20th Jul 2016
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Wills: time to leave your legacy
Author: Rod Cunich
Hand signing a last will and testament form

When is the right time to write a will?

The answer is really simple: before you lose your mental capacity or die. 

Just tell me when you will lose your marbles or your life and I’ll fix up a will for you the day before. If there is nothing in your calendar dealing with either event, then the timing becomes a bit more of a gamble.

Earlier this week, as I was hurtling through the air toward a car that had pulled out in front of my bike, it occurred to me in a flash that ‘now’ might be my last moment … and I’m not old. Thankfully it wasn’t, but I have bruises, breaks and a painkiller haze to remind me that none of us can be assured a long, healthy life. Or one without a life-changing injury.

We can’t assume writing a will is something we can leave until our ‘old age’. Many of us don’t make it to said ‘old age’. In fact, approximately 34 Australians between the age of 18 and 64 prematurely die every day through accident or disease.

So, when should you do your will? If you don’t have one, ‘now’ would be good starting point. Contrary to common belief, I can testify to the fact that signing a will won’t actually kill you. Nor will signing a Power of Attorney make you lose your mental capacity.

So what are my general recommendations?

First will
Create a will when you first have property or a child (to provide for a guardian for the child). Young people often own wealth they don’t realise, such as superannuation death benefits and/or a life insurance policy (often part of your super package). These may not be assets you can spend today, but die and these assets suddenly materialise and need to be managed and distributed. Without a will it’s a bit of a lucky (or unlucky) dip as to who receives your assets.

Each state and territory in Australia has intestacy laws that operate as a de facto will for those who leave no will when they die. Where there is no will, assets typically go to the spouse. In some states a spouse has to share the assets with children (there isn’t even a consistent outcome across the country). If the spouse is predeceased, assets usually go to the children equally. If there are no children, typically they will go to the parents, and from the parents down to other family members.

If there is a spouse (even if separated) and a de facto, then things get really interesting because in some states, they have to divide the estate ‘by agreement’. Throw children into the mix and you have the plot for a horror movie!

This procedure requires an application to the court, which is more expensive than a probate application because someone has to start from scratch. Legal costs escalate, delays often occur and claims against the estate often come out of the woodwork by people who claim they should have received a benefit that wasn’t provided for in the statutory formula.

Am I scaremongering or being a tad melodramatic? If only it were fantasy. Ever heard the saying that ‘truth is stranger than fiction’? Search around the internet for stories and court decisions about family hardship and disputes arising from the absence of a will or a ‘proper’ will. The reality is that living without a will is like playing Russian Roulette with your estate.

Here is a sample of what can occur:

Mary was an abused child. Because of this, she left home as soon as she could, at age 16.  She never spoke to her parents again. With that part of her life behind her, Mary put herself through university and started a career.

Then she met Joe, a successful stockbroker whom she married. Joe was slightly older than Mary. They enjoyed a good marriage, and Joe’s family became her family. Alas, after eight years of marriage, Mary and Joe died in a car accident. They had no kids. Neither of them had a will.

Being the older of the two, Joe was deemed to have died first and his wealth notionally passed to Mary. Under the intestacy laws all of Mary’s acquired wealth then passed to her estranged parents – the last people on earth to whom she would have wished to leave her estate. To rub salt into the wound – Joe’s family got nothing.

Second will
Commonly people in there 40s revisit their wills because by this stage that have acquired some property (although often heavily mortgaged) and have the responsibility for a family and/or a business.

Third will
Again, people in their late 50s or early 60s revisit their wills because by this time they have paid off some of their debt, have some investments and are beginning to think ahead towards support of their adult children and their own retirement. This is sometimes accompanied (or instigated) by their first health scare, a mild stroke or heart attack being a wake-up call.

Fourth will
People in their 70s and 80s often revisit their wills because by this time they are more focused on their own mortality and want to ensure that they have their house in order. 

Other times:

Everyone should at least reflect on whether their current will is still appropriate when any of the following events occur:

  • a birth or marriage: of a beneficiary or executor
  • a death: of a beneficiary or executor
  • divorce: their own or a beneficiary
  • the acquisition or disposal of an asset
  • insolvency: their own or a beneficiary
  • a change to superannuation or taxation laws
  • otherwise: once every five years

Often a will won’t require change when one of these events occurs, but it’s critical you at least consider the need so that you don’t miss a critical event that does require a change.

