"Why do I need a Will?" you may ask. The reason is simple. If you die without one, the government – not you – decides who shares in your estate and who'll be responsible for managing it.
But don't assume that just because you have a Will everything's taken care of forever. You should review it regularly. Again, the reason is simple: circumstances change. Children grow up, your original executor moves overseas. If you're lucky, you win the lottery and now want to leave something to your favourite charity. The point is, your Will should always reflect your current circumstances.
In our experience, people often tend to think about Wills and powers of attorney only when they are about to go to hospital (or worse) or take a big trip or an emergency like Covid-19 strikes. That's not the way to do it. It leads to rushed, poorly considered documents.
To help clients with their decision making around Wills, we have compiled the following set of FAQs. We hope you find them useful.
What is a Will?
A Will is a document in which you say how your estate is to be distributed when you die, and who you appoint as your executor/s. It can also be used to pass control of discretionary trusts, nominate guardians of your minor children and state what kind of funeral, burial or cremation you want.
Why should I make a Will?
If you don't have a Will, the government steps in and decides how your estate is to be shared. While the relevant legislation is designed to be as fair as possible, it may not reflect your wishes.
Without a Will, you have no ability to apportion assets between your beneficiaries in the most tax effective manner, or to take account of their specific circumstances. For example, if your daughter is married to someone you don't trust, you can't "ring fence" her inheritance to protect it from her husband – unless you have a Will with a provision for this.
Finally, unless you have a Will you have no say in who administers your estate. Normally, that will be your next of kin, but it's not always clear who that is – for instance if you have a number of siblings but you do not have a partner or children. Also, what if you and your next of kin can't stand each other?
Can anyone make a Will?
No. While laws between States differ a little, generally speaking you must be at least 18 years old to make a Will, unless you have children. You must also be of sound mind (in legal terms, possess testamentary capacity). The Will must be in writing, and it must be signed in the presence of two witnesses. Witnesses to your Will must also be 18 or older and of sound mind. Avoid having an executor or beneficiary (or their close relative) witness your Will. Doing so could raise suspicions that you were coerced in some way.
A Will that is legally valid in the State where it is signed is legally valid in every other State of Australia.
Do I really need a lawyer to make a Will?
No. Anyone, including you, can draft your Will. As long as it meets the legal requirements above, it will be recognised as a valid Will.
But a word of warning. We've seen many DIY Wills that ended in tears because of a dispute about what the Will actually meant (usually the result of imprecise wording) or problems obtaining probate because it wasn't properly signed and witnessed. (Probate is the legal term for a Will being "proved" in a court of law and accepted as a valid public document that is the true last testament of the deceased. In most cases, the directions set out in a Will can't be carried out without probate.)
Our advice: get a lawyer. It won't cost much for a simple Will, and it could save those you leave behind a lot of pain.
Any other benefits of having a lawyer make my Will?
Besides ensuring your Will meets formal requirements, your lawyer can also help you with estate planning decisions and ensure your intentions are clearly expressed in your Will.
Why say "testamentary capacity" instead of "sound mind"?
Testamentary capacity has a precise legal meaning that is not quite the same as what people generally mean when saying someone is "of sound mind".
To have testamentary capacity for making a Will, you must understand:
- what a Will does and what it is for;
- that what you are signing is in fact a Will;
- the general nature of what you own and what you owe;
- the range of people to whom you might have a duty to provide for in the Will.
If you understand these things, you may have testamentary capacity even if you are suffering from dementia or the effects of brain injury.
If there is any doubt about your testamentary capacity, you should seek a report from your treating doctor or specialist around the time of signing. That report would be kept and used to support an application for probate of your Will.
What does an executor do?
An executor is a person you appoint in your Will to carry out your directions and wishes as set out in your Will. This includes taking your Will to probate. Once probate is granted, the executor has the legal authority to deal with your estate.
How many executors should I have?
Two or more is a good move. You can nominate that they either act together or that one acts if the other cannot or refuses to.
No person you appoint as an executor is obliged to accept the appointment. Also, it is possible that an appointed executor will die or become physically or mentally unable to act before you die.
You can appoint more than two executors, but a maximum of four can participate in obtaining probate and administering your estate.
If I want to have more than one executor act at the same time, how do they make decisions?
They make decisions jointly (unanimously) unless your Will specifies otherwise.
Should I tell a person I have appointed them as my executor?
Yes you should. You don't have to, but you want to know whether they are willing to take on the role. This gives you the opportunity to appoint someone else if they say no.
