Who should make a Will?

• Anyone who is over the age of 18 and is of a sound mind can make a valid Will and should do so.
• Anyone who made a Will a long time ago should consider making a new Will.
• Anyone whose circumstances have changed - perhaps through marriage, the birth of children, divorce, remarriage, or the death of a close relative, for example - should make a new Will.
• Anyone who is living in a de facto relationship of any kind, especially if some common assets are held in the other partner’s name, should make sure that both partners make a Will.
• If you get married, any Will you made when single/divorced is revoked (cancelled). There are some exceptions to this, but it is always advisable to make a new Will after marriage.
• If you get divorced, any Will you made while married may be affected (this depends on the law of the different Australian States and Territories). In Victoria, for example, your divorce will revoke any gift in your Will to your former spouse, and any appointment of that spouse as Executor or Guardian. In other States, the effect of divorce is different. The safest thing to do is to make a new Will when you get divorced, and make another one if you remarry.
• If you deliberately destroy your Will, it will be revoked.
• Previous Wills and testamentary dispositions may be revoked by your new Will.

Benefits of having a Will

A Will is your last chance to speak from the grave as to how you want your possessions to be distributed on your death.

Without a Will you will have no say, and you cannot be sure that your assets will go to your loved ones. Your possessions will be distributed in accordance with government rules known as the ‘Rules of Intestacy’.

You may already have a Will, but wish to change or update it. The best way to do so is to do a new Will.

Everyone should have a Will, but it is particularly important when you:

• Get married
• Begin a family
• Start a business, or acquire a major asset
• Have separated
• Get divorced
• Are elderly or become unwell

Do you need a Will?

You often hear people say “you must make a Will” - it’s one of those things that “everybody knows”. But why make a Will?

There are two basic reasons:

To give you a say in what happens to your assets.
When you die you leave a lot of possessions behind, and they would hang around like orphans forever if no-one took care of them.

If you want a say about who gets them, and who organises it all for you, you have to leave instructions, and that’s where your Will comes in - that’s where you spell out who will get your assetgs, and who will control it all for you.

The second reason is about what happens if you don’t make a Will?.

Your assets then get distributed according to a formula in an Act of Parliament.
The formula might suit you or it might not.
For instance, your spouse might be entitled to a certain amount, and your children to the rest.

Making your own Will

Unless you are into fancy tricks to lock your assets away from your children (or the tax man), you don’t need to pay a lawyer to reinvent the wheel. You can do what most lawyers themselves do - start with a standard template and plug your details into it. Our Will Kit gives you the template and explains how to use it, in only 6 simple steps:

• Identify yourself as the Willmaker
• Revoke any former Wills
• Choose your Executor (you get the benefit of our Probate experience here, because we have seen plenty of lawyer-drafted Wills that caused unnecessary problems for people)
• Deal with Debts
• Say who gets what
• Sign it. (Here too you get the benefit of our Probate experience - we give you tips to help avoid inconvenience for your Executor).

How do you make a Will?

Anyone over 18 years of age who is of sound mind can and should make a Will. A Will must select at least one beneficiary to take the estate, and should also at least select one Executor who is responsible for the financial arrangements. The Executor can be one of the beneficiaries. A Will can also make arrangements for the funeral/burial and select guardians to care for infant children.

To make a Will that is legally valid, it must be in writing and be witnessed in the proper manner. Witnessing the Will is a technical matter, and the following rules should be followed:

• You need 2 witnesses who are both over 18 years of age and are of sound mind
• Your witnesses must not be beneficiaries or spouses of beneficiaries that appear in your Will. For instance, if you have left your estate to your daughter Mary, and her husband Bob witnesses your signature on your Will, then your daughter will lose her gift.
• An Executor, Trustee, or guardian can be a witness. However we recommend that you get completely independent witnesses (eg your neighbours, etc)
• Both yourself as Willmaker and the 2 witnesses must be present during the time that each of you place your signatures on the Will

How do you cancel a Will?

A Will is “revoked’ (that means, is made redundant, or no longer applicable) in the following circumstances:

• When a new, later Will is made
• When you marry or re-marry
• If your Will is physically destroyed

If you divorce, then any gift you made to your former spouse in your Will is revoked. That means your Will is still valid, but partially cancelled so far as the gift to your ex spouse is concerned.

In all these cases you should seriously consider arranging for a new Will to be made.

What is an Executor?

