A Will is a document containing your instructions and wishes as to how you want your estate, property and assets, to be distributed after your death.
This page aims to provide you with a broad overview of what is a Will, the roles of the Testator (Will maker), Estate Trustee (Will administer) and Beneficiaries (persons who receive assets).
This page is not legal advice and you should not act based solely on any of the information contained below.
What Is a Will?
A Will is a document containing your instructions and wishes for the administration and distribution of your estate after your death. It is important to have a Will that records your wishes so that your assets such as your house, land, car, shares, bank accounts and insurance policies are distributed how you wish. Any person eighteen (18) years of age or older and of sound mind can make a Will. The person who makes the Will is called the “Testator”.
What Happens If I Don’t Have a Will?
If you don’t have a Will when you pass away you are said to have passed away “intestate”. The Courts will apply a legal formula to decide who will receive your assets. Your assets will be distributed according to a rigid formula set down by the laws of intestacy.
These laws may:
- Force the sale of the family home or other family assets so other Beneficiaries can claim their share of the assets accordingly
- Not provide future financial protection for your children or grandchildren or any other dependent
- Leave incapacitated members of your family without adequate support or financial security
- May give your assets to the government if you have no relatives
Furthermore you will have no say in who administers your estate or who may be appointed guardian of your children if they are under eighteen (18) years of age. If you do not have a Will, any family member may apply to the court for letters of administration which, in effect, gives them the power as Executor of your estate and they may legally administer your estate at their discretion.
What is the role of an Executor?
Executors are persons who you trust to dispose of your assets in accordance with the instructions in your Will. It is important to select someone who has an understanding of legal and financial matters so they can properly administer your estate. In most cases they will be entitled to a commission for the work required to administer the estate. The Executor, in effect, steps into the shoes of the deceased person and winds up the deceased person’s personal affairs.
Some tasks usually performed by an Executor include:
- Locating the Will
- Arranging the funeral
- Applying for probate
- Obtaining a death certificate
- Informing investment bodies of the death
- Locating family and Beneficiaries
- Locating and assessing the value of assets
- Paying debts, income tax, funeral expenses
- Transferring assets and paying stamp duty; and
- Distributing any surplus to Beneficiaries.
Your Executor may require the assistance of a solicitor to deal with the duties and obligations of administration or you may choose to nominate Ramsden Bow Lawyers as a professional Executor to administer your estate in an independent and professional manner.
What’s involved in nominating an Executor?
You can nominate a maximum of four Executors to act. You should obtain each Executor’s consent before making a nomination. Your Executor can also be a Beneficiary.
In selecting your Executors, you should keep in mind the following:
- If you intend to leave the majority of your assets to a single person, such as your Spouse, then usually that person should be nominated as one of your Executors.
- You can nominate an independent person, such as a friend or advisor, who you trust to act as co-Executor if you wish. It will be the responsibility of both Executors to work together in this situation.
- Consider the Executor’s age before nominating them.
Especially if you nominate an Executor who is likely to pass away before you. If you nominate someone who is older than you, then you should consider nominating a substitute Executor as well.
You should also consider having substitute Executor(s) in the event a nominated Executor cannot act for some reason. For example, the complexity of administering the estate might be too complicated or your primary Executor is no longer available.
What are Beneficiaries?
Beneficiaries are persons who will receive your assets. They usually include your Spouse or Defacto partner and children. You may divide the assets in any way you wish. For example, you may wish to give children and step-children assets in percentage form with one Beneficiary entitled to a greater interest than the other. Alternatively, you may wish to divide your assets into equal shares. You may also provide specific gifts such as your jewellery, house or car to particular Beneficiaries. You may also set up trusts for any children or step-children so that assets will be passed to them when they reach a specific age.
Preparing Your Will
The following things should be considered when preparing your Will:
- Who will be the Executors
- Who will be the Beneficiaries
- What are your current assets and liabilities and how would you like them distributed
- Do you wish to have particular assets transferred to the Beneficiaries rather than sold
- Who will take care of your children upon your death
- Do you wish to be buried or cremated
- Is their any special requests for your funeral or headstone
- Would you like to set up a testamentary trust to provide for your children’s children at a certain age and minimise tax liability for them
As your Will is an important legal document it is important to make
sure all the details of your Beneficiaries are correct; including the proper names and addresses of Executors and Beneficiaries.
If I Get Married or Divorced, Does That Affect My Will?
If you marry after you have made a Will, the Will is generally revoked or cancelled, unless it was made in anticipation of marriage. If you divorce after you make your Will, it only revokes or cancels any gift to a former spouse. It also cancels your spouse’s appointment as Executor, trustee or guardian in the Will. However, this won’t apply if the Court is satisfied that the Will-maker did not intend by divorce to revoke the gift or appointment. If you wish to alter your Will or your marital circumstances change, you should seek the guidance of your solicitor to advise you accordingly.
What is a Testamentary Trust?
A testamentary trust is a trust established by a Will. It does not come into effect until after the death of the person making the Will. At this point in time, specified deceased estate property is transferred to a trustee who holds the assets on trust for the benefit of the Beneficiaries.
A testamentary trust is not the same trust as the deceased estate. Testamentary trusts are complex legal documents and require further legal advice than may be offered in this information sheet.
Should I name a beneficiary for my life insurance?
If you have a life insurance policy or superannuation account you should name the Beneficiaries directly with the insurance or superannuation company. That way they will not become part of the deceased estate and no commission will be paid to your Executors to have them transferred to the named Beneficiaries.
What happens to any old wills?
It is important to know the location of old Wills to either collect or destroy them or inform the holder that a new Will has been made and their services are no longer required.