Jun

27

Making a Will

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What will happen to your assets if you die without a Will?  Don’t leave it to your family to pick up the pieces.   Visit us @ Ferguson Cannon or call us on 1800 640 509 or email b.cannon@fclawyers.com.au  

What is a Will? Beneficiaries with disabilities
Why do I need a Will? Spendthrift beneficiaries
Can I make a Will myself? Gifts in my Will
What constitutes a valid Will? Should I appoint Guardians?
What is an Executor of a Will? What happens to my companies and trusts?
Who should I appoint as my executor? Companies
Duties and Responsibilities of an Executor Trusts
What are beneficiaries? Testamentary Capacity
Can I leave gifts to people outside my family? Executing a Will
What age can my children benefit from my estate? What Happens after I’ve signed the Will?
Does a beneficiary have to survive the deceased by 30 days? Reviewing my Will
Protecting beneficiaries – Testamentary Trusts What assets becomes part of a Deceased Estate

What is a Will?

A Will is a legal document containing instructions and wishes as to how your property and assets are to be distributed after your death, and who is to benefit from your estate

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Why do I need a Will?

If you don’t have a valid legal Will, a Court will decide who gets your assets. The decision of the Court may not be consistent with your wishes. It is therefore important that you have a valid legally enforceable Will.

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Can I make a Will myself?

There is no legal requirement that a Solicitor must draft your Will however it is not in your best interests to draft your Will yourself. There are strict guidelines for making and executing a Will and if these guidelines are not adhered to then a Will may be deemed invalid by a Court. A Will is one of the most important legal documents you will ever make so it is important to do it with professional advice.

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What constitutes a valid Will?

To be valid your Will must be:

• In writing: either printed, typed or handwritten;

• Signed: on every page;

• Witnessed: two witnesses must be present when you sign your Will.

Your Will may not be enforceable if it does not comply with strict legal requirements. It is important to seek legal advice when making your Will.

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What is an Executor of a Will?

If a deceased person has left a Will an executor will be appointed to be the deceased’s personal representative in administering the deceased’s estate.

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Who should I appoint as my executor?

When making a Will choosing the right executor is an important decision. It is possible to appoint more than one executor of your Will however one or two is usually sufficient. Your chosen executor/s should be aware of their legal responsibilities and have some understanding of accounting matters. It is possible to appoint your Solicitor to be the executor of your Will. In this case the Solicitor may charge for services performed in the administration of your Estate.

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Duties and Responsibilities of an Executor

Traditionally the executor’s duties are summarised as follows:

  1. to reduce the estate of the deceased into possession. This means the executor must arrange for the assets of the deceased to come into the control of the executor.
  2. to pay the debts of the deceased
  3. to distribute the residue of the estate after payment of all expenses, to those who are entitled as beneficiaries under the Will
  4. to ensure that all of the assets are properly secured and insured. Insurance companies and other institutions should be advised of the passing of the deceased. It would be wise for an executor to obtain a valuation of assets
  5. to ascertain if the deceased had any life insurance policies
  6. to ascertain if the deceased had any interest in businesses, and appoint management to those businesses.
  7. to organise the taxation affairs of the deceased and the deceased’s estate. The executor should seek accounting advice.
  8. to keep records – the executor should keep very detailed records of all dealings with the estate.
  9. to the distribution of the estate – the executor should contact all beneficiaries to advise of there interests in the Will.

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What are beneficiaries?

Beneficiaries are persons or organisations that you have selected in your Will to receive part or all of your assets in the event of your death.

You can include anyone that you like, and more than one person or organisation can share in your estate. Examples of beneficiaries include:

  • Spouses and partners
  • Children
  • Parents and brothers/sisters
  • other relatives (eg cousins, uncles, aunts)
  • Charities

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Can I leave gifts to people outside my family?

There is no restriction as to who you can leave your estate to. It is however important to be aware that if you leave assets in your estate to people who are not your dependants, spouse or children (including step-children) then your dependants, spouse or children may be able to make a claim against your estate after you have passed away. It is therefore very important to speak with your solicitor about the consequences of leaving any part of your estate to beneficiaries who are not dependants, spouses or children as certain steps will need to be followed to ensure your wishes are carried out.

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What age can my children benefit from my estate?

The minimum legal age that a beneficiary can obtain access to an estate, unless otherwise provided for in the Will is 18. Benefits would not be transferred to beneficiaries until that beneficiary reached the age of 18 years, or older if specified in the Will. Some Will makers direct that children do not obtain the benefit of an estate until a later age such as 21 or 25. Most Wills should allow for beneficiaries to apply to an executor to obtain an advance against their entitlement under an estate to allow for matters such as education, maintenance and their general advancement.

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Does a beneficiary have to survive the deceased by 30 days?

The Succession Act automatically deems a beneficiary to have pre-deceased a will maker if the beneficiary does not survive the will maker for a period of 30 days. This means that a person will not have an entitlement to an estate unless they survive the deceased person by at least 30 days.

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Protecting beneficiaries – Testamentary Trusts

  1. Often a will maker is concerned to ensure that their beneficiaries are protected and that inheritances are not wasted or lost. Circumstances may arise where a beneficiary needs protection. These circumstances could include:
  2. The bankruptcy of a beneficiary
  3. The divorce of a beneficiary
  4. A beneficiary with a disability
  5. A beneficiary who is spendthrift
  6. A beneficiary who is in a high risk occupation who needs asset protection

A Testamentary Trust can be established under the terms of a Will. The Testamentary Trust has considerable benefits in that the beneficiary will be able to control the assets (if allowed for in the trust) however the assets in the inheritance do not form part of that beneficiary’s estate. This could mean that the bankrupts inheritance may be protected against creditors.

