Making a Will
A will is a written document which sets out how a person wants their assets divided
after their death. Everyone over eighteen years should consider having a will. It
is the only way to ensure that your estate is distributed in the way you would like.
A will makes it easier for the beneficiaries of an estate to gain access to funds
in an estate particularly in small estates where probate may not be required.
A will must:
- be in writing, either typed or handwritten;
- give the appearance on its face that the will-maker (or "testator") intended by their signature to give effect to the will;
- be signed by the will-maker in the presence of two witnesses present at the same time when witnessing the will.
It is recommended that a beneficiary or the spouse of a beneficiary under a will
should not witness the will as they may lose their entitlement under the will if
they do so.
Executors
When you give instructions to make a will you will need to decide whom you wish
to be the executor of your estate. The person that you name to be your executor
must be capable of taking the responsibility of finding your most recent will, instructing
Lawyers to obtain a grant of probate, liquidating the estate assets and distributing
the assets of the estate to the beneficiaries. No special skills are required as
the majority of the work is done by executors under advice from Lawyers. Normally
a husband and a wife will appoint one another as executors. Often people appoint
their adult children as their executors if there are circumstances where their spouse
is unable or unwilling to act.
Gifts to Beneficiaries
The second aspect of will making is for the will maker to decide which assets go
to which beneficiaries. You may make any number of specific gifts. For example jewellery,
valuables, antiques or collections may be left to particular people. There may be
specific sums of money that you may wish to be given to particular people. In the
alternative, wills are often drafted so that the entire estate is given to the executor
to hold on trust to divide equally (or in specified proportions) to a class of beneficiaries
or to a named group of people. Gifts can be given with conditions such that the
beneficiary does not receive a gift until the condition is met. The most common
condition is a minimum age.
In any case it is most important that you do not attempt to give through your will
property that you don't own. For example jointly owned property such as real estate
held by joint tenants, shares in joint names and joint bank accounts will automatically
pass to the surviving owner regardless of the terms of the deceased will. Accordingly
it is pointless to attempt to make new interest in jointly held assets the subject
of testamentary gifts. Superannuation and life insurance commonly has nominated
beneficiaries and those investments will not form part of your estate. Rather, on
your passing the proceeds of the insurance or superannuation will pass directly
to the nominated beneficiaries. Similarly assets held by your family trust or discretionary
trust will not pass by way of your will. You may hold the shares of any company
trustee, but otherwise your trust will continue to operate in accordance with the
terms of the trust deed.
It is recommended that your will be drafted to include "substitution gifts" these
are provisions which take into account that your "primary beneficiary" may predecease
you. Wills often include a provision that if a primary beneficiary predeceases you
then their gift is to be divided between those of their children who survive you.
Some will makers like to name more distant friends and relatives and charities as
substitute beneficiaries.
Vesting Age of Beneficiaries
If your will creates a potential of you having beneficiaries who have not yet attained
the age of eighteen years then it will be necessary for you to specify a "vesting
age". Many will makers prefer that their children not receive their gifts under
the will until they have attained the age of twenty one (21) years, twenty five
(25) years or sometimes older. If your will creates potential for minor beneficiaries
then we would recommend that your will include a clause extending the executors
powers in order to give the executors a discretion to advance part of the minor
beneficiaries entitlement to them if the beneficiary falls on hard times. It is
generally prudent to grant to your executor a range of additional powers above and
beyond the powers that an executor has at common law.
Testamentary Guardians
You may wish to include a provision in your Will naming the person that you would
wish to be the guardian of any of your children that have not attained the age of
eighteen years at the date of your death. Please note that a provision naming guardians
in a Will is only a "wish" and accordingly cannot be enforced at law. In Australia
the Family Court of Australia ultimately decides questions of guardianship of children.
Disposal of your Body
You may wish to include in your will provisions relating to disposal of your body.
You may wish to specify cremation or burial. You may wish to include an indication
that you have a prepaid funeral plan. You may also wish to indicate a particular
type of funeral ceremony or a particular cemetery.
Outstanding Loans
When making your will you should consider whether you wish to forgive any loans
that are owed to you, otherwise all such loans will become assets of the estate.
Will makers sometimes include terms in their will which have the effect of evening
up their financial affairs with their children if some of those children have received
significant gifts prior to the will maker’s death.
Special consideration should be given to your will if you or your spouse (or partner)
have children from previous relationships.
Changing a Will
A will remains in force until the will-maker formally changes it by making a "codicil"
or by making a new will. Handwritten amendments have no effect once a will has been
signed. The will-maker may only make amendments to the will before signing. In such
cases the will- maker and the witnesses must sign or initial in the margin or near
the alteration. If this is not done the Court may assume that the alteration was
made after the will was signed and the amendment may not be effective.
Revoking or Cancelling a Will
Your Will will be revoked by marriage, unless it was expressed to have been made
in contemplation of that marriage. If you marry after making a will that was not
made in anticipation of the marriage, you should make a new will.
A divorce will not revoke the will but it will invalidate any gift to your former
spouse and the appointment of that spouse as an executor, trustee or guardian (unless
the Court is satisfied that you did not intend the divorce to revoke the gift or
appointments).