An Executor is a person or persons who you select in your Will to carry out all of your arrangements after your death. Their duties include:

• Making your funeral and burial arrangements
• Paying your debts
• Arranging for the distribution of your assets to the beneficiaries you have selected
• In general, representing you (i.e. your estate)
• You can select one or more Executors, although more than two becomes impractical. The persons you select should be persons not only that you trust, but who also have the organisational skills necessary to do the job. You may for instance, dearly love and trust your brother, Bob, but know that he is hopeless with money matters. Better then to select cousin Mary, who may not be quite as close, but is still a trusted relative and is also a Bookkeeper.

When selecting an Executor, you may also like to keep the following in mind: Your Executor can also be a beneficiary (for instance, your partner, parent, or child over 18)

• If you select only one Executor, consider selecting a ‘back up’ in the event that your first Executor dies before you
• If you do not have a close relative or friend that is suitable, you can nominate a Solicitor or the Public Trustee. They will charge your estate for this service

Executors as Trustees

The Executor will distribute your Estate to the beneficiaries you select in your Will. However, not all beneficiaries will take their gift straight away. The following are examples of beneficiaries that cannot hold their gift in their own right:

• Children (under 18 years of age)
• Persons who have a legal disability (for instance mental incapacity)

In these cases, the Executor has an extra duty, namely, to act as a Trustee for that person until they can take the gift for themselves. So in the case of infant children, that will be until they turn 18 years of age. For some beneficiaries, this may be for the term of their life (eg for the mentally disabled, or comatozed person).

The Executor will need to prudently invest the monies until the beneficiaries can take the gift. How the Executor invests the money is governed by legislation, and they should consult a Solicitor before making financial arrangements.

Beneficiaries: Selecting or Leaving out

Beneficiaries are persons or entities that you have selected in your Will to receive part or all of your assets in the event of your death.

You can select anyone that you like, and more than one person or entity can share in your estate. Examples of beneficiaries include:

• Spouses and partners
• Children
• Parents and brothers/sisters
• More distant relatives (eg cousins, uncles, aunts)
• Friends
• Charities

If you are wanting to leave assets to an entity, such as a charity, church organisation, or sporting body, then you need to check that they are a legal entity that can take the gift.

You need to be careful, also, about leaving out people who are closely related or dependent on you. For instance, some parents wish to exclude one of their children from taking part of their estate. This can be for many reasons, for instance because the child no longer has a relationship with the parent, or because the child has already received their share while the parent is alive. Other dependents include non relatives such as live in partners who have been with the Willmaker for a number of years.

These people may sue the Estate after your death asking for the Will to be revised to give them a share. The Court can decide to give them part of your Estate even though your Will specifically excludes them. What is even worse, is that the legal costs that are incurred by your Estate in defending any such action eat into the assets that you have left, and Court actions can be very expensive.

Guardians

Your Will allows you to make arrangements for the care of any children that you have who are under 18 years of age when you die. This is done by selecting one or more Guardians and writing it into your Will. For parents, this is probably the most important part of your Will.

What is a Guardian as part of my Will?

What is a Guardian as part of my Will?

Who can appoint a guardian?

As a general rule, each parent has the right to appoint a guardian or guardians to act after his or her death. Usually the appointment only operates if there is no surviving parent, although it is possible for a parent to appoint a guardian to act jointly with the surviving parent. Obviously a Court of law will carefully consider the wishes of the deceased parent on this sensitive issue, although ultimately if there is a dispute, then it is up to the Court to decide ‘what is in the best interests of the child’.

Who can be appointed Guardian?

Anyone you choose can be appointed – regardless of whether they are related to you or your child. You can choose one or more persons to be the guardian of your child, although disputes can arise if you select more than one person.

Childrens Charter

In addition to making a Will, we recommend that, if you have children, you draw up a Children’s Charter to ensure that instructions are in place on how you wish your children to be taken care of.

This document is simply a written record prepared by you as a sole parent or as a couple, which details what you want for your children should either of you pass away.

The document contains a set of instructions on what you want for your children and covers a range of life and lifestyle issues, such as:

• Where they will live
• Involvement with other family members
• Standard of living
• Schooling
• Religious instruction
• Tertiary education
• Overseas trips, other activities
• Health issues

These guidelines do not form part of your Will, but is a separate document. Your Will selects the guardian(s) and makes financial provision for your children, but does not deal with the above personal issues.

When do I really need a Will?

Anyone over 18 years of age should have a Will. But there are certain times in your life when it is particularly important to make a Will or revise your existing one:

• If you get married or intend to get married
• If you separate from your spouse or partner and you believe the separation will be permanent
• If you get divorced
• If a person in your existing Will dies or becomes incapacitated
• If you purchase a significant asset/investment
• If you get involved in a new business, company or trust
• If you change your name or anyone in your Will changes their name

Arranging the deceased’s affairs

When somebody dies, there are many things that need to be done. On the personal side there are things such as making the funeral arrangements, dealing with the deceased’s personal effects, and contacting relatives and friends. Whilst the Executor in the Will is the person that is responsible for all arrangements, normally a number of family members help in this regard. For the financial matters, the executor will be expected to make the decisions and sign relevant documents, and normally with the help of a Solicitor.