It is very important that you speak with your solicitor before a Testamentary Trust is established under a Will. A Testamentary Trust is a complex document requiring extensive legal knowledge and a thorough understanding of how Testamentary Trusts can be applied in certain circumstances.

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Beneficiaries with disabilities

A will maker who has a child or a dependant with a disability may be reluctant to have the benefit of their estate flow directly to the beneficiary, without adequate protection being put in place to assist the disabled beneficiary deal with the inheritance.

A Testamentary Trust can be established under the terms of a Will for the benefit of the disabled beneficiary. For example an executor may be the trustee of a Testamentary Trust and the will maker can ensure that adequate funds are provided for the beneficiary but at the same time protect those funds by keeping them out of the beneficiaries control. The executor / trustee will be required to invest funds on behalf of the disabled beneficiary and then ensure that adequate provision is made for the disabled beneficiary so that they can benefit from the estate in the long term, whilst also receiving adequate funds for care and maintenance.

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Spendthrift beneficiaries

Often will makers wish to protect beneficiaries where there is a concern the beneficiary may spend the inheritance unwisely to their own detriment.

A Testamentary Trust can be established under the terms of a Will to ensure that adequate funds are provided for a beneficiary but at the same time protect those funds by keeping them out of the beneficiary’s control.

In this situation a spendthrift beneficiary would have the benefit of receiving income from monies invested on their behalf but would not have the power to spend all of the money. The will makers executor can control the funds and communicate with the spendthrift to ensure that funds are invested wisely and for the benefit of the spendthrift beneficiary.

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Gifts in my Will

In your Will you are able to leave certain identifiable gifts to your beneficiaries. Gifts can include household furniture, jewellery, shares, land, tools, cash and sporting equipment.

It is important when specifying particular gifts that the gifts are accurately described. It is also important to accurately describe who is to receive each particular gift. This will avoid the risk of any dispute after you’ve passed away as to who gets each particular gift.

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Should I appoint Guardians?

A guardian is a person who has responsibility for the long term welfare of a child until they reach 18, and has all the powers, rights and duties that usually belong to the child’s natural parents.

Your Will allows you to make arrangements for the care of any children that you have who are under 18 years of age when you die. This is done by selecting one or more Guardians and nominating them in your Will.

Anyone you choose can be appointed as guardian, regardless of whether they are related to you or your child. You can choose one or more persons to be the guardian of your child, although disputes can arise if you select more than one person.

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What happens to my companies and trusts?

A lot of people have their assets structured in such a way that they are owned by trusts or companies. It is very important to understand that trusts and companies will not die when the person who controls them dies.  Special provision therefore needs to be made in a persons Will to consider these structures.

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Companies

It is important that the power to control a company is passed in the Will (if possible) to the desired people. For example if the person making the Will wishes to ensure that their beneficiaries have ownership of a company then consideration needs to be made as to who will ultimately own and control the shares in that company after the person has passed away. Special provision may need to be made in the Will to ensure that the shares are left to specific people.

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Trusts

Most Trust Deeds will nominate a person who has the power to appoint or remove a new trustee. It is therefore important that appropriate provisions are made in the Will so that effective control of the trust passes to the person the will maker wishes it to.

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Testamentary Capacity

To ensure that a Will is validly made, confirmation is required that past or present medical conditions do not have any adverse impact on the willmaker’s ability to provide instructions in relation to the preparation of a Will.

It might be necessary to have a medical certificate from a doctor attached to the Will. It might also be necessary to have more than one medical certificate (one on the day of taking instructions and another on the day of signing the Will).

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Executing a Will

It is very important that your Will is executed correctly, as if it is not, your Will may be invalid.

A Will is to be executed by 2 witnesses over the age of 18 years. A witness must not be a person who is a beneficiary under your Will and must not be your spouse. A Will should be signed on every page. The Willmaker and witnesses should also use the same pen when signing.

To ensure that your Will is executed correctly, you should contact a Solicitor.

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What Happens after I’ve signed the Will?

After the Will is signed, a copy is made for you to take home, which should be kept in a safe place where both you, and the beneficiaries can find it. Usually, the original is held in safe custody with your solicitor, but may be taken with you for safe keeping.

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Reviewing my Will

It is very important that you review your Will and Estate Plan regularly. Proper planning for your estate will ensure that the people that mean the most to you are not disappointed upon your death, and that your wishes are carried out.

  1. There are many circumstances in your life that may trigger the need for a review of your Will such as:
  2. The purchase or sale of a significant asset
  3. The death of a family member or of people you have nominated as executors or beneficiaries in your Will;
  4. The birth of a child or grandchild;
  5. Marriage or divorce;
  6. An inheritance or significant change to your financial circumstances.

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What assets becomes part of a Deceased Estate

Assets owned individually by the deceased forms part of the estate. This can include:

• Shares;

• Assets that are held as tenants in common;

• Cash investments;

• Any debts held by the individual.

The Wills & Estates Team at  Ferguson Cannon specialise in ensuring that your assets are distributed according to your wishes. Call us today on (07) 5443 6600 and speak to Byron Cannon.

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Category: Administration of Estate, Business & Corporate Services, Conveyancing, Fact Finders, General, Wills & Estates

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