A Will is the only sure way of ensuring your assets go to the people whom you wish to benefit.
A Will also ensures that you have appointed Executors who you can trust, who will carry out your instructions.
The costs of having a validly drawn Will by a solicitor is far less than a Will that you may do yourself which is invalid, ambiguous or complicated.
Having a properly prepared Will may result in positive tax and other benefits as well as reducing the probability of a claim against your estate.
A VALID WILL
In Victoria, to have a valid Will the Will maker must comply with Section 7 of the Wills Act otherwise it could be invalid:
1. The Will must be in writing and signed by the Will maker, and
2. the signature is made with the Will makers intention of executing the Will, and
3. the signature of the Will maker is witnessed by two adult persons.
It is important that the Will maker has the proper capacity to understand what he is doing before the Will is valid.
CAPACITY FOR MAKING A WILL
What is necessary for the Will maker to have sufficient capacity for making a Will is:-
1. He should be able to bring to mind the names of those people deserving in order to decide what provision he should make for them in his Will, and
2. He must understand that a Will is a document which will direct how his assets are to be disposed of after his death, and
3 The Will Maker should have some reasonable appreciation of what assets the Will is dealing with.
Recently, there has been changes to the Law that now allows a Will to be made for a person with a disability which result in them not having the capacity to make a will.
WILLS MADE FOR A PERSON WITH A DISABILITY
Under Section 21 of the Wills Act, the Supreme Court of Victoria may authorise a Will to be made on behalf of anyone who does not have the capacity to make a Will.
When such an application is the Court will consider factors that show:-
1. What the likely intention of the disabled person would be if they could make a Will, and
2. that it is reasonable for the Court in all the circumstances to authorise the making of a Will.
When such application is before the Court, the Court will require the following information to assist it in making a decision:-
1. What reasons are behind such application,
2. The assets the disabled person holds,
3. A draft proposal for a Will,
4. What incapacity the person suffers from,
5. Circumstances of persons that may have some claim or reasonably be expected to be given something under the Will,
6. Evidence of who the next of kin of the disabled person are,
7. Any other relevant information.
YOUR WILL AND MARRIAGE/DIVORCE
It is always important to consider updating your Will if there is a change of circumstance.
If you have a Will and you marry, your Will is may be revoked on the marriage and you may be treated as if you do not have a will. It is important to note that a Will is not revoked by separation or divorce.
If your Executors become elderly or die, or there are changes in your assets, the Will maker may need to update his/her will to take into consideration these matters.
It is always important to remember that a Will speaks from the date of death not from the date it is signed.
WHAT HAPPENS IF YOU DIE WITH NO WILL?
There are many misconceptions about what happens to people's assets if they die and do not have a Will. It does not go to the government but will go to the closest next relative of the Deceased pursuant to a set procedure laid down by Law.
The Law has been amended recently to give recognition to de-facto and "same sex" relationships in the distribution of a person's estate where no will has been made.
The people entitled to share in the deceased's Estate when there is no will in summary are:-
1 Deceased's spouse and/or "domestic partner" absolutely (if there are no children)
(the term "domestic partner" is a new term and means.) It covers situations where the deceased was in a relationship with another person (ie de facto or same sex relationship) where they were living together at the time on a genuine domestic basis and had been living in such a way for at least 2 years immediately before the death or otherwise there are children from the relationship who are under 18 years.
2 Where there is a spouse/"domestic partner" and children remaining- then majority assets goes to the spouse /domestic partner- remainder to any children
3. Where there is no domestic partner/ spouse but children then children take all the assets
4. Where there is no domestic partner/spouse or children then the residuary estate goes to the deceased's parent(s)
5. The list of next of kin continues is quite exhaustive.
Even if you think you are happy with your assets being distributed pursuant to the above list, then it would still be prudent for you to have a Will.
With a Will you are able to appoint a person you want to be the Executor of your Estate and the administration costs and charges are generally less than if you die without a will.
Where a Will maker has children or other beneficiaries she/he wishes to make provision for and:- * one is bankrupt, * one has a disability & is not able to manage money, & * the other is a gambler or drug addict,
then the Will maker may not be inclined to leave her/his assets to these beneficiaries as they may waste or eroded the assets by reckless behaviour.
One way in which the Will maker can protect his or her assets is to create a testamentary trust in the will. This is done by leaving the assets to the trust structure so that the assets are held by the Trustees who can use or transfer the assets or income for the benefit of those beneficiaries.
The Trustees then could purchase a house for the bankrupt child in the name of the Trust and the bankrupt child could live in that house with his family rent free. Again, the disabled child who receives a pension, could have his portion invested by the Trustees to ensure that the assets are maintained with appropriate capital growth with the income going used for holidays, cars, education or accommodation In regard to the child who has a gambling or other addiction the Trust could be used for that child's benefit without that person having the control of the monies.
A Testamentary Trust within a Will is therefore a very useful method of protecting those assets for those beneficiaries in most need. TESTAMENTARY TRUST AND TAX ISSUES
Creation of a Testamentary Trust may result in a number of positive income tax benefits for the beneficiaries of the trust. If the will is properly constructed to meet the individual's circumstance the trustee may have the ability to distribute income in a way to minimise tax.
Pensioners who have control or take a benefit from a trust structure may be subject to a new means test, which could reduce pension entitlements. It is advised that such persons speak to a solicitor to seek further and more detailed advice.
CLAIMS AGAINST AN ESTATE
There are two areas that are subject to a claim against a deceased's estate. These are:-
1 Claims against the validity of the Will
These claims are against the deceased's capacity to make a will. They normally suggest that the person did not have the mental capacity when making the will and therefore the will is invalid.
They can also suggest that the deceased was under duress by a person into making a Will and again did not have the appropriate capacity.
These claims are very difficult to prove.
2 Claims pursuant to the Administration and Probate Act
This is a challenge against the estate by an applicant who claims the deceased failed to make proper and just provision from the assets of the estate to the applicant.
The Law has been amended to allow any person to make a claim against a person's estate. Persons who could previously could not make a claim who now can make a claim include:-
step-children, de-facto's grandchildren brothers and sisters parents and any other person that is able to satisfy the Court that the deceased had an obligation to provide for them
The Court in determining such a claim would need to have regard to
the nature and length of the relationship between the deceased and the applicant any obligations and responsibilities of the deceased to the applicant, other applicants and the beneficiaries in the will the size of the estate the financial position of the applicant, other applicants and beneficiaries any disability of the applicant the applicant's age any contribution made by the applicant in building up the deceased's estate any benefit of any other person to maintain the applicant the character and conduct of the applicant any other matter the Court considers relevant
WHO CAN SEE A WILL
The amendments to the Wills Act allowed the following people to have access to the Will of a deceased person:
any person named in the Will any person named or referred to in any earlier will as a beneficiary any spouse of the will maker any de-facto spouse of the will maker any parent, guardian or child of the will maker any person who would be entitled to share in the estate if the will maker had died without a will any parent or guardian of a minor referred to in the will any creditor or other person who has a claim against the will maker who produces evidence of that claim
Any person can obtain a copy of the will from the Supreme Court, once a Grant of probate has been obtained.