REQUIREMENTS FOR A WILL

You must be aged 18 or over to make a will unless:

a)    You are married;

b)    You make your will on the basis that you will marry (i.e. in contemplation of marriage); or

c)    The Supreme Court authorises you to make a will.

You must have “testamentary capacity”. This means that you:

d)    Know what assets you have, and how much they are worth. You don’t have to know their exact value, just enough to be able to decide who should receive them;

e)    Are able to decide who would fairly receive your assets; and

f)    Understand that your spouse and children might need to take priority over other people you may want to leave assets.

If there is a question about a person’s mental capacity, you can ask a doctor to assess competence and attach this to the will. Make sure the doctor is experienced in making these assessments. Since 1998, the Supreme Court can authorise a will for a person who does not have “testamentary capacity”. The rules and processes about this are complex.

A Will can include:

a)    Assets, such as houses, cars, money, shares, cash, etc;

b)    Rights and powers, such as the right to appoint the trustee of a family trust and;

c)    Specific belongings, such as a violin, paintings, books, etc.

Some assets, such as superannuation and life insurance, cannot be distributed in a will. For example, a superannuation benefit may go directly to the person nominated to the superannuation fund. If you have a superannuation entitlement, make sure you get in touch with the fund to nominate the people that you want to benefit.  

FAMILY HOME

If the house is registered in your name, you can put it in the will. If you own it with another person, such as your spouse, you may own it in two possible ways:  

JOINTLY

This is the most common way of owning property and you would be a “joint proprietor” with the other person; or  

TENANTS IN COMMON

This does not mean that you are tenants; it means that you each own a certain percentage of the property (usually 50%) and you can deal with your holding.

If you own your home as a joint proprietor, then when you die, the home automatically passes to the other joint proprietor. It makes no difference whether you have a will or not. However, if you own your home as tenants in common, you can leave your holding to whomever you want in the will.

If you own your home as a joint proprietor and wish to leave your share of the property in the will, you will need to have the title changed.  

BENEFICIARIES

You can leave your assets to whomever you want, including charities and not-for-profit organizations. It is important to leave enough assets to the people who depend on you so they can survive after you are gone. If you do not, they may be able to take legal action to get a bigger share of your assets after you are dead. If you leave assets to a person under 18, those assets will be in trust until they turn 18.  

DEBTS & LIABILITIES

Unfortunately for those who survive you, any debts that you have while you are alive remain as debts.

Anyone who can prove you owed them money can make a claim from the assets you leave in your will. This will happen even if you do not mention the debt in your will. If you do have debts, it is a good idea to say that you want them paid out of your estate before distributing your assets. Otherwise, a person who inherits an asset with a debt, for example property with a mortgage, may not be getting the amount that you intended.  

LEGAL EXPRESSIONS

BENEFICIARY     A person who receives something from an estate

EXECUTOR     The person who is responsible for administering a will

GUARDIAN     The person that you would like to look after your children.This is only a statement of preference by you; the decision of who cares for your children is made under family law principles.

TESTATOR     The person who makes the will. This person is the “will-maker”.

TRUSTEE     A person who administers a trust established under a will, e.g. a trust for children.
 

EXECUTORS

An executor is the person who manages the distribution of your assets after you die and some of the tasks include:

a)    Responsibility for funeral;

b)    Obtaining probate;

c)    Collecting any debts or investment income;

d)    Claiming life insurance;

e)    Protecting and insuring any assets of the estate;

f)    Selling assets, and

g)    Distributing the remainder on the estate

MAKING A WILL

A will must be in writing (hand-written or typed). If it is hand-written, use the same pen or pencil for the whole will.

You must sign at the end of the will. If you cannot write your name, a mark or your initials will be enough. If you cannot make a mark, another person, including one of the witnesses can sign the will, as long as this person signs in your presence and with your permission.

The two people, who see you sign or make your mark, must witness your signature or mark. They must be together when they sign as your witnesses and should sign with the same pen you use to sign or make your mark.

One of the traps that some people fall into is that they make a list of belongings they want left to certain people and it is not part of the will. Even though the list may be useful, unless it is part of the will it may not be enforceable.