A few tips to keep in mind:

  1. Marriage annuls an existing will. Marry or remarry and you have no will UNLESS your will expressly states it was drawn up in contemplation of marriage.
  2. Separation does not change a will. So if you die in that time between separation and divorce (a minimum of 12 months) your existing will continues to operate and is likely to leave everything to your ex.
  3. Having no will creates uncertainty and will without failure cause delay and additional unnecessary expense in the administration of your estate.
  4. Having an out-of-date will can create just as many delays, costs and family disharmony as having no will at all.

Wills are inexpensive.  Don’t let your legacy be the mess you left behind.

The information in this article should be considered general in nature and legal advice should be sought. This information has been provided by Rod Cunich, author of Understanding wills and estate planning.  Rod can be contacted via his site Rodcunichlawyer.com, where you can learn much more, and also buy a copy of his book.

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    COMMENTS

    To make a comment, please register or login

    27th Jul 2016
    10:51am
    It annoys the crap out of me that lawyers both promote wills, and make money out of them.

    An obvious conflict of interest.
    HarrysOpinion
    27th Jul 2016
    11:51am
    They love charging $400-$500 in blocks of 6 minutes on top of the ridiculous charges for photocopying, reading letters, emails and responding by phone or in writing.
    RodCunichLawyer.com
    27th Jul 2016
    5:44pm
    A specialist lawyer will give you an upfront, fixed fee quote for doing your will and other estate planning documents so you know what you are up for before you commit. If you can't be satisfied about the value, then you have not lost anything.
    Jannie
    28th Jul 2016
    5:57pm
    Blood suckers is the category I put all lawyers and solicitors
    Lochie
    27th Jul 2016
    11:14am
    I don't understand how a will can be "out of date". Could someone please explain if I'm missing something.
    HarrysOpinion
    27th Jul 2016
    12:02pm
    Lochie- only info I could find-
    "Ensuring wills are up to date
    -Education campaigns need to target current will makers about regular revisions to their will, regardless of how it was drawn up. Wills need to be presented as a dynamic rather than a static document that needs regular revision.
    - The Public Trustee could take a leadership role in developing succession planning, education and support for parents of a child with a cognitive disability.
    - Continuing education for private and public practitioners should address the needs of specialised groups in drawing up wills such as farmers and those with intergenerational businesses, those with international assets, parents with a child with a cognitive disability
    and blended/step families."
    RodCunichLawyer.com
    27th Jul 2016
    5:31pm
    A Will can become out of date because
    1 a change in your personal affairs such as;
    - your marriage or separation,
    - the death, marriage or birth of a beneficiary,
    - death or incapacity of your executor
    - a beneificary relocating overseas (tax consequences may flow)
    2 a change in financial circutances
    - bankruptcy, you or a beneficiary
    - a change to your super from accumulation phase to pension phase and how death benefits may or may not flow into your estate
    HarrysOpinion
    27th Jul 2016
    11:48am
    One thing I'd like to see is, that any written will should be seen first by all the family first before it is signed so that any disputes and written defamation can be resolved before going to very expensive mediation involving solicitors and barrister costing each party $25,000 (total $50,000). Once a testator dies, any written malicious ( vengeance) defamation he pins to the will as the reason for leaving someone out of the will or leaving them less of the estate can not be legally contested under the defamation / libel statute. To take the matter all the way to the Supreme Court will cost another $50, 000 or more.
    RodCunichLawyer.com
    27th Jul 2016
    5:35pm
    I agree totally with this comment. Many disputes arise out disappointment that occurs once the terms of a Will are known. A Willmaker can minimise disputes by taking beneficiaries through what they have done and why. Better to have the person who prepared the Will provide an explanation than leave a ticking time bomb behind.
    Understanding the consequences of what is put in a Will and understanding the strategies around how to minimise disputes is one reason why getting specialist advice is valuable.
    in2sunset
    27th Jul 2016
    6:01pm
    I am in the EXACT same position. Being one of 8 children, I chose to go ahead with my life, work, not bludge on welfare like most of my siblings, did without new cars, trips, luxuries, etc and having always been single, finally paid off my house. Part of that choosing to live my own life was to move interstate doing work I loved - not well paid, but I was happy. So what happens when my parents passed away? - I'm left nothing because my siblings 'need it more' and I 'showed little affection for my parents by moving interstate'. Yet my parents have continued to hand out money hand over fist to my siblings because they 'were struggling'. Of course they were - they knew they could get a handout! But me? - nah - I worked for my living, I don't get a cent. And more than that, how I was described in the will was insulting, hurtful and upsetting. And yes, it would cost ME a fortune to contest it. That's wrong. I didn't realise a will was based on who 'needs' it the most. I thought it was based on 'fairness & equableness'. I know how I'll be writing MY will.
    SKRAPI
    27th Jul 2016
    12:00pm
    Yes never 2 soon & make yours ENDURING POWER OF ATTORNEY.. Also a good idea to have an ENDURING GUARDIANSHIP . 1-3 in case U R struck down with a stroke / accident or just lose your Marbles . It's comforting to know who would have say over your health care. Otherwise The Guardianship Board { Gov. } takes Control & usually takes Control of your Assets too / your house & whatever . Often leaving Zilch .
    RodCunichLawyer.com
    27th Jul 2016
    5:36pm
    More sound advice - spot on Skrapi
    Old Man
    27th Jul 2016
    12:28pm
    I used to work in finance and I have seen some terrible things happen with estates where there was either no will or a badly written will. Those who want to save money by completing a will form bought from a newsagent could be creating a legal minefield. I have great faith in the legal profession when it comes to drawing up documents and I believe the relatively minor cost to draw up a will is well worth the effort.