This is such a sad and stressful time, that it is difficult to think straight, or to think of the more mercenary things, such as financial arrangements. What I say is ‘first things first’. The following is a rough order of the things that you need to do:

• Contact family and friends
• Locate the Will
• Arrange the funeral
• Sort through the deceased personal effects
• Compile a Willmaker’s register of the deceased’s assets
• Get a copy of the death certificate (the funeral home will usually arrange this for you)
• Read the Will to the beneficiaries (this is optional)
• Consider seeing a Solicitor to assist you in dealing with all of the affairs

The main thing that you will need to do as Executor is to call in all the assets, and then distribute them to the beneficiaries. Calling in the assets includes:

• Selling any properties owned by the deceased – you may like to check with the beneficiaries first to see if they want that to be done. Before you can sell the property, you will need to change the registration of the property from the deceased to either yourself as Executor or register it directly into the beneficiaries names (check your State’s Titles Office for their specific rules in this regard)
• Selling/transferring shares – again you need to register the fact that the owner has now passed away, and that the shares are to be sold, or transferred to an entitled beneficiary. Most share registries require Probate to be obtained (that is the Court sanction that the deceased’s Will is the last valid Will) before they will do this.
• Bank accounts need to be closed. Many banks will act on a certified copy of the Will and the death certificate, as well as require you to fill in a number of forms.
• You need to locate all super funds that the deceased had. If you are unsure, look at the employers that they worked for. How the super is to be distributed will depend on the particular circumstances, such as who the deceased nominated in their super fund documentation (if any), or any nomination in the Will, and who the dependants are. Whilst there are new rules that say that you can make a binding nomination in specific ways, in the absence of doing this, the super fund trustee will decide how the moneys are to go (normally in accordance with the Will, or to dependants).

Guardianship and Administration Tribunal as part of a Will

Many people with impaired decision-making capacity are capable of making most, or at least some, of the decisions that affect their lives. When the decision-making capacity is seriously impaired, this will mean that certain decisions may have to be made by others.

The problem that arises is that no one has an automatic right to make decisions on behalf of another adult, no matter how closely the two are related. The decision-maker must be legally authorised to act on behalf of the person with impaired decision-making capacity before the decisions can have any legal effect.

Powers of Attorney Act 1998

The Powers of Attorney Act 1998 provided for enduring powers of attorney to cover personal, health and financial matters. An enduring power of attorney is a formal agreement giving someone else the power to make certain decisions on your behalf if ‘for some reason you are unable to act for yourself’.

Guardianship and Administration Act 2000

In the case where there is no enduring power of attorney then problems may arise. The Guardianship and Administration Act 2000, which commenced operation on 1st July 2000, complements the Powers of Attorney Act 1998 and is the final stage in the implementation of recommendations made by the Queensland Law Reform Commission to assist people with impaired decision-making capacity.

The Act established the Guardianship and Administration Tribunal that is empowered to make orders appointing people as guardians and administrators, and to set the terms of their appointment.

The Tribunal therefore provides a legal mechanism to enable decisions to be made when the need arises.

Role of the Guardianship and Administration Tribunal as part of a Will

The Tribunal’s main task is to determine whether or not a person with impaired decision-making capacity needs a guardian or administrator and, if necessary, to make an appointment order. The Tribunal’s other powers include giving directions and advice to guardians and administrators, monitoring, reviewing and amending orders, and ratifying and approving decisions by informal decision makers. Informal decision makers are people who have not been formally appointed by the Tribunal as a person’s guardian or administrator. A president, who is a lawyer, and one or more deputy presidents head the Tribunal. There are approximately twenty tribunal members, all either lawyers and/or people with extensive professional or personal experience dealing with people who have impaired decision-making capacity.

Dealing with Disputes as part of a Will

Most people with impaired decision-making capacity do not need a guardian or administrator because their family, friends or support network help them make decisions. The Tribunal will only appoint a guardian or administrator if there is no other way to ensure that the interests of the person concerned are protected and that his/her needs are met.

An applicant must be able to demonstrate to the Tribunal that there is a specific need for such an appointment and that existing arrangements are inadequate.

Hearings as part of a Will

Upon receipt of an application, the Tribunal will investigate the situation which has been referred to it and may make independent enquiries and collect information to enable the panel to make a proper decision.

