There is a lot to consider when making a Will.
Having a Will is the only way to ensure that your assets will be distributed the way you want. It mitigates potential arguments between your loved ones.
More than 50% of Australians DO NOT have a Will or a valid Will, According to Finder survey.
34% said ‘they just haven’t got around to it’.
14% think they don’t own enough assets or have enough wealth to justify the effort involved.
What happens if you die without a Will?
If you die without a Will, the probate process kicks in and the State will name your personal representative (the person who is now responsible to distribute your assets). Until the courts decide who will distribute your assets, they will be frozen. This will leave your loved ones without any financial support in this time of need.
If the court decides how your estate and assets will be distributed, it is carried out according to a strict legal formula. This means there is no opportunity to leave gifts or objects to friends and grandchildren, as these wishes cannot be carried out. Additionally, there’s excess fees and charges involved in probate which could reduce your estate to your heirs.
To make the process painless for you we have created a list of things for you to consider before making your Will.
Talk to a Financial Adviser
Most people assume that a Will and estate planning are the same thing. While they have a few things in common, they are not the same.
A Will is focused solely on your intentions and how your assets will be managed and distributed after you pass away.
An Estate Plan, however, covers more detail of your current responsibilities, assets, property and lifestyle while alive, as well as after you have passed away. It includes health and life decisions to be considered in the event you are unable to make those decisions yourself.
Choose your Will Executor
This is the person YOU appoint in your Will to follow your intentions and administer your estate after passing. This person or persons should be both trustworthy and possess good administration skills. Don’t just assign this role to your spouse or adult children as they will be dealing with grief of your death.
Choose guardians for your minor children
We recommend appointing both a financial guardian and a parental guardian, these should be separate individuals.
Usually, but not always, a guardian may also be one of the trustees for the property and money that parents have left for their children in their Estate. Guardians can act beyond a child reaching 18 years old.
In your Will it is not necessary to leave detailed instructions for your children’s guardians, this can be done by letter of intentions and can be updated every year.
Review your current overall wealth
It is important to have an overall understanding of your current and potential future wealth to evaluate your responsibilities if you were to become disabled or pass away, don’t just guesstimate!
Speak to a Financial Adviser to see if your wealth is enough to provide for your dependents and loved ones in the event you pass on.
You may want to consider additional insurances to assist with any shortfall.
Decide who you want to receive your assets
Beneficiaries are those who will inherit your estate assets when you pass away.
You should also consider substitute beneficiaries in the event your primary beneficiaries do not survive you.
You can gift specific belongings to certain people. You may also prepare a list of personal belongings to accompany your Will if you have yet to decide what to gift and to whom.
Think about the different scenarios that could occur after your death
Your executor or guardian might have predeceased you, include substitutes for these roles in your Will.
Your spouse has predeceased you or you have gone together in which case there will need to be further and more detailed instructions for your executors and guardians. These instructions form part of your Estate Plan and can be updated without altering your Will.
Today relationship breakdowns are very common. It is important that your Will and Estate Plan both contain a backup plan for when and if a relationship breakdown occurs.
This not only includes assets, property and superannuation, but your responsibilities for your children, this could include potential court orders and payments.