An Important Part Of Your Personal & Business Planning
WHY MAKE A WILL?
Your personal affairs affect you, your family
and your business or profession. It is important to plan and regularly
review such matters which include Wills, personal planning, estate
planning and business succession planning.
A Will determines who gets control of your property and assets, and
offers protection for your family in the event of your death.
Your Will should be an important part of your personal and business
planning.
Death is a very distressing event for your family and friends. Your
planning in making a Will can reduce their concerns and be of comfort
to those close to you as they know and carry out your wishes.
DO YOU HAVE A WILL?
There are many reasons why you should make a Will. Most importantly,
a Will is the legal means by which you can determine what happens
to your property and assets upon your death. By making a Will, you
decide who is (and who is not) to benefit under your Will. Your Will
is a confidential document and its terms do not need be disclosed
until after your death.
It is important to comply with formal legal requirements for the
Will to be valid. A Will has no effect until death and therefore it
can be made and then altered at any time.
Your Will should be kept in a safe place where you or your executor
or your solicitor can locate it if necessary.
YOU, THE MAKER OF THE WILL
A Will is a document by which you, the maker of the Will (the 'testator'
(male) or 'testatrix' (female)):
* appoint someone to act as an executor of your Will to carry out
your directions; and
* dispose of property to designated persons known as beneficiaries.
THE BENEFICIARIES
Beneficiaries are those who are to receive property under your Will.
You can nominate any person or persons who you wish to be beneficiaries
under your Will.
Beneficiaries need not be people - companies, schools, charities,
institutions etc., can also receive something under your Will.
If the beneficiaries are to be children and you wish to leave property
to them you may delay when a child is to receive property. For example,
until he or she reaches a certain age (ie 21 or 25). You can leave
a discretion to your executor to give the child all or part of the
property earlier - usually for education or other personal needs.
What if a beneficiary dies?
A beneficiary named in your Will may die before you do. Therefore,
another person should be named in your Will to take that beneficiary's
share if this happens. There are a number of ways that you can provide
for that deceased beneficiary's potential share to be distributed;
to all or some of the other beneficiaries, to the children of the
deceased beneficiary or to a different person or persons altogether.
THE EXECUTORS
The 'Executor' (male) or 'Executrix' (female) is the person who will
distribute your property according to the directions which you provide
in your Will. The executor can be a family member, a friend, your
solicitor, a trustee company or anyone else you choose.
As executor the person you nominate will often make important decisions
about how to manage and invest your property over a period of time.
Therefore, you should carefully consider who you want to be your executor.
The person should be someone you can trust to carry out and understand
your wishes.
You can choose more than one person to be an executor. As the position
of executor involves some responsibility, you should obtain the person’s
consent before nominating him or her to be an executor.
Executors can have a large discretion in the way they will deal with
your property. However, it is possible for you to state your wishes
as to how you want your executor to deal with your property.
When property is left to children, the executor will usually act
as a trustee, looking after the property until the children are entitled
to take a share in the estate. It is important to think carefully
about what you would like done with the property during this period
including providing for their education, maintenance and personal
needs.
What if an executor dies before you do?
Your Will should nominate someone else to take over the role of executor
should an executor die before you do or not be prepared to act as
executor.
CHILDREN
Generally, the welfare of your children will be the responsibility
of the surviving parent. However, in the event that your partner or
ex-partner dies before you do, you should nominate a guardian to take
care of your children.
A guardian will look after your children and make all the decisions
that you would normally make as a parent. You can nominate one or
more persons to be a guardian. They may be a married couple or otherwise.
A guardian assumes a great deal of responsibility. Therefore, you
should nominate someone you can trust and ask the person(s) if they
will be the guardian before nominating them.
There is no obligation on the guardian you choose to take on this
role and responsibility.
WHAT PROPERTY CAN YOU DISPOSE OF IN YOUR WILL?
You can and should dispose of all of your real (house or land) or
personal (superannuation, money, shares, furniture, personal items)
property in your Will.
If you want to leave particular personal items to people it is important
that you are able to accurately describe those items. It would also
be helpful to place a label on them identifying them by number and/or
who is to receive them. This avoids any problems later in discerning
what items are to go to particular people. Your Will can provide for
you to make a list of such items. You can easily amend that list from
time to time. The list should be dated, signed by you and kept with
your Will.
Any liabilities (mortgage, credit cards, personal loans, unpaid accounts
etc) which you may have at your death should also be taken into account
in preparing your Will.
MATTERS AFFECTING YOUR WILL
Companies and Trusts
If you have a company through which you operate a business or hold
assets or that company is the trustee of a discretionary (family) trust
or unit trust which operates a business or hold assets - then you need
to consider what specific provision needs to be made in your will
concerning the company and the relevant trust and their operation after
your death.
Marriage
A Will is deemed to be revoked when you marry. If you do not make
a fresh Will after your marriage, you will be deemed to have died
without leaving a Will. You can make a Will in contemplation of your
marriage to a specific person. It will only apply if the marriage
takes place.
Divorce
If you obtain a divorce, your Will is revoked in so far as it makes
any provision for your former spouse. Therefore you should review
your Will upon marriage and divorce.
INTESTACY
If you do not make a Will and/or a valid Will, then in the event
of your death, your property is dealt with according to legislation.
This may not be in the way you would wish. Therefore, it is important
to make a Will to specify your wishes.
PROBATE
After your death, your executor administers your Will and (depending
on matters including the size of your estate's assets) must have your
Will probated. Probate requires legally proving your Will, obtaining
details of your assets and liabilities and ensuring that your property
is dealt with in accordance with your Will and the law. The law allows
certain persons to contest your Will. A well considered and prepared
Will should reduce the likelihood of your Will being successfully
altered by a Court.
HOW DO YOU MAKE A WILL?
We hope the above matters assist you in understanding the importance
of and need for a Will.
To ensure your Will provides for your wishes and needs, we recommend
that you consult a solicitor. We would be happy to help you. Preparation
of a Will in not as expensive as you think, particularly in view of
what it is intended to achieve (ie specifying your wishes and ensuring
those you care about know what those wishes are). We would be happy
to provide you with a quote for the cost of preparing your Will and
to assist you with this.
DISCLAIMER
This article is general in nature
and for information only. It should not be acted upon without obtaining
specific legal advice.
©Anne Hodgson & Co Lawyers, 81 Miller St
Carnegie,
Tel: 9578 7444 Fax: 9578 8744 Email: info@hodgsonco.com.au
