For most of us, estate planning and having to think about what will happen to our assets when we die, is not on our “top ten things to do” list. But, it should be.
Putting time aside to proactively plan how you would like your assets to be distributed after your death will save your friends and family additional burden and heartache. It will also prevent the value of your assets from being dissipated through costly legal disputes that arise simply because you left your loved ones with no direction as to how you wish your estate to be divided.
To help you to get started, we have set out some of the most common questions that arise when considering planning for your estate.
What is a ‘Last Will & Testament’?
A ‘Last Will & Testament’ (often simply referred to as a ‘Will’) is a written record of how you would like your assets to be distributed after your death. Having a clear and legally valid Will is the best way to ensure your assets are protected and distributed according to your wishes.
Do I still need a Will if I don’t own very much?
The short answer to this question is ‘YES’. There are a number of reasons why it is important to have a valid Will:
1. peace of mind that you have made your wishes clear and that your assets will be divided up and administered in accordance with those wishes.
2. regardless of the size of your estate, you would not want a costly legal dispute to end up dissipating the value of your estate and posing the risk that there may be very little of an estate left for the beneficiaries to claim.
I made a Will some years ago, but should I update it?
Even though Wills don’t generally have an expiry date, it is sensible to review and update your Will when your circumstances change. Important life changes such as marriage, divorce, the birth of a child and any change in your personal financial circumstances such as receiving an inheritance or buying a property are also relevant milestone points at which to consider updating your Will.
It is important to seek legal advice prior to updating a Will. Sometimes the implications of a seemingly minor change to a Will are not always apparent, and it is also important that any amendments to a Will are properly documented, signed and witnessed to ensure that the Will remains valid.
Are there rules about who I must leave my assets to?
While in theory you are able to prepare a Will leaving your estate to whomever you please (animals included), in reality it is very important to seek legal advice on this issue.
Relevant matters may include whether you have any infant children or other dependents. In situations involving blended families or estranged children, careful consideration needs to be given to the likely impact of leaving individuals out of a Will and whether this is likely to lead the Will being contested.
Who should I appoint as my Executor?
The role of an executor is one that carries with it great responsibility and while it can be tempting to choose your best friend or eldest child simply because it seems the right thing to do, it is important to consider whether the person you are thinking of naming as your Executor has the capacity to carry out the role.
The duties of an executor can include everything from arranging the funeral to managing the assets of the estate in the period before probate is granted and administering the estate once probate has been granted.
In circumstances where there is a potential for conflict between family and friends it may be sensible to consider appointing an independent executor rather than a family member or friend. The downside to appointing an independent executor can be that considerable fees may be incurred depending on who is appointed.
What happens if I die without a Will?
If you die without a Will, you will be said to have died ‘intestate’. If this occurs your assets will be distributed according to the relevant State law. This will of course be out of your control and may mean that your assets are not distributed in the way that you would have liked.
Can a Will be disputed or changed after I die?
It is possible that even with the most careful planning someone may wish to challenge your Will. If a Court finds that you did not make adequate provision for a person for who you have responsibility, such as a dependent family member, then it may overturn your Will and put in place alternative arrangements for the distribution of your assets.
Another basis on which a Will can be overturned is if a Court were to find that you were not of ‘sound mind’ when you made the Will. Being of ‘sound mind’ means that you had sufficient intellectual and physical capacity to make the Will.
If you or someone you know wants more information or needs help or advice, please contact us on (02) 8014 5885 or email email@example.com.