Although many of us suffer from the illusion that life goes on forever, most of us are also smart enough to understand the importance of having a Will. It’s that little piece of paper that assures you, and your loved ones, that they will be cared for if/when something were to happen to you.
But, many of us also struggle to understand the legalities of Wills, which can lead to unintended complexity and even disputes once the Will needs to be put into effect.
For example, did you know that by getting married, any Will you made prior to that marriage (that does not include a “contemplation of marriage” clause) becomes void? This is particularly relevant following the recent amendments to the Marriage Act legalising same-sex marriage. Even if you were married in a country where same-sex marriage was recognised before Australia, there is legal uncertainty about whether any Will made following the marriage could be considered void from the date same-sex marriage became legalised here.
Rebecca Tetlow, partner at DDCS Lawyers in Canberra, explains. “When you pass away, the first step in managing your estate and affairs is to determine if you have left a valid Will. We are seeing an increasing number of home-made Wills or Wills made using a Will kit. It is often at this time that certain DIY Wills are found to be invalid, because they have not been worded or signed properly. Another way that a Will may be considered invalid is if you have married – or your marriage has been recognised – after the creation of your Will. This applies to de facto and same-sex couples, and can be a costly and complicated process to resolve.”
Rebecca says that in the absence of a valid Will, your estate is divided as per the “Rules of Intestacy”. These rules vary from state to state, but can put some families under enormous strain.
The Rules of Intestacy
If you pass away without a Will, or with an invalid Will, the “Rules of Intestacy” dictate what happens to your estate.
For example, in the ACT, if a mother of three passes away and leaves $500,000 in assets behind, her husband is granted the first $200,000 and the remainder is split between her husband and the three children (and held in trust until they are old enough to claim it). This can present great difficulty for young families, where the money is quite often needed immediately to help the family get through.
“It can also become complicated for families with children from previous marriages, where family members are estranged, and even families where a child has become a carer for the sick or ageing parent, and believes they are entitled to more of the estate,” says Rebecca.
“In all cases, the only way to avoid it is to ensure you have a valid Will.”
Preparing a new Will
If you believe your Will is invalid or out of date, you will need to have a new one prepared.
Phil Davey, partner at DDCS Lawyers, says that estate disputes are one of the fastest growing legal areas of the past 5-10 years. He attributes this to:
(1) the rise in DIY Wills that are poorly drafted or incorrectly signed;
(2) Wills that do not properly balance the interests of a second marriage or children from new/previous marriages;
(3) the size of estates being left by baby boomers, often including multiple properties; and
(4) increasing rates of dementia, allowing family members to attack the validity of a Will based on the person’s “frame of mind” when the Will was made.
“A poorly drafted Will is as bad as having no Will at all, and can throw families into chaos after the person passes away,” says Phil. “Even if your assets do go where you want them to, you need to ensure that an ‘Executor’ of the Will is named, so that a person you trust completely is the one who manages your affairs after you’re gone.”
Phil says that squabbles over Wills can be incredibly expensive, and the legal fees usually come out of the estate which affects everyone in the family.
Cost and process of preparing a Will
The cost of preparing a Will varies between legal firms, and will depend on the complexity of your family and financial circumstances. For example, if you have a blended family or where a business or trust is involved, a standard Will may not be suitable for you.
DDCS offers fixed prices to prepare Wills for individuals and couples in many circumstances, to ensure it remains affordable and allows people to get it done properly.
“The cost of preparing a valid Will is insignificant compared to the cost of going to court for an invalid Will – which can often be between $50,000 to $100,000, “ says Rebecca. “And when you have a proper Will prepared, you’re not just paying for the document. You’re paying for the advice that goes into the estate planning. Sometimes expert advice makes all the difference when ensuring that your assets are dealt with in the most tax-efficient way, and there is a strategy to ensure everyone is looked after.”
DDCS Lawyers’ approach to drafting a new Will includes:
(1) An initial meeting to allow your lawyer to understand you and your circumstances. They’ll talk through who is in your family, who needs to be looked after, the circumstances of your beneficiaries, and any assets that need to be dealt with. They’ll ask about your objectives and wishes, and offer advice and suggestions to make it happen;
(2) A draft Will is prepared and sent to you for review;
(3) A second meeting allows the document to be signed properly, and DDCS Lawyers provide a complimentary secure storage service for clients to ensure your Will is safe;
(4) You may also wish to draft an Enduring Power of Attorney, which gives legal authority to a person you trust to make decisions on your behalf if you become unable or incapacitated in the future.
To contact DDCS about preparing a Will for you and/or your partner, call 6212 7600 or visit DDCS Lawyers.
Original Article published by Rachel Ziv on The RiotACT.