As we have spoken many times before in our educational series, life is filled with great adventures and opportunities, so planning for the future becomes very important when navigating life’s journey.
Most of us think that we don’t have to think about death, but it’s the one thing that accompanies us from the very moment we are born. Life is a journey and one day that journey will come to an end. How can you prepare, or to be more precise, how can you help your loved ones that are left behind? Do you wish to bequeath special possessions or assets to specific persons?
A WILL is one of several important documents that really matters in your life. It sets out your wishes and how your assets, your property, your possessions and your wealth is to be distributed when you die.
What does a WILL do?
A WILL is a legal document. It sets out who will receive your property/assets from your ESTATE and how they are to be distributed. Having a valid WILL gives you the opportunity to make sure that your wishes are adhered to and how they are to be carried out.
Some people might think they may not have reasonable assets to bequeath to others. In reality, what we deem to be valuable or not valuable can be subjective and confusing. Most people may carry debt of some kind or another and sometimes, we may allow negative thoughts of having debt to cloud our thinking and to blur the value of our lives. What we have and what can be given out (disbursed) especially to our dependants and financial dependents in the event of death, can truly make a difference and impact the lives of others in a positive way.
Important points for you to consider when making a WILL
- YOUR EXECUTOR
The person(s) you appoint as executor are the people who will carry out the instructions laid out in your WILL. An executor will often seek guidance from a qualified legal professional such as a lawyer in administering your estate and its disbursements.
- YOUR ASSETS
It is always best to accurately record assets such as a house, property, investments, cars and so forth as being owned by you within the WILL. Listing down all your property/assets and how they are to be valued and distributed is important. Having all the appropriate certifications such as title deeds, trust deeds, enduring powers of attorney (EPOA) and so forth held in the one place and noting these within a covering letter of instructions to your Executor, is a clever idea.
- YOUR BENEFICIARIES
Beneficiaries are the people, organisations or even charities who will receive specific gifts and/or a share in your estate. The value and amounts paid out of an estate is usually the residual value that remains after the payment of any debts and testamentary expenses. Each beneficiary’s share can be distributed in any proportion that is pre-determined and stated in the WILL. The disbursement can be expressed as a percentage of what remains in the estate.
- YOUR SPECIAL POSSESSIONS
Items that are special or carry emotional value can be named specifically in the WILL and to whom those items are to be given to.
- YOUR PROFESSIONAL ADVISERS
Seeking help from professionals such as your accountant, a tax professional or a financial adviser is worthwhile. Making note of the various professionals and their contact details in the letter to your Executor is important. That should enable the executor to gather relevant information and
gain greater clarity and control over in managing the affairs of your estate.
What happens when you die without a WILL?
It can be correctly said that no one should die without having a WILL. Why? It leaves so much uncertainty and potential problems for those who are left behind, from a surviving spouse, children, siblings, partners, ex-partners and children from blended families, all of whom may have a valid claim on the deceased’s estate.
If you die without a WILL, this is known as ‘dying intestate.’
Within Australia, the rules that govern intestacy varies across each of the states and territories. As an example, in NSW if a person dies without a WILL the estate will pass to the State (CROWN). In QLD however, it usually passes to the next of kin such as a spouse. So, making sure that you have a valid WILL and that it carries your wishes and instructions is particularly important.
Some important things to know
- You may have insurance cover within your super fund accounts. This is known as Death or Life insurance cover. Together with your super account balance, the total death benefit can be a substantial amount of money that becomes payable in the event of a member’s death. Nominating your BENEFICIARY, that is who should receive the money in the event of your death is just as equally important as preparing a WILL.
Under superannuation trust law and the governing trust deed of the fund, the fund’s trustee can only pay the death benefit as prescribed by superannuation legislation e.g. to a dependant such as a spouse, a child, or a person who is financially dependent upon the member at their time of death. In cases where neither exists, the trustee may consider paying the benefit to the estate i.e., to the executor where there is a Will, or to the Administrator of an estate where the member has died without a WILL. Accordingly, it is important that you nominate a beneficiary and notify your super fund.
- There are several other things you can consider when organising a WILL, such as putting in place a Power of Attorney (POA) or an Enduring Power of Attorney (EPOA). We will not cover off on these two legal documents here, apart from saying they serve as an important part of a person’s estate planning process. These legal instruments may assist with a person’s deteriorating health condition. They enable and empower specific individuals whom you trust to make decisions about personal matters, financial matters and medical care during your lifetime and beyond life.
Life’s journey is never straight-forward. It can be a bumpy ride especially when we have had numerous complexities in our family, financial circumstances and business life.
Your Will and organising an effective estate management plan, provides you with the opportunity to customise and accommodate for your unique personal circumstances.
Need more help?
There are many on-line resources that are available to you. Resources filled with financial education, tools and calculators designed to guide you along the path of financial literacy. A good example of this is the Australian Securities Investment Commission (ASIC) website called Moneysmart. Here you will find resourceful information to get you started. See link below.
Wills and powers of attorney
