1. Why do you need a Will?
Without a Will you are effectively forgoing your right to have a say in how your assets are distributed and making it harder and probably more costly for your loved ones to deal with your assets after you die.
If you do not have a Will, what happens to your assets will probably be different to what you would have wanted and may make things more complicated than they need to be or have unintended consequences.
For instance, if you die without a Will leaving a spouse and children then your assets may go all to your spouse or may be split between your spouse and children according to a rigid formula, or, if you die without a Will and do not have a spouse or children then, in most parts of Australia, all your assets will go to your parents which could affect their pension eligibility.
2. Why do you need to change, review and update your Will?
You can change your Will at any time either by completing a special document containing the change(s) only (called a codicil) or by completing a whole new Will. If you already have a Will then you should review it now and ensure it still meets your needs.
You should also review your Will at least every 3-5 years or whenever your circumstances or assets change significantly (such as if you marry, separate, have children, acquire significant assets or buy into or start a new business).
3. A will can be quite involved. What does a Will cost?
The member discounted price for a standard Will for a single person is $346.50 (including GST). The member discounted price for standard Will for a couple is $495.00 (including GST). These costs include the time spent in discussions with you. Additional costs are involved for services such as Enduring Power of Attorney or Medical Power of Attorney.
Non-member rates - A standard Will is $385 (including GST) for a single person or $550 (including GST) for a couple.
Seeking the assistance of someone with the relevant qualifications, knowledge and experience will minimise:
the risk of your Will not being effective or not achieving the desired result
the risk of successful challenges being made against your Will
Our principal lawyer, Philip Lambourne, has over 25 years’ experience in private legal practice with most of that time spent advising and drafting documents in the Wills and estate planning area.
4. Can I make my Will challenge proof?
All States and Territories have rules enshrined in legislation which allow wills to be challenged by dependants of a Will maker who claim not to have received sufficient provision in the Will (often called testator family maintenance claims or TFM claims).
NSW has a 'notional estate' regime which effectively allows TFM claims to attack assets not held personally (such as superannuation or private companies and trusts). This could affect non-NSW residents who have superannuation, life insurance or shares in companies which are treated as being NSW assets because of the location of relevant company or fund registers.
You cannot prevent someone exercising their right to claim against your estate. If you are concerned about potential TFM claims then you can, and should, include provisions in your Will (or in a separate private document) explaining your reasons for excluding relevant persons from your Will. This will not prevent a claim but will be useful evidence in defending any claim which is made.
5. What about Joint Property, Superannuation, Companies, Trusts, Life Insurance and Powers of Attorney.
Your Will cannot cover property held as joint tenants (as opposed to tenants in common) which will automatically pass to a surviving joint owner. So for example if you and your spouse own your house in joint names then your spouse will become the sole owner irrespective of the contents of your Will.
Your will may not properly cover assets held outside Australia. If this applies to you please contact us to discuss your particular circumstances.
Your Will can only cover assets that you own or have rights to personally. Your Will cannot give away assets held in private companies or trusts, nor will it necessarily cover your superannuation or life insurance. If you have private companies or trusts or any life insurance held outside superannuation then you should contact us to discuss how those assets or structures would be affected by your death and what you can do to best ensure that your desired outcomes are achieved.
Also, do not forget that your Will only has effect if you die, and that to cover the potential need for others to have authority to deal with your assets whilst you are alive, you need to have other documents such as an Enduring Power of Attorney in place (refer to point 7 for more information regarding an Enduring Power of Attorney).
6. What does "intestate" mean and who is a "testator'?
If someone dies “intestate” then the person has died without leaving a valid Will. The word “intestate" comes from the word "testament” which is just an old fashioned term for a Will.
A “testator” is simply a person who makes a Will, or more commonly known these days as a Will maker.
7. What is an Enduring Power of Attorney? Do I need one?
You would use an enduring power of attorney to appoint someone to make financial and personal decisions on your behalf if you become unable to make your own decisions, e.g. if you have failing cognitive health or lose capacity to make decisions. It can also appoint the financial attorney to act if you are simply unavailable for some reason, such as being overseas.
Without an enduring power of attorney already in place, it will be left to loved ones to apply to a Tribunal to enable them to look after your affairs if you become incapable.
8. What is a medical power of attorney?
This can vary in every state/territory. In Victoria, you can put in place an enduring Power of Attorney (Medical Treatment) to appoint a person to make important decisions about medical treatment if you become incapable.
A medical Power of Attorney cannot refuse food and water or palliative care on your behalf.
9. Can I make a binding advance health directive?
This can vary in every state/territory. In Victoria, an advance health directive is a document in which a person specifies what actions should be taken for their health if they are no longer able to make decisions for themselves because of illness or incapacity. There is no standard form and they are not binding on medical practitioners. Changes to this came into effect from 12 March, 2018.
10. What is a Testamentary Trust and how is it different to a family trust?
A trust is a relationship where a person (the Trustee) is under an obligation to hold property for the benefit of other persons (the Beneficiaries). The terms of the obligation are defined by the provisions of a legal document The Trustee is the legal owner of the trust property and the beneficiaries hold the beneficial interest in the trust property.
A Testamentary Trust is simply a trust which is established under the terms of a person’s Will, and which only comes into operation upon the person’s death.
By contrast, a Family Trust is created during a person’s life and is established under a Trust Deed entered into between the Trustee and another person called the Settlor.
Most Family Trusts and Testamentary Trusts are Discretionary Trusts. In a Discretionary Trust the beneficiaries do not have a fixed entitlement or interest in the trust funds. The Trustee has the discretion to determine which beneficiaries receive the capital and income of the trust and how much each beneficiary is to receive. The Trustee can only distribute to beneficiaries within a nominated class (usually relatives of the person creating the trust) as set out in the terms of the Trust Deed.
Phil Lambourne from APS Wills & Estates deals with issues such as these on a daily basis. Even though your affairs may be simple, the issues are complicated. Make sure you are satisfied that you have covered all the areas of your Will and Estate. Call Phil Lambourne now on 1300 131 809 or (03) 9322 2000 and have those questions answered.