The Wills Act allows the Supreme Court to verify a will, even if you get some of the formalities wrong. What is important is the person’s intention, i.e. that they intended to make the will.  

SAFE CUSTODY OF THE WILL

Keep your will in a safe place. If a Lawyer makes the will, ask them to keep it at their office and to give you a copy. It is a good idea to make a copy of the will, give it to your executor, and tell them where the original is. If you do not want the executor to know the contents of your will, place it in a sealed envelope before you give it to them.  

CHANGING & REVOKING A WILL

Of course, your circumstances will change. You cannot assume the present needs of your children will be their future needs, you may not own the same assets in one year that you own in another, and you might marry, separate, divorce, anything. There are many reasons for changing your will.

You can change your will by making a codicil to your current will. A codicil is a legal addition to the will. There are special rules about codicils. A codicil must be, signed and witnessed in the same way as a will.

Your revoke the will you marry, or remarry, destroy the original, write something, either separately or on the will, so that it is clear that you intended to cancel the will, or you make a valid new will.  

CHALLENGING A WILL

A will can be challenged after you die if:

a)    You did not have the testamentary capacity to make a will at the time it was signed;

b)    You did not make the will freely, or your decisions were influenced by others; or

c)    A person you had a “responsibility” to provide for believes you have not left them a fair share of your assets. The term “responsibility” is included in the Wills Act. It is not defined, but obvious examples include, de-facto and some family members. If your will is valid, but a person who believes you owed a responsibility to provide for them is unhappy with their share, they can make Testator’s Family Maintenance claim in the Supreme Court within six months of the date that probate is granted, i.e. the date that the will is proved to be legally valid. The court looks at:

    i)    Whether the person who died had a responsibility to provide for the person who is making the claim

    ii)    Was adequate provision made for this person, if not, what provision should be made?  

MINIMISE THE RISK OF A CHALLENGE

It is important to give your spouse and children, including children born outside your marriage, a fair share of the assets – especially if they depend on you for support.

If you are determined to leave substantially more of your assets to one person in particular, or you want to give those person assets while you are alive, you should get legal advice to avoid any possible challenges.  

INTESTACY

If you die without making a valid will, you leave what is known as "intestacy". In other words, you have not validly disposed of some or all of your assets. Many people believe the Government takes their assets if they die without a will. This is not true. It could only happen if you have no living next of kin. However, if you die without a will, your assets will be distributed according to a legal formula. This might mean that your assets do not end up with the person you would have chosen. It also means that you have no control over who distributes your assets.  

DE-FACTO PARTNERS AND THEIR CHILDREN

A de facto spouse (or domestic partner) is a partner who you treat as your spouse, but who you are not legally married. If you die without a valid will, your de facto spouse will not inherit any of your assets. This is another good reason why it is important to have a valid will.

As far as your children are concerned, they do not have to be born from a legal marriage to share in the distribution of your assets. All your children share equally in your assets if you die without a will. The rules for distributing assets where there is no will are in the Administration and Probate Act. These rules use a formula to distribute assets based on the family that you have left behind.  

ESTATE PLANNING

This is a way of ensuring that a person’s estate is passed onto their beneficiaries in the most financially efficient and tax effective way possible. Estate planning has two main aims:

1    To try and avoid the likelihood of any next of kin suffering financially; and

2    To minimise the risk of family disputes.  

USING TRUSTS

Leaving assets directly to another person is only one way of distributing assets through a will; however, creating trusts may be quite strategic in your estate plan. Trusts allow a person to transfer assets out of their name while still keeping control of the assets.

One of the options often considered in estate planning is to include a testamentary trust in the will as the advantages include:

a)    Ensuring that assets pass to children even if a surviving spouse remarries;

b)    Capital gains tax and income tax advantages;

c)    Providing for children with an intellectual disability or mental illness; and

d)    Protecting assets where a beneficiary becomes bankrupt.

NEED MORE INFORMATION

Behan Legal assists and advises on these important issues. For an appointment call 03 9646 0344.