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WILLS AND INTESTACIES

Do you have a Will? (If so) Is it up to date? Does it comply with your present wishes?

Everyone knows what a Will is, and most of us have one which is (hopefully) up to date and contains instructions that are current. However, most lawyers will be able to recall situations in which the absence of a Will, or the failure to have an up-to-date Will, has resulted in a deceased person’s assets going to a person or people who almost certainly would not have benefited from the Estate if an up-to- date will had been signed.

Wills

A Will primarily contains directions as to who is going to inherit the property of the will-maker following death. In most cases the preparation and execution of a Will is relatively straight-forward, however a person’s circumstances can change and it is imperative that a new Will be signed in that event.

A common example of a change of event involves the marriage or separation of the will-maker, or the birth of a child.

In the event of marriage, the Wills Act specifies that a person’s Will is automatically revoked by marriage unless reference is inserted in the Will contemplating marriage. The reason for this is rather obvious - it would be a shame if, on marriage, a previous Will leaving everything to “Mum and Dad” was retained, ignoring the fact that the Will maker has married and may have even had children!! This does, however, necessitate the need to make a new Will on marriage.

The second scenario involves separation. The Wills Act provides that a Will is partially revoked on dissolution of a marriage to remove any bequests made in favour of the spouse on dissolution of a marriage. However, a marriage can only be dissolved once a couple have been living apart for two years. As a consequence it is essential on separating that a new Will be prepared by the will-maker setting out his/her new wishes concerning the disposal of property, otherwise there is the possibility of an estranged husband or wife inheriting on the death of the will-maker, which may be rather unfortunate, and certainly unintended. Similarly, the break-up of a de facto relationship may also require execution of a new Will.

Wills not only deal with the gifting of assets on death, but are also utilised to appoint guardians of infant children. In my experience this is a decision that can be very difficult for new parents - who should be appointed the guardian/s of their child or children in the event of the death of the both of them?? However, this does need to be considered and formalised in a Will, otherwise guardianship may pass to a person or persons that the will-maker may not have desired to be appointed.

Intestacies

In the event that a person dies without making a Will, then they are described as having died “intestate”, in other words the person has died without leaving a valid Will. In this circumstance the provisions of the Administration Act come into play and an administrator is appointed and assets distributed pursuant to formula contained in the Act.

The method of distribution of assets is dependent upon whether or not the deceased person was married, was in a de facto relationship and either did or did not have children. For example, if the deceased person was married, had entered into a civil union or had a de facto partner for more than three years, then it is likely that all assets would go to the spouse or the partner. Alternatively, in the event that the deceased person was married or involved in a civil union or in a de facto relationship and had a child or children, then the Act prescribes that all personal chattels and up to $155,000.00 worth of other assets goes to his/her spouse or partner, with the balance divided between the spouse/partner and children - one-third going to the spouse/partner and the remaining two-thirds divided between children. As you will appreciate, this can have a devastating impact upon the financial security (or otherwise) of a spouse or partner.

Conclusion
Arranging execution of a Will may not be the most exciting thing that you do this year, however, as they say, there is nothing more certain than death or taxes. Ensuring that you have a Will that is up to date and complies with your present wishes not only ensures that the appropriate person/s inherit your estate, and have guardianship of your children, but also reduce the expenses associated with administration of an estate.