What is my "estate"?
Your estate consists of all property, including land, shares, or other investments, bank accounts and personal items, that are solely owned by you, and also your share of property owned as "tenant in common" with someone else. "Tenant in common" means that you split the ownership 50/50 (or in some other proportion) and your part can be separately transferred, as opposed to ownership as "joint tenants" who jointly own the complete asset.
Your estate does not include any assets you own as "joint tenants" with another person, such as your family home jointly owned with a partner. On your death, the surviving joint owner/s will own that property outright without the need for probate of your Will.
Superannuation proceeds and life insurance policy proceeds may or may not form part of your estate. It will depend on the terms of, or the beneficiaries you have nominated in respect of, those funds or policies.
How easy is it to change my Will?
Fairly easy. You can make a brand new Will which revokes your earlier Will, or you can make what is called a Codicil which is basically a short document that amends your Will.
Making a new Will is preferable because Codicils can become separated from the Will, so there is a risk that amendments set out in a Codicil will not take effect if the Codicil is not found or was not even known to exist.
When should I update my Will?
Unless revoked, any Will you have made will last forever. But that doesn't necessarily mean it will be appropriate at the time it is called on.
We recommend you revisit your Will every few years, or if something happens that calls for an immediate update. For example:
- someone named in your Will to receive a specific gift or a portion of your estate, or all of it, dies;
- you no longer own an asset that you have gifted to a beneficiary, or you acquire or dispose of major assets;
- you marry. Unless your existing Will states that it is made in contemplation of that marriage, your Will becomes null and void in its entirety when you marry;
- you divorce. Your divorce doesn't nullify your Will but it does treat your divorced partner as having pre-deceased you, meaning their appointment as executor and any gift to them are effectively cancelled;
- you have more children, or more grandchildren are born, after you have made your Will;
- any children who were young when you made your Will have reached adulthood;
- your relationship with a nominated executor of beneficiary changes.
My children are quite young. Who should I appoint as my executor?
Children cannot legally inherit until they are 18 years old and their inheritance would normally need to be held on trust until then. That is usually the job of the executor, but it can also be done by the other parent or anyone you choose who can comfortably take on that responsibility (and work with the other parent) until the children turn 18.
Who should I appoint as the guardian of my children?
There is no hard and fast rule. You need to consider a number of factors, including:
- the age of your children;
- the relationships your children have with those you consider appointing;
- the suitability of those you consider appointing – their values and beliefs, their age and health, where they live (for continuity of the children's relationships and schooling), their own family situation and parenting style.
One of my children has special needs. How might my Will deal with them?
Testamentary trusts or special disability trusts can be set up under a Will to provide for children who have special needs, whether that is due to physical or cognitive disability or to addiction. These are relatively complex structures that are best discussed with your lawyer.
I've heard about testamentary trusts. What are they? In what circumstances would I consider using them?
A testamentary trust is trust set out by a Will, usually akin to a discretionary/family trust. It only becomes effective upon your death and subject to any other conditions you set out in your Will.
Testamentary trusts can be used to keep family assets in the family or to provide for beneficiaries with special needs, and may provide asset protection against creditors of beneficiaries or in Family Court proceedings. They can also be used to provide for minor children in a tax effective manner.
Again, if you are considering a testamentary trust we suggest discussing this with your lawyer.
How do I revoke my Will?
An effective but bad way to revoke a Will is to simply destroy it. However, if no-one is aware that you have done so, a fruitless search for the Will may ensue after your death, causing frustration and delay, and you'll be left without a Will.
It is far better is to make a new Will which contains a clause revoking all previous Wills.
How difficult is it to challenge a Will?
A Will can be challenged on the following grounds:
- it is not valid because, for instance, it has been forged, it is not the last Will of the deceased, it has been made under duress or undue influence; or
- the deceased had a moral duty to make provision in the Will for the challenger, and has not done so adequately or at all.
The most common challenges will be made on the second ground. People who can challenge on the second ground are limited, most notably to a spouse or domestic partner, or the children of the deceased. In certain circumstances, others who were dependent on the deceased, such as grandchildren, carers or members of the household, may also challenge.
Adult children who challenge the Will must not only prove the moral obligation of the deceased to provide for them, but also demonstrate that they are unable to adequately provide for themselves.
Any claim for provision must be filed with the Court during the six months following probate being granted. The only exception to this is if leave of the Supreme Court is obtained.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.