Why have a Will?
WHAT IS A WILL?
A Will is a legal document that outlines how you wish to have your assets distributed on your death. You get to choose who administers your estate for you and who and how your beneficiaries are to receive your assets.
Generally, to make a Will, you must be over 18, have proper mental capacity and sign a document in the presence of 2 independent witnesses.
If you pass away without having a valid will in place (called ‘dying intestate’) then the provisions of the Succession Act 2006 (NSW) will apply and your estate will be divided up without regard to your wishes.
Take control of who controls your estate and who inherits by putting in place a will today.
An executor is the person you appoint in your Will to deal with your estate on your death and to ensure that your wishes are carried out. Often, people appoint 2 executors or provide for an alternate executor so that if one person is not willing (for example, due to age or infirmity) or able (for example, if they are dead or incapacitated) to act, then the other/alternate executor can act.
WHAT CAN A WILL INCLUDE?
Any asset that you own can be deal with in your will, whether bank accounts, motor vehicles, boats, jewellery or any other item. Particular items can be left to particular people, the whole of your estate can be left to one person or to several people in various fractions or percentages and conditions of gift can be imposed, such as paying out encumbrances such as mortgages.
Real property (houses and land) that is owned as ‘joint tenants’ (as is often the case for married couples) cannot be left by Will because when one joint owner dies, it automatically passes to the surviving owner. Where land is owned as tenants in common, it can be transmitted by Will. There can be good reasons for holding property in either way.
Life insurance and superannuation benefits are not able to be dealt with by a Will where specific beneficiaries have been nominated by policy owner. If the estate is nominated as beneficiary, a nomination has lapsed (they often lapse after 3 years) or no nomination has been made, the proceeds will usually be paid to the estate and distributed under the Will however, the trustee or the insurer may have discretion as to who to pay the benefit to. Your financial advisor would be able to advise you in relation to any superannuation death benefit nominations.
Often, wishes are expressed in Wills such as those relating to cremation or burial and directions regarding guardianship of infant children.
WHEN IS A NEW WILL REQUIRED?
If you get married or if you get separated or divorced from your spouse or partner or if your family circumstances change (for example, through a birth or a death or if you have a significant change to your finances, like an inheritance, bankruptcy, changes in business structure etc), you should make a new Will.
Your Will should be regularly reviewed (every few years at least) to ensure it still reflects your current wishes.
Consider whether your beneficiaries would benefit from having Wills with Testamentary Trusts as they can offer significant and ongoing benefits, including:
- asset protection from creditors, and
- taxation advantages such as income splitting.
This is particularly useful where your beneficiaries are in business and have their own asset protection measures in place, if they are ‘at risk’ or where you have income producing assets. Speak to us about how testamentary trusts can benefit your family.
Craig Pryor is principal solicitor at McKillop Legal. For further information in relation to estate planning, business succession or any other commercial law matter, contact Craig Pryor on (02) 9521 2455 or email firstname.lastname@example.org.