The Tribunal examines documents and hears evidence in much the same way as a Court. The Tribunal must comply with the principles of natural justice. That is, to be fair (without bias) and to give people an opportunity to put forward their case. However, the Tribunal is less formal than a Court of law and is not bound by the legal rules of evidence. Hearings are held throughout Queensland in metropolitan and regional centres. There is no fee payable to the tribunal for making an application. We understand that since 1 July 2000 the Tribunal has dealt with approximately 2000 applications.

Superannuation and your Will – who gets it?

Since superannuation became compulsory in the 90’s, it has become one of the major assets that you will hold in your lifetime. Because it is such an important asset (and often has life insurance attached to it, making it even more significant) it is important to know how it is dealt with if you should pass away.

Many people think that their superannuation will be automatically dealt with in their Will, but this is not necessarily the case.

Superannuation is a trust structure - this means that there is a Trustee. For employer schemes this is often a large institution, for self managed funds, it could be a person or a private company. Members of the fund (who are entitled to the contributions) are called the beneficiaries.

When a member of the fund dies, the trustee of the superfund has a discretion (if this power is given to it by the Trust Deed, which it normally is) to pay out the super entitlements as the Trustee sees fit. The trustee does not have to follow the wishes set down in the deceased member’s Will (NOTE: In NSW, the superannuation does form part of the Estate). The Trustee will normally only deviate from the Will when they think that all of the deceased member’s dependants have not been adequately taken care of in the Will.

Example:
Harry is married with 2 young children (aged 3 and 5 years old). At the staff Christmas party Harry meets Sally, and falls in love. He divorces his wife and marries Sally. Harry and Sally start a new family and make Wills leaving everything to each other. Ten years later, at the staff Christmas party, Harry has a heart attack and dies whilst in the stairwell with his secretary, Amanda.

Sally is left with 2 children. The house has a mortgage on it, but there is Harry’s payout of $600,000 which should pay out the house and give Sally some savings to live off while she raises the kids.

The Trustee looks at Harry’s Will, and decides that the 2 children from his first marriage (they are now 13 and 15 years old) are dependents with financial needs (such as schooling). The super payout is split 40% to the first 2 children and 60% to Sally and her 2 children. After paying the mortgage, Sally has little left.

What should I do when preparing a Will?

Make a Will - if you don’t have one, you haven’t even reached first base! Try and be fair in your Will to all dependants. This will avoid problems later. Your Super Trustee is less likely to cut across your Will, and it reduces the risk of expensive litigation against your estate (brought by disgruntled dependents who have been left out).

You can consider making a Binding Nomination with your Superfund (if your Superfund offers this service). This form allows you to nominate beneficiaries of your choice to take your super entitlements if you pass away. The Binding Nomination (it must be this special form) is legally binding on the Super Trustee. The people you can nominate are:

• spouse, ex spouse or de factor spouse
• children
• other financial dependents
• your legal representative (as a trustee)

It lasts for 3 years, and then you have to renew it.

NOTE: For NSW residents, a binding nomination may not override the wishes in your Will. So cover your wishes for your super contributions in your Will.

Do I need an Estate Planner ?

If your needs are more complex, an estate plan extends to asset protection and the ongoing minimisation of income tax for your beneficiaries.

A minor change or addition to your Will can be done simply by adding a ‘Codicil’ which is an additional document that becomes part of your Will. An estate planner can help if you need to make an addition to your Will. In some cases, it may even be better to write a new Will.

You may also want to consider an estate plan if you have minor beneficiaries or mentally incapacitated beneficiaries. An estate planner can provide legal advice and guidance.

Other examples of how estate planning could be useful are when you:

• Want to pass on a family business
• Have a superannuation payout
• Want to make a gift to a charity
• Have a capital loss
• Have property which may be caught by capital gains tax, ie it was purchased after 19 September 1985
• Have life insurance
• Have family debts
• Want flexibility in distributing your assets, eg there are more children on the horizon or for tax purposes
• Have more complex affairs involving family trusts and family companies

So why not take control of your assets and create a Will today. All Australians over the age of 18 should have a Will. Remember that you are never too young to have a Will and whenever your circumstances change, you need to update your Will.

What is a Will?

A Will is a written document, in a special format, which is designed to carry out your wishes for your assets after your death. It can also provide instructions on other matters, such as selecting guardians for your infant children, and your funeral/burial arrangements.

A Will only takes effect once you as Willmaker die. It has no power while you are still alive. You can change your Will as many times as you like during your lifetime. Only the last Will that you validly make before you die will be used to reflect your final instructions.