What is a Will?
Will is a legal document that outlines who you want to inherit your estate, guardian for your children, and the executor of your estate when you pass away. We recommend using a professional in all aspects of estate planning to help you prepare your Will.
Why you should have a Will
You might think that only those with complicated assets need Wills. However, there even those with little to no assets should have a Will.
- You can specify who gets your assets and how much.
- You can identify guardians for your children.
- Your beneficiaries will have an easier time getting access to your assets.
What does my Will include?
A Will allows you to decide how to distribute your belongings when you pass away. These belongings can include property, money and possessions. In addition, if you have a business or investments, your Will can specify who will receive those assets and when.
Your Will also states your preferences for who should take over as guardian for your children in the event of your death. Nonetheless, your Will is an important legal document outlining your wishes for when you pass away and typically includes these details:
- your beneficiaries
- who you want to receive specific personal
- any religious arrangements for your funeral
- legal guardians for any children under 18 years
- who you choose to be your executor
Wills and Superannuation
When drafting their Will, many people don't realise that their Super fund doesn't automatically become part of their estate. Your Will includes only assets that you own. Your super benefit is held in trust by the trustee of your super fund.
Therefore, different rules apply. Technically under the superannuation rules, certain people may make a claim on your super benefit that you don’t want to claim. Therefore, it’s important to nominate beneficiaries for your super death benefit so you can be more certain about who your super will go to.
Other assets not included in your Will include assets or property owned as a joint tenant, assets held in trust, assets owned by a company and life insurance paid directly to beneficiaries. Suppose the beneficiaries of those assets predeceased the testator.
In that case, the policy or account then reverts to the estate and is distributed according to the terms of the Will or by a probate court.
Wills and Trusts
A trust is a legal document that lets you put conditions on how your assets are distributed after you die. However, you should also have a Will and your trust because they typically only include specific assets and not the entire estate.
If you have what's known as a living trust, which you can put most of your assets in, you still need what's known as a pour-over Will. Pour-over Will's ensures that all assets you intend to put in your trust are there, even if you fail to do so before you die.
Any assets that are not held in the trust are considered subject to probate. Therefore, if you don't specify in your Will who should get those assets, a court may decide to distribute them to family or loved ones that you didn't choose.
What happens if I don't have a Will?
Dying without a Will is referred to as dying intestate. If this occurs, the state government or public trustee will oversee the distribution of your estate. The law of intestate provides a guide to determine who receives the assets of your estate.
Across Australia, each state and territory have different ways of deciding who the ‘Next of Kin’ is and what they will inherit.
Getting Started on Your Will
To prepare a Will, begin by making a list of your assets and debts. Make sure to include family heirlooms and other assets that you wish to transfer to a particular person.
In addition, you should also include any instruction for a power of attorney, a medical directive, or a living Will. That way, the court has clear direction on handling matters if you lose physical or mental capacity.
How to Prepare and Validate Your Will
You don't necessarily have the help of a lawyer to prepare a valid Will. If you are comfortable doing it on your own, plenty of resources are available to assist you. However, we do recommend using professional services to make sure your Will is legally valid.
Once you've created the document, you need witnesses, usually by two adults who are of sound mind and know you well. It's best to pick someone who isn't a beneficiary and has no financial or personal stake in your choices.
Choosing an Executor for Your Will
Part of preparing your Will includes choosing an executor. The executor is typically a close friend, family member or spouse. They are responsible for administering your estate and should have your best interests in mind.
You can also name joint executors or use professional executor services. If your estate is complicated, it might make more sense to use executor services. They come with the knowledge and expertise of handling an estate.
Where to Keep a Will
The state court usually requires access to the original copy of your Will before granting probate to access your estate. Therefore, it’s crucial to keep the document where it’s safe and accessible.
Then your executor will know where the original Will is stored, along with needed information such as the password for the safe. In addition, it's smart to duplicate signed copies. The signed copy can help to establish your intentions in case the original is damaged or lost.
How to Change a Will
You may never need to update your Will, or you may choose to update it regularly. Regardless, the only version of your Will that matters is the most current valid one in existence at the time of your death.
A good rule is to review your Will at pivotal moments in your life or every couple of years. These events might include marriage, divorce, or the birth of a child. For example, your kids probably won't need guardians named in a Will after they're adults.
Changing your Will is easy. You can write a new Will to replace the old one or add using an amendment known as a codicil. They usually require two witnesses are usually required to sign when a codicil is added.
Bottom Line
Writing a Will and making sure it’s always valid and up to date is important to ensure that your wishes are known and fulfilled when you pass away. Without a Will, it becomes hard for your loved ones to gain access, manage and distribute your estate.
To start writing your Will today, contact Willed, Australia’s leading online Will provider.
Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.
