Having a valid Will is just one important part of your Estate Planning process. You can learn more about the Estate Planning process here.
A valid Will let’s your loved ones know exactly how you want your assets distributed. Your Will could be as simple as ‘all my assets are to be given to my partner’. However, we find that most people have more complex family structures and need to give greater consideration to both who, and how their assets are distributed.
An example could be that you have married, had children, divorced, then remarried and had more children. Leaving your assets to your current partner means children from your first marriage may not be looked after. Or perhaps you have a child or other dependant that will need care for the rest of their life, they may need a greater share of your assets than the rest of your family.
Something else worth considering is any tax implications that may be incurred as a result of your gift. No tax is payable on cash or assets received as an inheritance however, the sale of an asset may incur Capital Gains Tax. There are ways to help protect your assets.
It’s important to talk through your requirements with a professional to ensure your loved ones are cared for.
There are some do-it-yourself Will kits available, and these may work if you don’t have many assets or people to distribute your assets amongst. However, we recommend that you see a professional to make sure your Will is valid and that you have covered all aspects correctly. Errors in Wills can end up costing your estate (and therefore your loved ones) thousands in legal fees, and cause delays in the distribution of assets. For a fairly modest fee, a professional can give you peace of mind that there will be no issues and your wishes are met.
You should review your Will on a regular basis to make sure it still aligns with your wants and your current situation. You should also update your Will when any major life event occurs such as moving in (or out) with a partner, marriage, divorce and having children. There are other events that may require you to review your Will such as your Executor passing away or becoming ill, you start or close down a business or move overseas.
Your Will should have the following:
There are some items that don’t need to be included in your Will. Your superannuation and life insurance policies would have asked you to nominate a beneficiary when you created the policy. This is who your policies will be paid out to. You may have the option to nominate your beneficiary as you Legal Personal Representative (LPR), this essentially means your beneficiary is your estate. Officially the LPR is ‘the executor of the will or administrator of the estate of a deceased person, the trustee of the estate of a person under a legal disability or a person who holds an enduring power of attorney granted by a person’.
Jointly held assets should also not be included, this would include jointly owned bank accounts, property etc. Typically, these will pass to the person you hold these assets with. You can specify in your Will that you have different wishes but these wishes may not be met.
If you pass away without a valid Will in place (known as ‘dying intestate’) the State will decide what happens to your assets. Here in WA, section 14 of the Administration Act 1903 (WA) will be put in place and this sets out the formula for dividing your assets amongst your surviving family members without any of your wishes being considered.
We have a real-life case study where a client died without a valid Will in place, click here to find out what his wife experienced after his passing.
There will also be additional fees and costs associated with this meaning you will have less to pass on.
The Executor has a very important part to play in ensuring your Will is executed as you wish. The role is varied, with many responsibilities.
If your family haven’t or aren’t able to organise your funeral then your Executor can do this for you. They can also notify your beneficiaries if this hasn’t been done.
The rest of their role is to manage, administer, direct and dispose of your assets as you have determined.
The Executor will need to apply for Probate (see below), ensure that they follow the law in administering your estate, pay off any debts and distribute the balance of the estate to your beneficiaries.
During the probate period, they will also be responsible for taking care of any business interests and ensure all cash, income and assets are safeguarded. It may also be necessary to complete and lodge tax returns with the ATO.
Once Probate has been granted, the Executor will need to pay off any debts before distributing remaining assets.
We suggest the Executor have legal assistance in this process as it can be a complex area, and if doing this while still grieving a loved one then it can be a very emotional time too.
Once your Will is complete, you’ll need to sign your Will in the presence of two witness, who will also need to sign. Your witnesses need to be over 18 and cannot be a beneficiary of your Will.
You should let your Executor(s) know that the Will has been completed and provide them with a copy. Make sure the original copy is stored away safely and securely and that your Executor knows how to find it. Many law firms will offer secure storage of your Will and associated legal documents if they have prepared the documents for you.
If your storing the document yourself, consider keeping it with other important documents such property titles and keeping copies of your Life Insurance policy and other useful items (bank account details, share holdings etc.). You don’t need to register the Will.
Of course, your family and friends grieve and celebrate your life at your funeral.
Your Executor will need to obtain your original Will to begin the process, as well as the original copy of your Death Certificate. They’ll need to apply for Probate through the Supreme Court of Western Australia. Assuming all is well with your Will, the court will make a grant allowing your Executor to have authority to deal with the necessary businesses and institutions to commence the gathering and then distribution of your assets.
*Note, the process above is for Western Australia, other states and territories may have a different process.
It is very important that you understand that the information above is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. It is also worth noting that the Australian financial and taxation system is ever changing, and the information above may no longer be relevant. Again, we suggest seeking professional advice from a financial adviser before proceeding.