A Will is a document that sets out who you want to leave your property to upon your death. A Will appoints an Executor, that manages your affairs, and names Beneficiaries, that receive a benefit from your estate. You can also appoint legal guardians for young children should anything happen to both natural parents.
Everyone over the age of 18 years should have an up-to-date Will in place. If a person dies without leaving a Will, that person is said to have died intestate. If you die intestate, the law will have the power to decide how your property is to be divided amongst your family members, whether you were close to them or not. Even if you don't have many assets to give away, it's important to let your loved ones know what your wishes are.
There is no specific legal requirement in Australia that a Will be typed, however, the general rule is that your Will must be legible. This means that if you handwrite your Will, you run the risk that it is not legible and therefore, not legally valid.
After you die, the Executor may need to obtain probate and submit the Will to the Court. With a handwritten Will, the Court has to decide whether the Will is authentic and legible. Courts can be notoriously difficult with handwritten Wills as it has the discretion to decide whether a Will is legible and valid.
Importantly, do not make any handwritten changes to your original Will. If you want to change or amend your Will, it's better to make a new Will, rather than amend your current Will. If you do make a new Will, you should ensure that you have destroyed all copies of your prior Will.
Before you start, it's a good idea to make a list of your assets and liabilities, though there is no formal requirement to do so. Your individual assets are not listed in a Will. You can download and complete a List of property now.
It's a good idea to check what are assets are covered by a Will. In general, some assets that are not usually covered by a Will include:
- Jointly owned assets: because ownership of the asset automatically passes to the remaining owner when the other owner passes away.
- Superannuation: the rules governing most superannuation funds provide that the fund has the choice to decide where it pays your superannuation benefits. The options include paying it to your estate or to the beneficiary you have nominated with the fund. It is advisable to check this with your superannuation fund.
- Life insurance policies: as with superannuation, unless there is a specific person nominated as the beneficiary, the money will be paid to your estate and will be subject to your Will. If there is a specific nomination, then the money will be paid directly to that person.
- Capital Gains Tax (CGT): if you have significant assets, you should consider the effect of CGT on your estate. In general terms, when the executor or beneficiary disposes of an asset they received from a deceased estate, they may have to pay CGT.
A Will can be cancelled or revoked in accordance with your wishes at any time that you still have legal capacity.
If you already have a Will and you want to update or make a new Will, you must destroy any and all prior Wills.
You must ensure that all copies of your previous Will are destroyed in order to ensure that your new Will is valid.
An Executor is the person or persons that will be responsible for managing your affairs and property upon your death.
Some of the legal duties of an Executor are:
- Arranging the funeral
- Notifying all banks, insurance and other companies of your death
- Attending to the sale of any real estate
- Identifying beneficiaries and distributing their entitlements
- Winding up the estate, i.e. settling outstanding debts
- Investing any monies on behalf of minors until they reach a specified age
- Obtaining grant of probate (a court order that an Executor can administer a deceased estate).
An Executor should have certain qualities:
- They must be over 18 years of age
- They should not be a bankrupt or insolvent
- They should be capable decision-makers
- They should reside close to you or be able to spend time in your state to be able to administer your Will. An Executor has the power to order the funeral and should therefore, be readily accessible
- An Executor can also be a Beneficiary. If you are married and your spouse is going to be the recipient of your estate, you should name your spouse as Executor
- If there are Beneficiaries under the age of 18 years old, the Executor should be chosen with great care. That person will be called upon to make decisions concerning whether or not to spend any part of the child’s share on that child, pending the child reaching the age specified in your Will.
If you have any minor children (children under the age of 18 years), then you should strongly consider nominating one or more guardians for them in your Will. This would only come into effect if both natural parents died.
Any decisions a guardian makes (such as school, living or medical issues) must be in the best interests of the child. A guardian can be an Executor, but does not need to be.
You then need to decide which Beneficiaries will receive a specific gift (an item that you give to someone that will not form part of your estate, for example, a specific sum of money or your DVD collection) and which will share in your estate.
If you intend to leave a share of your estate, you should clearly express the share of your estate that Beneficiary will receive. If your estate is to be divided, make sure all of the shares add up to 100%. Read more about leaving your property in your Will.
Although it's difficult to think about, it's a good idea to let your loved ones know what your preferences are for the treatment of your body after your death. Do you want to be buried or cremated? Do you consent to your organs and tissues being used for medical scientific research purposes?
This is optional and there is no requirement to specify funeral arrangements for a Will to be valid.
There are some steps you can take to help ensure that your Will is valid and that your wishes will be carried out. If you write your own Will, remember that you must:
* Be over 18 years and have legal capacity.
* Put your wishes in writing
* Appoint at least 1 Executor
* Name at least 1 Beneficiary
* Sign your Will in the presence of 2 independent witnesses (they don't need to be qualified).
You can change, alter or update your will at any time and as often as you wish, so long as you have capacity to do so. You should review your Will at least once every 2 years to check it still reflects your current wishes.
Your circumstances can significantly change over time so it's a good idea to review your Will in the event of:
- the birth of children or grandchildren
- the death of a beneficiary or executor
- major financial changes
- home or property changes.
In most states, marriage automatically cancels a Will (unless it states it's made 'in contemplation of your marriage'). In most states, a Will in favour of a divorced spouse is immediately cancelled once the divorce becomes finalised.
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This article contains information of a general nature only and is not specific to your circumstances. This is not legal advice and should not be relied upon without independent legal or financial advice.