There are many areas of law which most of us will only need to engage with very rare and in very specific sets of circumstances – for instance, where the negligence of another person causes an injury or where a marriage breaks down. Some of us are lucky enough to pass through life without ever having to engage with these areas of our legal system.
One area of law that each and every one of us must consider and engage with, however, is that of Wills and Estates – in fact, to do so is to ensure that our hard-earned assets, built up over the course of a lifetime are protected, and our loved ones are provided for.
No matter who you are, at what stage of life you find yourself, or how wealthy or otherwise you may be, if you live in Queensland, the following will apply:
- You need a Will;
- You need an Enduring Power of AttorneyEnduring Power of Attorney; and
- At some stage, it is likely that you will act as executor for a deceased estate.
For this reason, we have prepared this five-part series on Wills and Estates, which encompasses this first article on Wills, and will be followed by articles on Enduring Powers of Attorney, Estate Administration, Probate and Family Provision Claims.
What is a Will?
In very basic terms, a Will is a legal document which allows the ‘Testator’ (you, the person making the Will) to set out how you wish your assets to be distributed upon your death. It is important to distinguish a Will from an Enduring Power of Attorney, which allows you to appoint somebody to make decisions on your behalf while you are still alive. The key point to remember is that a Will only comes into effect once you have passed away.
Do I need a Will?
In brief: yes. There is nothing as simple and effective as a Will when it comes to protecting your assets and your loved ones. As estate lawyers, we frequently come across situations where the absence of a Will results in the assets of a deceased being distributed in a radically different way than the deceased and their family would have contemplated. This can mean either loved ones going without and having to radically re-evaluate their lifestyles or the stress of a costly, bitter and lengthy family provision claim.
What happens to my assets if I die without a Will?
If you die in Queensland without having a valid Will in place, the way in which your assets will be distributed is determined by the Provisions of Intestacy. This refers to a ‘one-size-fits-all’ set of rules determined by the state government as to how the assets of a person who dies without a Will are to be divided up. As everyone’s personal and family circumstances are unique, by definition the way in which this ‘one-size-fits-all’ set of rules operates can often be very surprising to people who are unaware of it, and more sadly still, to their loved ones after they pass on.
For instance, most people instinctively believe that their surviving spouse would receive the entirety of their estate. Surprisingly, this is not the case. In fact, a surviving spouse may receive as little as $150,000 plus one-third of the remainder of the estate. In some circumstances, the intestacy provisions can see a deceased estate distributed to aunts and uncles (which, with respect to the many excellent aunts and uncles of Australia, is not where most people expect their estates to end up going). Worse still, there are situations where the entirety of a deceased estate may go to the state government, in precedence to, for instance, a dear friend or carer. We think it’s fair to say that this idea would be horrifying to a good proportion of Queenslanders! Add to this the fact that the state government could amend the existing intestacy provisions at any time by passage of legislation.
What is an executor and who should I appoint?
The first thing that most Wills specify is who is to act as executor (or executors) of the estate. An executor is the person who will apply for a grant of probate [hyperlink], ‘collect in’ the assets of the estate, pay out the estate’s liabilities and distribute the remainder to the beneficiaries in accordance with the Will. The executor may also need to maintain and invest estate assets so as to preserve their value, particularly in circumstances where the entitlement of a beneficiary does not vest until a certain age is attained. Given the nature of these responsibilities, it is imperative that only people who you trust implicitly are appointed as executors. These are usually close family members, but can also be professionals such as solicitors or accountants, who may charge a fee to be paid out of the estate.
You can appoint multiple persons to act jointly as executors (although we suggest no more than two). Importantly, we always suggest that an alternate executor is appointed for circumstances where your first choice predeceases you.
How can I divide my estate?
The first thing to consider when making your Will is whether you wish to give any specific items or sums or money to any specific people – for instance, an engagement ring to a granddaughter or $10,000 to a close friend. Not everyone chooses to make specific gifts under their Will, but they can be particularly relevant in circumstances where an item may have special sentimental value to a certain beneficiary.
The most important clause in any Will is the residuary clause. This is the clause which specifies how the residuary of estate (that is, everything that remains after the liabilities have been paid and any specific gifts have been made) is to be divided. This can incorporate a number of ‘tiers’, whereby the residuary can go to a certain person (for instance, a spouse) if that person survives, or otherwise to another person or class or persons (for instance, children).
At Forge Legal, we can draft residuary clauses such that the ongoing evolution of ‘classes’ of persons such as children or grandchildren is taken into account. That way, if a member of the class dies or a new member is born, there is no need to make a new Will.
We can also incorporate trust provisions into a Will, such that estate assets or funds can be controlled by a trustee and gradually distributed for the benefit of a beneficiary, or invested by a trustee until a beneficiary reaches a certain age.
What else can I specify in my Will?
Aside from their principal function of specifying how assets are to be distributed, Wills often contain statements as to the Testator’s intentions in relation to a number of other issues.
Often, parents will specify a person who they wish to act as guardian of their minor children upon the passing of themselves and the other parent.
Another common addition are statements of wishes as to funeral, burial or cremation arrangements. These could be as simple as a statement that such matters should be determined by the executor or go into detail about the conduct of the ceremony or the location of a memorial.
Whilst such statements are non-binding, they are a powerful expression of the Testator’s wishes and are often given serious weight and consideration.
How can I put a valid Will in place?
It is never too soon to make your Will. At Forge Legal, we make the process streamlined and simple, and we draft Wills in such a way that unnecessary amendments, later on, may be avoided.
The laws relating to the validity of Wills in Queensland are stringent and complex. There are countless issues which could render a Will invalid or a contest of a Will successful. The following are a non-exhaustive selection of examples:
- Taking apart, hand-amending, marking, re-stapling or improperly binding the document;
- Not complying properly with the requirements for the witnessing of the Will’s execution or using a beneficiary as a witness; and
- Not having sufficient notes or documentation relating to the mental capacity of the Testator at the time the Will was made.
It is imperative that you have an experienced solicitor assist in making your Will. There are simply too many formal requirements (and too much at stake for your family) to risk doing it yourself.
At Forge Legal, when we draft a Will, our first priority is to ensure that you have a valid Will which will mitigate against any challenge on the grounds of mental incapacity, formal requirements not being met, or allegations of insufficient provision being made to certain relatives or dependants. Wills are a big part of what we do, so we can immediately identify any risks which might apply, and make sure those risks are mitigated against.
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