5 Reasons Why You Should Review Your Will Regularly

Background

The old English proverb claims ‘where there’s a will there’s a way’. Unfortunately, the way may be difficult if there is no Will! Research shows that almost half of Australians do not have a Will and for those who do many are not up to date (meaning perhaps as little as 35% of adults have a current Will) exposing their family to complications and possible financial difficulties on their death. By making a Will you ensure that your wishes for your estate are respected after your death.

If you die without a Will you are said to have died intestate. In the event that a valid Will has not been left it will be necessary to apply for ‘Letters of Administration’ to the NSW Supreme Court. Legislation details how an estate may be distributed and by whom. The Supreme Court can appoint an Administrator to distribute the estate under the Succession Act 2006.  This may not reflect what you would have wished.

Wills can help provide the necessary guidance for the family of the deceased at a stressful time and a solicitor can assist in ensuring that your wishes are clearly expressed in your Will particularly noting the trend to more contested Wills.

Why should I use a solicitor for my Will?

There are many advantages to instructing a solicitor to draw up your Will. Sometimes DIY wills do not comply with legal requirements which could cause your estate extra expense after your death. A solicitor will also be able to advise you on the effect of tax on your estate and consider the implications for estate planning.

How the Will is structured can make, for example, a difference to the tax paid from superannuation. When paid to a spouse or a dependent child, death benefits are exempt under the Income Tax Assessment Act but this is not the case for other recipients.

Recent legislation has made the situation even more complicated. For example, the NSW Succession Amendment (Family Provision) Act 2008 increased the categories of eligible applicants for family provision who could potentially challenge a will, to include persons in a close personal relationship with the deceased.

It is very important to check with your superannuation fund who is named as your beneficiary. In Webb v Teeling 2009, discussed below, failure to make a binding death benefit nomination lead to unexpected consequences.

A solicitor can act as or provide advice regarding the important role of Executor. Administering an estate is not always straightforward. The Executor has a fiduciary duty to the estate and it can be important for the Executor to seek legal guidance over these duties.

An Executor administers the estate including arranging the funeral, collecting assets, paying debts and distributing the estate to beneficiaries.

An Executor has a range of other duties too such as insuring assets, investing unused funds and complying with any tax obligations such as filing tax returns.

An Executor may have to defend an estate if the validity of a Will is challenged under family provision legislation or a dispute over the administration of the estate.

It is clearly important to choose your Executor carefully and, in many circumstances, he or she will require specialist legal advice.

A simple Will may just not do. A cautionary tale about what happens to your superannuation after you die.

Sometimes a simple Will will not be effective. Some aspects of a person’s wealth cannot be left in a Will. Superannuation, for example, is held in trust and is dealt with according to the rules governing how the fund has to operate. As such it is not an asset of the estate unless you have stipulated by a nomination that it is to go into the estate. Webb v Teeling 2009 demonstrates how failure to make a binding death nomination, effectively leaving the distribution of the death benefit from the fund at the trustee’s discretion, can lead to unintended consequences.

Following a member’s death, the trustee of the superannuation fund wrote to potential beneficiaries advising them of the proposed distribution. The deceased’s de facto partner complained that her distribution was not adequate, subsequently complaining to the Superannuation Complaints Tribunal. The Tribunal set aside the trustee’s decision and increased the amount she was to receive which, of course, reduced the amount available to other beneficiaries. The deceased’s daughter appealed but the Federal Court dismissed the appeal.

What does it mean? 7 Reasons for Making Your Wishes Clear in a Will. The 7 C’s!

CONTROL: With a Will you get to choose who benefits from your estate otherwise State legislation will determine who benefits. You will be able to appoint the person(s) you trust most as Executor to carry out your wishes.

CONTINUITY: If you have a family business you can nominate the personnel to continue the smooth running of the business during the administration of the estate.

CHILDREN: If you wish to take care of infant children and, for example, appoint guardians this can be stipulated.

COSTS: The administration of the estate should be more efficient, minimising the costs of probate, and minimising delays in distribution.

CHARITABLE GIFTS: Many people will want to leave legacies to their favourite charity or charities and a Will is the mechanism to let your wishes be known.

CERTAINTY: A Will can provide peace of mind for both yourself and your family avoiding unnecessary stress at a difficult time for all concerned.

CHALLENGES: With an appropriately drafted Will you can minimise legal claims against your estate.

Why should I review my Will? 5 key events that should trigger a review of a Will.

It is also essential that your Will is regularly reviewed to ensure it is current. Key events that warrant a review include:

-if you separate, divorce or re-marry

-if you have children or grandchildren

-if you dispose of a significant asset such as a family business or property

-if a beneficiary dies

-if an Executor dies or becomes incapacitated. In such cases it will be necessary to apply to the court for Letters of Administration instead of a Grant of Probate. This can be costly and time consuming.

Tomorrow is not guaranteed: accidents and loss of mental capacity can happen at any time so having a current valid Will is the safeguard of your wishes and makes sure you have the last word.

Contact Us - Szabo & Associates Solicitors

Szabo and Associates, Solicitors, offer a comprehensive service drafting Wills and in Estate Planning. We can also assist in both defending a Will or challenging one as appropriate and providing specialist advice to Executors. It is also important to review your Will as your circumstances change and we offer a regular review service to ensure it is current. Contact us now on (02) 9281-5088 or fill in the on-line form.