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WILLS AND ESTATES

Steps and considerations

Proper estate planning is one of the most important ways we can help our loved ones navigate a very difficult time. The 11th century philosopher Solomon ibn Gabriol said “Plan for this world as if you expect to live forever; but plan for the hereafter as if you expect to die tomorrow”. This maxim holds true today – the best time to prepare your will is now.

Why do I need a will?

In 2018 an Australian research organisation conducted a survey that found more than half of Australian adults – almost 10 million people – do not have a will. The survey did not consider how many of the people who did have a will had wills that were incomplete or ineffective. Dying without a will, or with an ineffective will, can have a number of serious implications on an estate.

A person who dies without a will is known as ‘intestate’. Each state in Australia has its own legislation which deals with how an estate is divided on an intestacy, but generally speaking, the estate will be divided between surviving relatives in order of priority – if there is a surviving spouse and/or children the estate will be divided between them (in varying amounts) and if there are not, the estate will be given to other relatives. If someone dies without any surviving relatives, closer than first cousins, the estate will be bona vacantia, which means it will be received by the Crown (ie. the relevant State government).

The legislation that governs intestacy is not flexible– what happens to your estate will be determined by the legislature rather than you.

By ensuring that you have a valid, clear and up to date will you can provide both certainty and protection to your family and limit the risk of increased administrative costs after you die.

How do I prepare a will?

As lawyers, our strong recommendation is that you engage a suitably qualified and experienced solicitor to assist with your estate planning. It is possible to draft a will yourself, and there are a range of DIY kits available from places like the Post Office, newsagents and online – but we do not recommend them.

While stuffing up your DIY craft project may have some dire implications for your scrapbook – mistakes made when taking the DIY approach to estate planning can have serious and lasting consequences for your loved ones. Choosing not to use an expert to assist in drafting your will has associated risks, these include:

Formalities – the various states’ legislation impose high levels of formality in relation to the completion and witnessing of wills. It is common for DIY wills to be incorrectly completed and/or witnessed. This can result in a will being declared invalid, requiring more complex grants of letters of administration, or equally worryingly, being declared binding despite not appropriately dealing with the estate;

Improperly dealing with more complex estates – it is increasingly common for people to have reasonably complex personal circumstances – blended families, self-managed superannuation, various entities, trust structures, and family businesses all need to be properly considered in the context of estate planning;

Lack of professional indemnity insurance – one of the issues that many people fail to consider when opting for the DIY approach is that lawyers have appropriate professional indemnity insurance. If a lawyer gets it wrong they are liable in professional negligence and have insurance to cover potential losses. If you get it wrong, no such protection exists. If they can be corrected at all, the costs to cover your mistakes will be borne by your estate.

Things to consider when making a will

It is helpful to consider the “ABC’s” when making a will – Assets, Beneficiaries and Control.

Assets – what are the things that actually form part of your estate? There are many financial resources that won’t necessarily be part of an estate. Superannuation, for example, will not necessarily form part of the estate, and given that an increasingly large proportion of our worth is within superannuation, consideration needs to be given to how this is dealt with after death. Assets that are held in joint names are also treated differently to assets that are held solely or as tenants in common.

Beneficiaries – who are the people that are going to receive a benefit from your will? What about the people who you might wish to exclude? It may be necessary to understand what sort of challenges can be brought against an estate by a disgruntled person. Often we know who we want to benefit from our estate, but we may need to consider things like the taxation and asset protection implications of how we leave our estate.

Control – who will be in charge of dealing with the estate? Who will look after children who are under the age of 18? Part of a properly drafted will includes considering who the executors and guardians will be, and who their backups are if they are unable to act.

Conclusion

Estate planning is more than just a will, and this article has covered only a few of the considerations in what could be a complex process. Considering your mortality is not necessarily an enjoyable task, but by ensuring that you have put in place a properly drafted estate plan, you can ease the burden on your loved ones after you pass away.

This content originally appeared on yourloss.com.au and is published with permission.

YourLoss is an independent news and resource website covering many aspects associated with death, dying and the bereavement process. It’s a hub of information that is timely, relevant, and factual. It is supported by like-minded family-owned and operated funeral providers. Each has a passion for the open availability of information relating to this often-non-spoken aspect of society.

James Ballantyne is the Principal of Ballantyne Law Group. He has worked in key roles at some of Queensland’s leading estate planning and commercial firms. Admitted to the Supreme Court of Queensland and the High Court of Australia, James is able to provide practical, pragmatic and effective legal advice in plain English.

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