Preparing your own will at home or 'Do-it-yourself' will using the will kit available for purchase around $25 at the post office ("homemade wills") can have expensive consequences for your estate. This article will explore the common issues we encounter with homemade wills in our estate practice and make recommendations to avoid those issues for your estate.
Does the will comply with the formal requirements for a valid will?
The requirements for a valid will are set out in the Succession Act 2006 (NSW) and are as follows:
- There is a document which purports to embody the testamentary intentions (such as the appointment of an executor and the names of the beneficiaries to receive a particular gift or a share in the estate).
- The document is signed by the testator or by some other person in the presence of and at the direction of the testator.
- The document is signed or acknowledged by the testator in the presence of 2 or more witnesses present at the same time.
- At least 2 of those witnesses attest and sign the will in the presence of the testator (but not necessarily in the presence of each other).
One of the common issues with homemade wills is that they may not meet the requirement of having 2 or more witnesses. For example, only one witness attested and signed the will in the presence of the testator.
Section 8 of the Succession Act 2006 (NSW) empowers the Supreme Court of NSW to dispense with the formal requirements for a valid will if the Court is satisfied that the person intended the document to form as his or her will. This process involves an executor applying to the Court for a grant of probate of the document together with an order of the Court to dispense with the formal requirements for a valid will.
The application must include evidence:
- relating to the way the document was executed by the deceased person (for example, the deceased person may have typed up the document in their computer or laptop, printed it off and taken it to a witness for a signature), and
- the testamentary intentions of the deceased person, including evidence of statements made by the deceased person.
The executor is required to serve notice of the section 8 application on all persons affected by the Court's decision. The affected persons are the beneficiaries of an earlier will (which may meet the formal requirements for a valid will) or if there is no earlier will, then the persons who would be entitled in the distribution of the estate under the intestacy provisions in the Succession Act 2006 (NSW).
An affected person may enter an appearance in the probate proceedings challenging the veracity of the document as a will. If this occurs, the probate proceedings become contested and case managed by the Court.
The Court will consider all available evidence and decide whether to dispense with the formal requirements for a valid will.
The terms of the will are unclear
A homemade will may contain unclear dispositions, or it may not effectively dispose the assets of the estate. Examples include but not limited to:
- a particular person or charity may be named as a beneficiary and there is no person or charity that meets the definition.
- a gift is placed in a trust indefinitely with a direction for the income to go to a beneficiary and there is no provision as to when the trust ends and who is to receive the gift.
- the use of a generic group of beneficiaries such as "nieces and nephews" - does that include the nieces and nephews of the spouse by marriage?
- a specific gift of real estate to a beneficiary and that property does not exist at the date of death but there is a different piece of real estate.
The executor may be advised to apply to the Court to construe the terms of the will or seek judicial advice that the executor is justified in distributing the estate in a particular manner. These applications take place after the executor obtains a grant of probate (with respect to which the executor may have had to overcome issues with the formal requirements for a valid will). The executor would be required to serve notices on all persons affected by the construction suit.
Alternatively, the executor may reach an agreement with all affected persons by way of a deed of release and indemnity or a deed of family arrangement to distribute the estate in a particular manner.
The executor will need to seek legal advice for the way forward.
The dispositions in the will may have unintended capital gains tax or stamp duty consequences
There may be adverse capital gains tax arising from the dispositions in the will. For example, a gift of Australian real estate to a foreign beneficiary is subject to an approval from the Foreign Investment Review Board. See link to the previous article. If FIRB approval cannot be obtained, the executor would need to sell the Australian real estate which may trigger capital gains tax.
The legal costs incurred by your estate in navigating and rectifying the issues with the homemade will significantly outweigh the cost benefit of preparing your homemade will. A homemade will can create uncertainty, stress, delays with estate administration and conflicts between beneficiaries. All these issues could have been avoided by engaging a solicitor experienced in Wills and Estates to prepare the will, to advise on the will, and to attend on the signing of the will, even if your personal circumstances are straightforward.
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.