You probably have a good idea of who you’d like to give your hard-earned assets to when you’re gone. Making a will can help ensure your assets are distributed the way you want.
Many people see making a will as something to do when they have children or other dependents to worry about. After all, they want to make sure that in the worst case scenario, their loved ones are well cared for. But what if that isn’t your life? What if you are single, or if you are in a relationship that may not be classified as de facto or a spouse relationship? Do you still need a will, and what should it look like?
Where there's a will, there's a way
A will is a legal document setting out your wishes for the distribution of your assets after you die, and who you would like to be responsible for carrying out your wishes. Typically, it needs to be a written document which you’ve signed, had witnessed by two people, and you need to be aged over 18 years old and considered to have the mental capacity to understand what you are doing for it to be considered valid. You should check whether your state or territory has any specific additional requirements to be valid.
You can write a will yourself using a kit – you can find a range online varying in price – or use a solicitor. Bear in mind, just because you’ve written a will and had it witnessed, doesn’t guarantee that it will be considered a valid document if it doesn’t meet legal requirements. Given the complexities, speaking to a solicitor may be helpful to ensure that your will meets the necessary criteria to be considered valid and that you’ve accounted for everything you need to.
No will left behind
The process and laws vary slightly from state to state if you die without leaving a will (known as dying intestate). Typically, the Supreme Court appoints an administrator (often your next of kin) to arrange your funeral, collect your assets, establish a family tree using certificate evidence and distribute the assets across your next of kin after paying any debts and taxes.
Your assets are distributed across your next of kin based on a specific formula. If you don’t have a legally recognised partner or any children, the order of priority is usually your parents, your siblings (or their children), grandparents, aunts and uncles, and then first cousins. In some instances, others can lay claim to your assets. For example, if you regularly volunteered at a charity or regularly donated, they may be able to petition the court for a portion of your estate.
3 reasons to write a will
There are a number of reasons to write a will.
1. Choose where your assets go and who executes your will
Maybe you wanted your best friend to have your collection of art or your furniture go to a particular charity. Or you were happy to have your assets divided amongst family, but wanted a cousin to inherit the bulk to help with their medical bills. If you leave it to the legal process, it’s less likely that any of these wishes will come to light unless your family specifically know of them and are happy to forgo their legally allocated shares to make it happen.
Dying intestate (without a will) also means a court-appointed administrator for your assets and organising your funeral. When you have a legally binding will, you can make sure the person organising your funeral and distributing your assets is someone you trust to carry out what you wanted. For example, you might feel a certain family member is better suited to the pressures of managing your estate than the person a court might choose to appoint. Or the relationship you have with a particular person may mean you feel they would better understand your wishes. Not having a will at very least can delay the distribution of your estate, which could be difficult depending on costs that may be incurred from your death - such as the funeral.
2. A clear picture of your assets
This is something that can actually be useful to you right now. Taking the time to write a will can help you get across all your assets and debts – ranging from finances and investments to physical possessions. Understanding the complete picture can help you plan ahead for your own life (not just your death) and also manage any areas which might be a concern for you, through a strategy.
Part of this might also include considering how any debts you’ve accrued would be paid in the event of your death. Usually, your assets are used to pay any debts first, before being distributed to your beneficiaries. Depending on your debts, there might be proceeds left for your loved ones – or not. Any remaining debt after your assets have been used to cover debt does not pass onto your beneficiaries unless the debt is a joint one (in which case, the joint partner to the debt would have to manage it). A financial adviser can help you evaluate this and whether there are strategies, like life insurance, you could consider to manage your debts and keep your assets for beneficiaries.
3. Lessen the stress for your loved ones
A court process is stressful but then consider what it might be like combined with the pressures of grief. Making a legally binding will can take some strain off your loved ones in a very difficult time for them – losing you. And it might give you the opportunity to offer some comfort beyond the grave where you’ve chosen to make certain bequests.
However you choose to approach writing a will, make sure it meets your hopes for distributing your assets and remember it’s okay to change your mind and write a new will at any stage through your life. As part of this, don’t forget your superannuation might not always fall under your legally written will, so you might need to nominate any beneficiaries directly with your superannuation provider.
This information has been prepared by Westpac Banking Corporation ABN 33 007 457 141 AFSL & ACL 233714 (Westpac) and is current as at 24 October 2017. BT Advisers are representatives of Westpac. BT Advice is a division of Westpac.
The information in this article is general information only. It does not constitute any recommendation or financial product advice. It provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The information has been prepared without taking into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. Before acting on it, you should seek independent financial and tax advice about its appropriateness to your objectives, financial situation and needs.
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