Download the FREE SBS Radio App for a better listening experience
Nearly half of Australian adults don’t have a will. This means that the jurisdiction of your state or territory may have the ultimate say on who is to receive your assets.
Less than half of the over 50s have a detailed plan for what to leave their children and one-in-ten having no plan at all according to a recent Australian report on inheritance insights.
Whether you believe it’s bad luck, simply procrastinating, or don’t think you’ll have anything left to give away, South Australian lawyer Dino Di Rosa argues that every adult should have a legally-binding will to avoid complications down the track.
“If you die without a will, you’re said to die intestate, which means that the state, according to where you have your assets and where you die, dictate what happens to your assets"
“If you die without a will, you’re said to die intestate, which means that the state, according to where you have your assets and where you die, dictate what happens to your assets. For example, if in South Australia, and in New South Wales and Victoria and other states, if you die and don’t have a will, the bulk of the estate goes to your spouse, if you have one, and a significant portion of your estate goes to your children if you have them, so all sorts of problems could arise if your children, for example, are under 18.”
New South Wales lawyer Robert Monahan, an accredited specialist in wills and estate law at HLB Mann Judd believes that the will is one of the most important documents you’ll ever sign and thus shouldn’t be taken lightly.
“The reason for that is that it’s the one document that you sign that gives away all assets that you own so it should be taken seriously when you decide to prepare a will and then obviously get the proper advice.”
The document needs to be signed by the will maker in the presence of two adult witnesses who are not beneficiaries.
Di Rosa outlines the basic questions you should answer in preparing your will.
“Who should be my executor? Who should carry out the wishes in my will and the other key question what is to happen to my assets after I die? Who should be my beneficiaries?"
“Who should be my executor? Who should carry out the wishes in my will and the other key question what is to happen to my assets after I die? Who should be my beneficiaries? Now, normally you’d appoint family members who are capable to be your executor and obviously family members to be your beneficiaries.”
Monahan recommends covering all the ‘what if’ scenarios to ensure that your will is carried out according to your wish by a suitable executor.
If you’re planning to have more than one executor, he advises making sure that they’re able to get along with each other and be able to work together.
"If, for instance, someone wants to appoint a particular person as their executor, what if that person doesn’t want the job? Or what if that person dies before you? Who then is to be the executor? Similarly, if you are leaving everything to your children, what happens if one of them dies before you? Is that gift to go to their children, or is it to go to their partner or is it to go to somebody else?”
It’s worth knowing that some of your wealth may not be covered by your will.
"If people have a family trust, then the assets of the trust are not their assets so the will does not cover those type of assets".
"For example, superannuation doesn’t necessarily form an asset of your estate; it depends on whether the trustee of the superannuation fund pays the death benefit to your estate. If so, it’s covered by the will, but if not, it may be paid directly to a dependent and in that case, it’s not dealt with by the will. Similarly, if people have a family trust, then the assets of the trust are not their assets so the will does not cover those type of assets", according to Robert Monahan.
You may think that scribbling your final wishes on a piece of paper or completing a DIY will kit is enough, but incomplete or poorly constructed wills can end up in bitter legal disputes.
“In recent years, there’s been cases which have come before the courts where people have done their will on their iPhone or their laptop, and whilst ultimately those wills are being upheld, it’s come at a great cost to the estate as opposed to having it done property in the first place.”
You only need one will if you own assets in different parts of Australia.
However, if you have dual citizenship, or have assets abroad, be aware that your wishes may not necessarily be granted depending on the jurisdiction of the country.
Monahan advises getting sound legal advice in that particular country.
"Whilst there is no death duty in Australia, some countries do levy a death duty or an inheritance tax on the assets of the estate and some countries will actually tax the worldwide asset."
"Whilst there is no death duty in Australia, some countries do levy a death duty or an inheritance tax on the assets of the estate and some countries will actually tax the worldwide asset. If they have assets, for instance, in the United Kingdom, it’s possible that they not only charge inheritance duty on the English assets but they may charge it also on the Australian assets. Same principal applies for American citizen”.
People with dual nationality or foreign assets need to also take forced heirship laws into consideration.
This law applies to Latin American countries as well as France, Italy, Spain, Greece, Portugal, Saudi Arabia, Russia, Switzerland, Germany, Austria, Indonesia, Singapore, Japan, and China.
“Forced heirship is when the law of a country says that certain people must get a particular share of your estate and those persons can include spouses, children and in some countries, even more remote family members.”
Divorce or a new relationship can also affect the terms of your will.
Di Rosa recommends reviewing your will every three to five years or whenever your circumstances change to keep your wishes current.
“If you have a death in the family or a child becomes adult and is involved in a threat of bankruptcy or their marriage is troubled.”
In an ideal world, your final wishes will be carried out according to plan without fuss, but that depends on the will being intact in the first place.
Di Rosa suggests storing it in a credible wills register or with your lawyer.
“If you keep your will in your house, for example, it may be destroyed, it may be marked in a way that compromises the application for probate and makes things a lot more difficult so I will definitely advocate keeping your will with the lawyer or at the very least keeping it in a safe deposit box with your bank.”