We have all heard the saying “You can’t take it with you” and you certainly can’t control your money from the grave. You can of course make arrangements through the making of a Will during your life that will ensure that when you die, the NSW Supreme Court will make orders that your estate is to be distributed in accordance with your wishes.

The existence of a valid and clear Will helps your executor/s, and your loved ones manage your assets after you have gone. However a Will is not just about the management and distribution of assets: a valid Will is about taking a positive step now to help provide surety and security for loved ones left behind.

“A person’s Will is likely to be one of the most important documents they will make in their life.
Having no Will, or a poorly drafted Will, can have serious financial and other consequences for those who are left behind.”

Ref – Law Society of New South Wales

The preparation of a Will can provide an easier and less expensive way forward for your loved ones after your death. If you die without a Will (which is referred to as dying intestate) your assets will be distributed according to a formula set by legislation and your relatives will receive a defined percentage of your assets as provided for by legislation. In circumstances such as these, no consideration is given to how you may have wanted to distribute your assets.

What classifies as a valid Will?

To make a valid Will capable of being granted Probate by the NSW Supreme Courts you need to be:

  1. Over the age of 18 years old, unless you are legally married before then; and
  2. You must have ‘testamentary capacity’ which means you:

a. Know the legal effect of a Will;
b. Are aware of the extent of your assets;
c. Are aware of the people who would normally be expected to benefit from your estate; and
d. Must not be prevented by reason of mental illness or impairment from reaching rational decisions as to who is to benefit from your Will.

There are specific legal requirements for the preparation and execution of the document in order to ensure that the Court is satisfied that it is a valid Will, and for this reason its important that it is prepared, witnessed and executed properly.

Factors to consider when drafting your will

In addition to adhering to the specific legal requirements when preparing a Will, there are a multitude of factors that need to be decided upon and included in the document. These include but are not limited to:

  • Guardianship of children. Deciding who will be guardian if the unexpected happens is a decision determined by many variables such as shared beliefs or lifestyles, location, finances and more. Therefore this decision needs to be decided and detailed with regards to your wishes as to how they will be raised and by whom.
  • Sentimental possessions. It’s important not to overlook assets that may not have a high monetary value but are invaluable in terms of emotional value and who you want to bequeath these to.
  • Assets. When considering these it’s essential to take into account any borrowings that sit against them and the fact you cannot include any jointly-owned assets, unless the title to the property has been severed.
  • An executor. Choosing the individual or organisation that will become responsible for the management of your estate is a crucial decision. In the majority of cases it tends to be a loved one who is also a beneficiary.
  • Your beneficiaries. Who is receiving the proceeds of your estate? Loved ones? A charity? An organisation? It is critical to include the correct names and contact details or where applicable, an ABN, for every beneficiary in your Will.
  • Funeral instructions. Including any relevant funeral instructions in a ‘letter of wishes’ accompanying a Will helps to ensure that your wishes are met with regards to the funeral. Quite often, the Will is checked before any funeral decisions are finalised to ensure wishes are attended to.
  • Managing complex circumstances. Life is rarely straightforward, so it’s important to customise your Will to accommodate any complex circumstances, which can vary from excluding someone who considers themselves a beneficiary, multiple marriages, providing for a beneficiary with special needs, a SMSF and much more.
How can you prepare a will?

There are two options for preparing your Will: via a do-it-yourself (DIY) Will Kit or with professional legal guidance.

“…even with so much online information and do-it-yourself will kits available, we seem to still be getting it wrong. In fact statistics from the Supreme Court point to an explosion in disputed Wills in recent years, with a 59 per cent rise in litigation between 2005 and 2013. So why is this?”

Ref – Law Society of New South Wales

There are many DIY Will options online and from your local Post Office, and they may appear to be cost effective options for seemingly simple estates. However, difficulties arise when there are complexities or when the circumstances of an estate are not fully understood.

For example, a common mistake may be a gift of real estate to an individual without the realisation that the property is not owned in a way that allows such a gift. The property may be held as joint tenants with someone else or it may be held in a trust. Many people are not aware of the ownership structure of their property or assets. Such a mistake can have many implications for beneficiaries; it can significantly change the value of the pool of assets and division of gifts, and can trigger Family Provision claims or contest of the Will for entitlement from the estate.

Another common mistake occurs during the dating and witnessing of the Will. It is important that the dating of the Will is checked and that there are two eligible witnesses to the execution.

These two are not the only problems that frequently arise from DIY Wills. Some of the other common mistakes that can result in issues for loved ones left behind include: undated or misplaced Wills, failure to comply with legal formalities, incorrectly managing the ‘passing on’ of superannuation, not addressing health care management and unintended tax consequences.

Any mistake, whether simple or complex will lead to difficulties in obtaining Probate from the Supreme Court and may lead to questions by the Probate Registrar concerning testamentary capacity or the validity of the Will more generally.

How can you avoid the potential fallout of a DIY Will?

Professional advice can help you navigate personal and financial complexities within your estate that are not always straightforward to address or that your relatives may not accept.

If such complexities are not dealt with properly in documents and detailed records, they can lead to expensive legal estate disputes which your executor and loved ones will be forced to endure, and the cost of such expensive disputes are likely to be paid from your estate leaving less money and assets. Ultimately, a false economy.

Whilst there is little or no cost associated with making a DIY Will, working with a lawyer to draft your Will is an investment that will be worthwhile in the future. This certainly applies in most cases as the cost of making a Will with professional guidance, will most likely be far lower than the legal fees your loved ones may be subjected to if a DIY Will fails to comply with legal requirements.

In fact, The Law Society of NSW encourages people to seek expert legal assistance in preparing a Will, as this is the surest way to avoid common pitfalls and to find out what the legal position is, in relation to each person’s specific circumstances.

Please contact us with any questions you may have about your Will and estate planning.

Further information is also available on the Law Society website at: www.lawsociety.com.au/KnowYourRights