We cover the issues you should think about if you are considering getting a will for the first time or deciding whether you need to update one.
Our will lawyers explains some of the common questions they are asked.
Yes, anyone over the age of 18 who own assets or have children should have a Will. A Will can be simple or more complex depending on your estate and your beneficiaries. Without a Will your estate will be distributed in accordance with the law and the government may take a portion of your estate as fees for administration of your estate.
These laws have a prescribed amount that family members inherit and may mean that your spouse and children all receive a part of your estate as well as other family members potentially.
If someone dies without a will and they have a partner and children/grandchildren the law states that:
If the children are the biological children of the deceased and partner – then 100% goes to the partner.
If the partner is a second marriage/relationship, then the partner receives personal effects and statutory legacy of $451,909 and half of the balance of the estate. The children will receive the other half of the remaining estate in equal shares.
It is a document containing a person wishes as to how they want their assets (such as property, bank accounts and so on) to be distributed after they pass away.
A Will can deal with the following matters:
Who will manage your estate when you pass away (executor);
Who your estate will go to (beneficiaries);
How you want your business to be managed;
Who will look after your children;
If you feel you need to a greater financial need to a particular person;
What will happen to your remains when you pass away;
Your wishes for burial or cremation; and many other things.
If you pass away without a valid Will, then your estate will be distributed in accordance with the Probate and Administration Act 1958 (Vic.). The laws have prescribed methods for the distribution of your assets. There are different divisions of assets for different families and whether children are involved or not. If you do not have children or family members your estate will go to the government. If you don’t have family members to leave your assets to after you die you may consider leaving it to a charity or organisation such as a university.
I have a Power of Attorney, isn’t that enough?
A Power of Attorney is only effective while you are alive. It allows you to appoint another person if you are no longer capable of making decisions for yourself. A Will, by contrast, comes into effect once you pass away.
The majority of Wills drafted are straightforward wills, usually mirror wills by spouses leaving everything to each other or to their children.
However, issues can arise when someone wants to include and exclude children from former relationships, include stepchildren or significant others. It is important that you are well informed of the gains and pitfalls of leaving parts of your estate, especially with blended families being commonplace.
In some cases of complex estate, you might benefit from a Testamentary Trust Will. This means, upon your passing, that a family trust is generally established by a family member for the benefit of members of the family group. They can protect family assets from the liabilities of one or more of the family members in the event of them becoming bankrupt or insolvent. They provide a mechanism to pass family assets to future generations and may avoid issues such as challenges to the will of a deceased senior family member. They also provide a means of accessing favourable taxation treatment by ensuring all family members use their income tax free thresholds. In relation to losses and franking credits a family trust election can secure tax advantages otherwise unavailable provided that the trust passes the family control test and makes distributions of trust income only to beneficiaries of the trust who are members of the family.
Yes, providing you have the mental capacity to provide instructions, you can get a Will. You must also be over the age of eighteen.
Yes, you can amend your Will as many times as you wish during your lifetime. However, we would recommend that you at least have a look at updating your Will every five (5) years to ensure that it still complies with your wishes and circumstances. If you separate, you should redo your Will straight away because pre-divorce, if you were to pass away, your assets could pass to your former spouse.
You are also required to draft a new Will in the event that you get married or divorce. These events can invalidate your Will.
As with any legal documentation individual circumstances can affect what the need or outcome is. It is always important to get legal advice from an experienced wills lawyer so that your last wishes are carried out and that your loved ones are protected.
Please note: The above is not intended to be legal advice. Every circumstance is different. Always seek legal advice in relation to your individual situation.
© PCL Lawyers 2020
Theresa is the Team Leader of our Family Law and Estate Planning practice groups. Theresa's practice includes acting for clients...