There are several ways of revoking your will which include:
- making a new will;
- destroying the will with the intention of revoking it;
- writing on or amend the will in some way that will satisfy the Court that you intended to revoke it.
If any of these options are used the will-maker will die "intestate" unless a new
will is made.
Challenging a Will
A will may be contested on the basis that the will maker did not intend the document
in question to be their last will and testament. Normally wills can only be contested
on the basis that they are invalid because the will maker made a later will, the
will maker did not have the mental capacity to make a will, the will maker's signature
was forged or parts of the will were changed after it was signed, the will maker
was tricked or pressured into signing the will, or the will was revoked.
In any such cases it is necessary for the person contesting the will to have sufficient
evidence in a form acceptable by the Court, and sufficient to persuade the Court
to make relevant orders.
Prior to an application being lodged with the Court to contest a will it is almost
invariably necessary to obtain a barrister's advice as to whether the evidence is
sufficient.
Claims for Provision From Estates
Dependents of a deceased person who feel that they were not properly provided for
under the deceased's will may make application to the Court under the Succession
Act. The agreed person can apply to the Court for provision from the will regardless
of whether they were mentioned in it or not.
Such application must be made within twelve (12) months at the date of death. In
certain circumstances the Court will approve applications under the Act outside
the twelve (12) month period.
The Act specifies classes of persons who may bring an application. Eligible persons
are generally specified family members or dependents.
In order to make a claim under the Succession Act the applicant must provide evidence
of their needs and that they were not properly provided for in the will. The Court
may take into account many factors including the character and conduct of the applicant
during the deceased's life, contributions that the applicant made to the deceased's
property and well being during the deceased's life and any other factors that the
Court regards as relevant.
In certain circumstances the Court may be prepared to make orders in respect of
property of the deceased's that the deceased disposed of prior to their death. However
to get those sorts of orders the applicant would have to provide sufficient evidence
to show that the deceased disposed of that property specifically with the intention
of defeating a Succession Act claim.
Generally claims under the Succession Act have to be made without delay in order
to avoid the estate being distributed to beneficiaries who may deal with it in a
way that makes it not recoverable.
Procedure following Death
If you are named as executor in a will then immediately after the death of the testator
you will be responsible for organising the funeral, finding the deceased's will
and determining whether it is necessary to apply for Probate.
You must do whatever you can to secure all of the deceased's assets to ensure that
they are not taken by people who think they have the right to them.
Generally the funeral director will order a Death Certificate from the Registry
of Birth Deaths & Marriages. The Death Certificate is normally sent to the executor
within three (3) weeks of the funeral.
The question of whether Probate needs to be obtained is determined by considering
the nature of the assets. If there is any real estate in the deceased's sole name
then almost certainly Probate will be required. Essentially, the Grant of Probate
is a declaration by the Supreme Court that the will is valid and that the executor
is entitled to commence dealing with the estate assets.
An application for a Grant of Probate involves publication of a relevant notice
in a newspaper circulated in the area in which the deceased lived, identification
of all of the deceased's assets, preparation of the proper documents making the
application for Probate and lodgement of the probate application at the Supreme
Court together with the appropriate filing fee.
Estate assets must not be dealt with until Probate is granted, except that some
banks may be prepared to release to the executor sufficient money to pay funeral
expenses on production of the original death certificate.
Failure to Leave a Will
When a person dies without leaving a will they are said to have died "intestate".
If a person dies intestate then an interested person (normally the next of kin)
will need to determine whether an application needs to be made in the Supreme Court
for "Letters of Administration". The principals and procedures are similar to the
process of applying for Probate
However the identification of the beneficiary of the estate are determined by reference
to the "rules of intestacy". The rules of intestacy are in effect a formula for
determining who receives the estate. If application of the rules results in no living
beneficiaries then the estate is said to be "bona vacantia" (or "for the good of
no one"). In those circumstances the estate vests with the government.
Interpreting Wills
Occasionally a person will die leaving a will that contains ambiguities. If necessary
the executor of any other interested party may make application to the Supreme Court
for orders as to what the clauses mean. The applicant and other interested persons
may provide the Court with evidence as to the interpretation to be given to the
document. The evidence must be of a particular standard if it is to be admissible.
Procedure following a grant of probate
Once the executor of the will has obtained a Grant of Probate (or an interested
person has obtained Letters of Administration) the executor (or the administrator
as the case may be) has the task of putting into effect the will maker’s intentions
as expressed in the will. Generally this means liquidating bank accounts, transferring
shares and real estate and distributing chattels. In any case, beneficiaries don't
have the right to have assets of the estate until the Court has granted Probate
and an appropriate advertisement is published in the relevant newspaper. There is
also argument that an executor should not distribute to beneficiaries until an "executor's
year has passed".
The executor (or administrator) is responsible for applying estate monies to payment
of the deceased's death and testamentary expenses. These payments must be made before
any beneficiaries receive their gifts.
The executor or administrator is also responsible for ensuring that final tax returns
are done, that the deceased's name is removed from the electoral role, that all
estate debts are paid and all entitlements under the will transferred as appropriate.
An executor of a will may be entitled to payment for their pains and trouble in
administering the estate.