The realities of estate planning

As Wills & Estates lawyers we’re often asked, ‘Do I need a will?’ The follow-up questions tend to centre around ideas like, ‘I don’t have much in the way of assets. Do I still need a will?’ Or ‘I don’t have any kids, so it doesn’t really matter, right?’ Or even, ‘Everything just goes straight to my wife, so why bother?’

 

What is a will?

As a first step, we need to understand what a will is, and what makes it legal. In general, a will is simply the ‘legal document that says what you would like to happen with your money, belongings and other assets (your estate) when you pass away’. But there are a few steps you need to take to make it a legally binding document.

 

In New South Wales, for example, to make a valid will it must:

  • be in writing (typed or handwritten);
  • be signed by the will-maker with the intention of executing the will;
  • the signature of the will-maker must be made or acknowledged in the presence of two (or more) witnesses; and
  • two of those witnesses must attest and sign the will in the presence of the will-maker.

Do I need a will?

In all situations, the answer to ‘Do I need a will’ is most certainly, yes.

The reality is that all Australians greatly benefit from having a will in place. Just as the definition indicates, your will ensures that your property and assets are distributed in the way that you choose and that your desires are protected. Importantly, it takes the friction and emotionality out of the process helping your family and loved ones deal with your affairs during a difficult time.

 

Read more:Will I or won’t I? Three reasons why you need a will

 

But I don’t have any assets?

We often hear this from younger individuals or couples just starting out. But the fact is that almost all Australians have far more assets and property than they realise.

Superannuation Benefits. Almost all adults have some superannuation benefits, but the superannuation death benefit is often forgotten. The superannuation death benefit is a benefit that is paid out to the beneficiary of the member upon the member’s death. Usually this will be to the surviving spouse or partner, their children or to the estate.

These amounts can be larger than you might think, and though they can’t be directly included in your will (as they’re held by the Trustee of the fund on your behalf), you can, and should, still control who receives your death benefit. Start by indicating in your will who you want to receive the death benefit. The Trustee isn’t bound by your declaration, but they will generally take it into account. However, to really ensure that your benefit is distributed according to your wishes, you should consider making a Binding Death Benefit Nomination, which will allow you to specify how you want your benefits distributed.

 

If you’re interested in setting up a Binding Death Benefit Nomination, get in touch.

 

Children and Pets. While children and pets aren’t property, you are still responsible for ensuring their care after your death – and this will likely be very important to you. That’s why it’s vital that you have a will in place that will determine who will take care of your loved ones after your death. Your will allows you to appoint a guardian, but if you don’t take this step, this may cause issues for the future care of your children and your children may be left in the care of someone you do not wish for.

 

Specific Bequests. You may believe you don’t have much property to leave to your loved ones. However, if you take some time to think about it, you will likely find many items that you would like to leave to bequest.

Some of these might include:

  • Your wedding ring or other precious or sentimental pieces of jewellery.
  • Photo albums or hard drives with pictures and photographs.
  • Journals or diaries.
  • Family pictures and portraits.
  • Heirloom china.

 

You might also like to consider donating some of your funds to your favourite charity. Your will is the way that you can do this.

 

My partner and kids will get everything anyway.

Under NSW intestacy law, when a person dies without a will, their spouse is entitled to inherit their entire estate. The only exception is if the deceased has children from a previous relationship. In that case, the spouse will get half the estate, a statutory legacy and the personal effects, while the deceased children will share the remaining half of the estate.

 

In effect then, it is correct that the partner and kids will receive everything – but perhaps not in the way you might imagine… or desire. You might like your children to have some of your personal items – such as photo albums, journals or even a coin collection. Or you may want to set up a method for ensuring your children have funds available for schooling.

 

Particularly when you have a blended family, it makes sense to set up a will that creates provisions to care for each of your loved ones in the way that you like.  

 

Read more:A cautionary tale

 

I’m not married, and I don’t have kids. So why bother?

While you may not have a spouse or children, you still have heirs. These are the people that the state considers your next of kin.

In NSW the order of inheritance would be (assuming there is no spouse, de facto or otherwise, or any children from any relationship):

  1. parents
  2. brothers and sisters
  3. grandparents
  4. aunts and uncles
  5. cousins, great-nieces and nephews
  6. second cousins
  7. the state government

 

Whether you have a small estate or a large one, you will likely have strong feelings on who should inherit in the case of your death. After all, your superannuation death benefits (for example) could make a big difference in someone’s life.

 

Time to Set Up Your Will?

If you’ve answered the question ‘do I need a will’ with a yes, there’s no better time than today to get started. Even if you’re young and healthy, it pays to be prepared. If the worst were to happen, you will want to know that your family – your spouse, your kids and even your pets – are taken care of in the way that you think is best.

Patrick Dawson Law
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Get in touch with our expert team for a free initial consult. We’ll help you get started on a will to protect your property and assets, and take care of your family and loved ones.

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