    I recall a will where a sibling was left "1% of the balance of my cheque account" and I asked the solicitor who drew it up why as the deceased ran an overdraft account. The solicitor advised me that it was prudent to mention all family in a will which could reduce claims to a court because they had been forgotten.

    I don't recall how much our solicitor charged us to make out our wills but they are written in such a way that all future eventualities appear to be covered. Our solicitor also drew up an Enduring Power of Attorney at a later time and there was no charge for this document. We have peace of mind.
    RodCunichLawyer.com
    27th Jul 2016
    5:42pm
    Solictors and trustee companies have in the past devalued the importance having a Will properly prepared. How? By giving them away of selling them cheaply as a loss lead to get probate matters.

    It's little wonder many people don't believe they should pay much for a Will as they are 'simple documents'.

    Don't be fooled. The old cliche applies: you get what you pay for.

    Cheap may be OK, but it's those you leave behind who find out whether cheap was adequate.

    Do you want to lob a hand grenade amongst your family from your grave as your legacy?
    jayzaa
    27th Jul 2016
    6:39pm
    When a property is in joint names, does it automatically go to the other person, and secondly does the govt take any fees
    Jonnie
    27th Jul 2016
    9:20pm
    I have recently redone my will and also added a Power of Attorney and an Enduring Guardianship for $330.00.... so I guess it depends where you go for legal advise as regards to the price.
    Anonymous
    27th Jul 2016
    9:22pm
    What if that's $330 I don't really have?
    MICK
    27th Jul 2016
    9:33pm
    Considering that a day in court costs around $5,000 I might think that $330 was not expensive. I just wish that litigation was as affordable.
    Anonymous
    27th Jul 2016
    9:35pm
    People like you, who obviously have a bit of spare cash available at any time, make me sick.
    MICK
    27th Jul 2016
    9:26pm
    Ron: Good summary.
    Maybe come back with a follow up article on TRUSTS to protect children from bad partners. Bad partners seems to be a growth industry these days and there is not enough real information on how to protect the long term interests of one's children.
    Just like the deadbeat parents in your story above who gained when they should not have, so too will bad partners share in the profits of a lifetime of work should the inevitable happen.
    biddi
    28th Jul 2016
    3:11pm
    Note : We were given to understand from someone in the know,
    not to have a "Mr & Mrs" together as executors.
    Jannie
    28th Jul 2016
    5:53pm
    Where to do I get a will kit that is legal as I do not want to use a solicitor they are money hungry and have had bad experience.
    Anonymous
    28th Jul 2016
    6:54pm
    I am right with you there Jannie
    biddi
    30th Jul 2016
    12:10am
    The Citizens'Advice Bureau do 'reasonable' Wills.
    Jannie
    28th Jul 2016
    5:54pm
    Where do I get a will kit that is legal??
    vinradio
    3rd Jun 2017
    9:02pm
    In SA the Public Trustee will do a properly drawn up will for nothing, not sure about other states. They may take a very small percentage of the estate as payment but not much.
    vinradio
    3rd Jun 2017
    9:02pm
    In SA the Public Trustee will do a properly drawn up will for nothing, not sure about other states. They may take a very small percentage of the estate as payment but not much.


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