wife, defacto partner, registered partner, former husband, former wife and former registered partner while the term child includes a biological child, unborn child, legally adopted child and step child.
A Court can take various matters into consideration in determining whether the terms of a Will should be varied so that provision is made for a person making a family provision application.
These considerations include, but are not limited to
There are various ways to minimise the risk of someone contesting your Will by making a family provision application and it is best if you obtain legal advice if you are considering excluding a spouse, child or dependent from your Will.
This information is intended as general legal information only for people living in Queensland and is not a substitute for individual legal advice.
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I wanted to thank you Joanne for all your work and effort on behalf of my family and I. Everyone at New Way Lawyers has been very helpful and made an unfamiliar process relatively easy for me. Thanks so much for everything. All the best.
BA, 31 January 2017
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