Did you know that Pablo Picasso, Abraham Lincoln, Martin Luther King Jr, Jimi Hendrix, Michael Jackson and Prince all died without a Will? You might be thinking if such high profile and net worth people didn't have a Will, you too may be excused from making one, but that's incorrect. You should have a Will and continuously review it.
As someone often involved in estate planning and estate disputes, I cannot stress enough the importance of having a carefully considered and professionally prepared Will. When you die without a Will, it is called dying 'intestate'. When you die intestate, the law prescribes how your Estate will be divided up. In those circumstances, the law also prescribes who would be the most appropriate person to become your Estate's personal legal representative. Whilst that may seem straight forward, in reality, a lot of the time it is not. The heartache, the costs and the financial consequences that flow as a result can be very easily avoided by making a Will, an example of this was The Falkholt Tragedy, where the entire family passed away without a detailed Will in place.
So, in this article, I have addressed the three top excuses for not having a Will, and why you should make one.
- 'I don't want to think about death'
Death is one of the most common fears, along with public speaking, heights and bugs. Awareness of our mortality is part of being human.
Greek Philosopher, Aristotle once said "Death is the most terrible of all things, for it is the end, and nothing is thought to be either good or bad for the dead".
Unfortunately, Wills are unavoidably associated with death, but they shouldn't be. A Will is one of the most important financial planning decisions any adult has to make.
As an estate practitioner, having the morbid conversations with my clients is part of the job but logically, it's not about planning for the end but rather planning for the future. Not only does having a professionally prepared Will provide clarity regarding your wishes after your demise, it also minimises the cost to your Estate and the likelihood of disputes between your loved ones. This means there is less chance that your hard-earned Estate will be wasted on prolonged and expensive litigation.
- 'I don't have any money - I don't need a Will'
A Will has two purposes:
- To nominate a personal legal representative of the Estate (commonly known as 'the Executor'); and
- To direct how assets are to be distributed following death.
You may be excused for not thinking about assets which you own but currently do not have access to, as they may not seem 'real'. These include superannuation (if you have not reached retirement age), superannuation death benefits and life insurance, which may all potentially be paid to your estate following your death, significantly increasing it in value.
Even if the value of the assets you leave behind are too small to require a Grant of Probate, it is the Executor's responsibility to make funeral arrangements and arrangements for disposal of the body.
A Will can document your instructions with respect to those two aspects and whilst these are generally not legally binding, in some cases they can be. For example, did you know it is illegal to cremate a body if written directions are left that the body is not to be cremated?
In the absence of a Will, things get a lot more complicated. When there is no Will, there is no one appointed by you to be 'in charge', so a range of persons prescribed by the legislation can make an application for what is called a grant of "Letters of Administration". Until the grant is made and the Administrator appointed, there will be uncertainty as to who should have the authority to speak on behalf of the Estate.
In the absence of a Will, it is not uncommon for disputes to arise between family members or close friends of the deceased about funeral arrangements. These disputes are often about whether the body should be buried or cremated, the location of the burial, where the ashes should be scattered or who should keep the ashes. Unfortunately, these disputes, often emotionally driven, can escalate to costly and lengthy Court proceedings. In most cases, the parties involved in those proceedings will request that their costs are paid from the Estate.
- 'I can't afford a Will'
In my experience, having a professional Will prepared will almost always be less expensive than the cost to your Estate following your death in the event you either do not leave a Will or make one yourself. At Coleman Greig, we realise that everyone's circumstances are individual and having considered your personal circumstances can provide you with advice about steps you may be able to take now to minimise the cost to your Estate in the future.
You may be tempted to save on the cost of having a professionally prepared Will and write one yourself or complete a DIY Will Kit. I urge you not to give into the temptation!
In my experience, most of the home-made Wills or DIY kits fail to reflect the testator's actual intentions correctly and/or fail to comply with the legislative requirements for validity of a Will. This creates uncertainty and results in a great expense to the Estate where the Executor or the Administrator is left to fix the problem at the cost to the beneficiaries.
Often the author of a home-made Will does not appreciate the structure of his/her finances and in particular which assets his/her Will applies to. For example, the author might make invalid dispositions of shares in jointly owned property, or directions about their superannuation and life insurance which generally do not form part of the Estate.
Also, a very large number of Will-kits or home-made Wills are not completed or signed correctly. They might leave crucial information out, fail to dispose of all of the testator's assets or fail to comply with execution requirements. When a Will does not comply with the legal requirements for validity, it is called an 'Informal Will'.
Whilst it is possible to admit an informal Will to Probate, every case is different and must be assessed on its merits. The applicant's job will be to figure out what was intended by the document in the first place and ask the Court to make the orders accordingly. The applications to admit an informal Will to Probate will often be opposed by those who would otherwise receive a benefit (for example under an earlier valid Will, or under intestacy) if the Will is not admitted to Probate. These proceedings could potentially cost over a hundred thousand dollars per party in legal costs, which could be ordered to be paid from the Estate. This is generally because it is the author of the Will who is to blame for the inadequately completed 'Will' in the first place. Overall, costs to the Estate as a result of such application or contested proceedings grossly outweigh the cost of having a professional Will prepared in the first place.
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.