Many people assume that a Will is only necessary for older people, parents or those with substantial wealth. In practice, almost every Australian adult can benefit from having a valid and current Will.
A Will provides instructions about who should receive your estate, who should administer it and how particular responsibilities should be managed after your death. Without a valid Will, legislation determines how your estate is distributed.
Those statutory rules may not reflect your relationships, promises, personal priorities or family circumstances.
A Will gives you control over your estate
A Will allows you to identify the people or organisations you want to benefit.
Depending on your circumstances, this may include:
- a spouse or de facto partner;
- children or grandchildren;
- relatives;
- friends;
- charities;
- community organisations; or
- other people who are important to you.
You can leave particular assets to named beneficiaries, divide the balance of your estate in stated proportions and provide alternatives if someone dies before you.
Without a valid Will, your assets are distributed under intestacy legislation. The outcome depends on your family circumstances and may not match what you would have chosen.
You can appoint the right executor
A Will enables you to nominate an executor to administer your estate.
The executor’s responsibilities may include:
- locating and protecting assets;
- applying for probate;
- identifying and paying debts;
- dealing with taxation;
- maintaining estate records;
- responding to claims;
- selling or transferring property; and
- distributing the estate to beneficiaries.
The executor should be trustworthy, organised and capable of managing financial, legal and family issues.
You can appoint more than one executor and nominate substitutes if your first choice cannot or does not wish to act.
Where there is no valid Will, an eligible person may need to apply to the Court for authority to administer the estate. This can create delay and uncertainty about who should take responsibility.
Parents can record guardianship wishes
Parents of children under 18 can use their Wills to record who they would like to care for their children if both parents die.
The Court retains responsibility for determining what is in a child’s best interests, but a testamentary guardianship appointment provides important evidence of the parents’ wishes.
A Will can also establish arrangements for managing a child’s inheritance.
Rather than giving a young beneficiary unrestricted access at an early age, funds may be held on trust and applied for education, accommodation, healthcare and general support until the beneficiary reaches a specified age.
Young adults need Wills too
A person does not need to own a house or have children before making a Will.
A younger adult may already have:
- savings;
- superannuation;
- life insurance;
- investments;
- a motor vehicle;
- cryptocurrency;
- digital assets;
- business interests;
- valuable personal items; or
- rights under a trust or deceased estate.
They may also want to provide for a partner, sibling, friend or charity who would not otherwise receive anything under the intestacy rules.
Unexpected illness or accident can occur at any age. Preparing a Will early is generally simpler than leaving family members to deal with uncertainty later.
Not every asset passes under a Will
A Will controls assets forming part of the deceased estate, but some assets may pass under separate arrangements.
Examples can include:
- jointly owned property;
- superannuation death benefits;
- life insurance paid directly to a nominated beneficiary;
- assets held in trusts;
- company-owned property; and
- accounts with survivorship arrangements.
Jointly owned assets may pass automatically to the surviving owner. Superannuation is generally dealt with under the fund rules and any valid death benefit nomination.
A proper estate plan should therefore consider the Will together with asset ownership, superannuation nominations, trusts, companies and insurance arrangements.
Business owners require coordinated planning
Business owners should ensure that their Will works with their business structure and succession arrangements.
Relevant interests may include:
- company shares;
- partnership interests;
- business assets owned personally;
- loans to or from the business;
- intellectual property;
- personal guarantees;
- shareholder agreements;
- buy/sell arrangements; and
- control of related trusts or companies.
A Will does not necessarily override a shareholder agreement, partnership agreement, company constitution or trust deed.
Business succession and estate planning should therefore be reviewed together.
De facto and blended families need particular care
Modern family arrangements can create complicated estate outcomes.
A person may have a current spouse, de facto partner, children from an earlier relationship, stepchildren, estranged relatives or financially dependent family members.
The intestacy rules may not distribute the estate in the way the deceased would have intended.
Blended families may need to balance the interests of a surviving partner with those of children from an earlier relationship. Leaving everything outright to one person may not achieve that balance.
A carefully prepared Will can provide more tailored arrangements.
A Will can provide for pets
Pets cannot receive an inheritance directly, but a Will can identify a preferred carer and provide funds to assist with ongoing expenses.
The proposed carer should be consulted before the Will is signed. An alternative should also be nominated in case the first person cannot take responsibility.
Care instructions, veterinary details and information about medication or routines can be kept in a separate memorandum that is easier to update than the Will itself.
Charitable gifts can be included
A Will can provide gifts to charities, schools, medical research bodies, religious organisations or community groups.
The gift may be:
- a fixed amount;
- a percentage of the estate;
- a specific asset;
- the balance of the estate; or
- a gift for a stated purpose.
The organisation should be identified accurately so that the executor can administer the gift without unnecessary uncertainty.
An outdated Will can be almost as problematic as no Will
A Will should be reviewed after major life events, including:
- marriage;
- separation or divorce;
- entering or ending a de facto relationship;
- the birth or adoption of a child;
- the death of an executor or beneficiary;
- purchasing or selling property;
- receiving an inheritance;
- acquiring or selling a business;
- establishing or restructuring a trust;
- changes in wealth; or
- changes to superannuation arrangements.
A review does not always mean that a new Will is required. It does ensure that the existing document still reflects current circumstances and intentions.
Estate planning should also address incapacity
A Will operates after death. It does not authorise another person to make decisions while you are alive but unable to manage your affairs.
A broader estate plan may also include:
- an enduring power of attorney;
- an appointment of medical treatment decision maker;
- an advance care directive;
- superannuation nominations; and
- arrangements for business or trust control.
These documents serve different purposes and should work together.
Parke Lawyers assists individuals and families with wills and estate planning, including Wills, testamentary trusts, powers of attorney and succession arrangements.
A Will provides clarity
Making a Will is not only about distributing wealth.
It allows you to choose who will administer your estate, identify the people you want to benefit and provide guidance about important family, financial and personal responsibilities.
The absence of a Will does not mean there is no estate plan. It means the statutory intestacy rules become the plan.
Preparing a valid Will and keeping it current can provide greater certainty for both you and the people who may eventually need to administer your estate.
This article provides general information only and is not legal advice. Anyone preparing or updating a Will should obtain advice appropriate to their assets, family relationships and estate-planning objectives.