A Will is the main document to facilitate the distribution of a person’s assets after death.
Wills are the formal written statement of a person’s instructions as to how their assets are to be dealt with after death. A Will appoints a person to be the executor, who carries out the testator’s (the person making the will) instructions. The beneficiaries are named to be entitled to a distribution of assets.
A court decides if a Will is the final Will and Testament and if it is then ‘probate has been granted’ and is the authority for the executor to administer the terms of the will.
The assets that can be distributed via a Will are called Estate assets. These are the assets that are personally owned by the deceased at the time of death or are paid to the estate during its administration and include;
- Personal belongings
- Investments, including property, cash, listed shares and managed funds
- Shares in an unlisted company, such as shares in a business
- Debts (money owed to you)
- Your interest in property owned as tenants in common.
Not all assets that form part of an estate can be distributed through the Will. These are called Non-Estate assets and include.
- Property owned as joint tenants (where ownership reverts to the other joint owner on death) – usually the family home.
- Bank accounts in joint names (ownership reverts to the joint owner on death).
- Insurance policy death benefit proceeds where the nominated beneficiary is a person or entity other than the life insured.
- Assets owned by a company.
- Superannuation death benefits – unless the nominated beneficiary is the estate or unless the super fund trustee uses its discretionary powers to pay the estate.
Dying without a Will, or with an invalid Will, is called dying intestate. This means that your wishes are ignored. There are established procedures for dividing assets if there is no valid Will. This procedure varies between States. A Will may be deemed invalid when
- Executed incorrectly, such as not having the Will witnessed when signed
- Completed under duress or while not of sound mind
- There are multiple Wills that don’t cancel previous Wills.
There are good practices in making a Will
- Being 18 years or older and with the mental capacity to understand the consequences at the time of signing the will.
- The words are not ambiguous
- It is structured to only take effect after death.
- It is in writing.
- It is signed by the testator or someone directed by the testator on the foot of every page.
- It is signed by 2 witnesses over 18 years of age who have witnessed the signing process, including each other’s signature.
- The same blue pen should be used through the signing process by all three persons.
- The witnesses are not beneficiaries.
When constructing a Will, it is useful to consider the consequences of your estate planning arrangements. There are overwhelming reasons to discuss the Will with those involved to minimise the post-death issues and misunderstandings.
When it comes to Wills legal advice is usually a wise expense.