FAQs on Will Making and Estate Planning
We recently sat down with Jess Rouse from 2NM Radio to talk about the topic of Wills. We thoroughly enjoyed chatting to Jess and answered some questions that we are commonly asked from our clients. The transcription of our radio interview is below:-
Jess: Okay, so when shall we start thinking about writing a Will. I mean I am 23 year old, should I start thinking about writing a Will now or is it too early.
Kerri: No you should be thinking about it Jess if you do not have a Will already. You are never too young to put a Will in place. So anyone really over the age of 18, if you have assets. Young people may think it is not worth having a Will as there is nothing to leave, but they could still have items such as jewellery or larger items of value that they may wish to leave to someone in particular. If they are working even a part-time job then they would have superannuation and sometimes there is an insurance policy attached to that super.
So you are never too young and whilst it is certainly our view that every person should have a Will there are some particular circumstances where a Will is a must. The first of which is if you have got a situation of blended families where someone has gone on to remarry. If there is any form of complex family situation. If you have children under the age of 18 then you want to consider who you would like to appoint as a guardian of those children if something was to happen to yourself and your partner, or on the flip side of that you may be caring for aging parents and need to put in place what would happen with them if something was to happen to you. So certainly any time is a good time to put a Will in place, but it is a must for certain people.
Jess: I guess another aspect of Wills is appointing an executor in the Will as well as guardian or that sort of thing. So what exactly is an executor and how does all that work.
Gemma: So in order to consider who you should nominate as your executor it is important to understand what the role of an executor is. When someone makes a Will they can nominate either one executor to act themselves or they can nominate a number of people who will act together. The role of the executor is to administer the estate of a deceased person in accordance with their Will. So there are some key parts in respect of that process and the responsibilities of an executor will depend on the estate and also what is within the Will, but one of the main aspects is obtaining a Grant of Probate and this is an Order from the Supreme Court that confirms that a Will is valid and that the executors actually have the right to administer the estate. Whilst it can seem like a large task to nominate someone to do this on your behalf on your passing, it is important to note that an executor can see a solicitor who can assist them both in the process of obtaining Grant of Probate as well as administering the estate.
Jess: I must say in a way we will try and help to not have so many family arguments and all that sort of thing over who is going to get what, etc. etc.
Kerri: That is right. That is really one of the key points in having a Will is really so that the Will sets out your wishes and the executor can come in and administer your estate in accordance with your wishes.
Jess: I am sure you both come across a few interesting cases, perhaps family dispute, some odd things people want to do with their Will.
Gemma: Yeah look, there is a whole of range of things. A recent case I had was someone wanting to gift money to their pet, so that was an interesting discussion. But I will talk about two cases that really highlight the necessity for a Will but also to have a valid Will. There was a poor fellow that did a “do-it-yourself” kit and he had intended to leave his estate to his wife. He filled in the gap and named his wife as the executor but forgot to actually insert her name in the beneficiary component of that Will, so in effect he left the whole estate to nobody because he had not filled out the do-it-yourself kit correctly.
Another example was a woman drafting her own Will and tried to use a number of terms such as “balance” and “remainder” and “residue of the estate” which all got a little bit overwhelming - the Will was both confused and conflicting so action was taken in Court to rectify the terms of the Will and the cost of that process was about $13,000.00 and it took two years to complete. The estate that was only worth around $78,000.00. So it can get a little bit out of hand if the Will is not drafted correctly and valid.
Jess: So are you restricted in anyway when it comes to putting a Will together, I mean everyone has got different things, they want to leave and what they want to do with their stuff.
Kerri: That is right Jess. So who someone leaves their estate to and how they divide their estate is really a personal decision and that will depend upon their circumstances, so what their estate is made up of as well as who they want to leave their estate to which is what is known as their beneficiary. So it can be as simple as dealing with an estate as a whole, so someone may choose to leave their whole estate to one beneficiary or to a number of beneficiaries either in equal or unequal shares. Alternatively, if someone has something specific that they want to leave to someone so for example, significant jewellery like a wedding or an engagement ring, they may have someone in particular that they want that to go to, or another way to provide for someone through a Will is by leaving what we call a legacy, so that is where you could leave a specific amount of money to one or more beneficiaries. So if someone chooses to leave specific gifts of a particular property or money then it is important that they also consider who the residue of their estate will go to because as Gemma said earlier it is important that the Will is valid and the other thing to consider is that in a Will you can have certain conditions so that, for example, if you left it in the first instance to one beneficiary you also need to look further down the line as to who you would leave your estate to if that person had already passed before you.
Jess: And just lastly, I guess when someone passes away they do not have control anymore, things could probably go wrong with the Will.
Gemma: I guess dealing firstly if someone dies without a Will that is when things can go terribly wrong. Now that is referred to as dying Intestate and it triggers a legal process whereby a formula applies as to how someone’s estate is distributed and that is essentially to a number of eligible relatives. If someone was to pass without a Will and did not have eligible relatives then the estate will pass to the State, so to the government. There is a case example where a man died without a Will and it could not actually be established that his birth was ever registered. So flowing from that his next of kin could not be established. So his estate which was worth around $180,000.00 went to the State. So it certainly goes wrong when someone passes without a Will and the estate passes to someone that they would never have wished for or intended it to go to. Another case example, a young girl passed away in a motor vehicle accident and there was an accident cover of around $200,000.00 and following the formula it went to both of her parents in equal shares. Her father had actually left the family and abandoned the family a few weeks before she was born and had not had any contact with her throughout her 21 years. Notwithstanding that though in accordance with the formula he received a $100,000.00.
So the other thing to understand when someone passes without a Will it is quite a complex process to apply for letters of administration and that can be onerous on your family members and inconvenience placed on your surviving family members. There can also be difficulties that arise in the interim before letters of administration are granted to allow someone to actually step in and manage someone’s affairs. So these are some of the things that can go wrong if a person passes without a Will.
If they pass with a Will then certainly that is fantastic and it is upheld and it is valid, but that is not to say that an eligible person cannot contest the Will. So just need to be mindful about that. And if there are family situations that may give rise to someone contesting a Will it is important to get proper advice around ways in which to structure the Will, to try to avoid a family provision’s claim and that is probably a discussion for another whole segment, but yeah the key is, if you think that that could be an issue just get some proper advice.
If you have a questions about drafting your Will or your estate planning needs, feel free to get in touch with the team today.