“A Will is one of the best gifts you can leave your loved ones in the event of your death.” – Gladys Wong and Simon Trevethick
Statistics show that on average half of all Australians die without a Will in place. This is an alarming number and a study conducted by Owen Hodge Lawyers on the reasons why Australians do not have a Will in place showed the top three reasons were:
- They hadn’t gotten around to it yet;
- Did not think it was necessary until they were older; and
- Did not think they had enough assets to make it worthwhile.
There seems to be an overwhelming assumption by Australians that making a Will is a task for the elderly or the ‘well-off’ members of society who have multiple assets to protect.
This article intends to squash those assumptions and outline the importance for all Australians to ensure they have a proper Will in place no matter their age or the size of their estate.
You spend the majority of your life either consciously or unconsciously establishing your life estate. But what exactly is your ‘estate’?
A person’s estate comprises everything that person owns or controls, this includes:
Financial accounts such as:
- Bank accounts
Physical possessions such as:
- Household items
Other parts of a person’s estate that aren’t always thought of, but are included, are all business interests and debts owing to others; these items are only applicable when they are in the sole name of the person though.
We all have an estate, as little or big as it may be, so it is important to make sure our estate is appropriately dealt with and those closest to us are properly looked after.
What does a Will actually do?
A Will does not come into effect until you have passed away. Under your Will, you will appoint a person (or persons) to be your Executor. An Executor is the person responsible for administering and distributing your estate to your Beneficiaries. Your Beneficiaries are the people you choose to leave your estate to, most commonly this is your immediate family.
Your Will does not only need to cover how and who you wish to leave your estate to; other elements that are often included in Wills are:
- Organ donation – your position on donating your organs;
- Funeral arrangements – what funeral service provider you prefer, the type of service you would like to have (private or public), whether you wish to be buried or cremated and where you would like to be buried or have your ashes deposited/scattered;
- Guardianship of minor children – who you wish to have guardianship of your minor children;
- Ownership of any living pets – who you wish to look after your household pets; and
- Specific gifts – items of your personal possession that you wish to gift to certain people.
As you can see from the above, there is a lot more to consider than simply who you wish to leave your ‘stuff’ to.
Passing away without a Will
When a person passes away without a Will in place, it is considered that person has died ‘intestate’.
Intestacy rules are in place to determine how a person’s estate is distributed in these circumstances. In Queensland, the people first entitled to share your estate when you die intestate are your Next of Kin. Your Next of Kin include your spouse (including de facto partner) and any children or grandchildren.
Should you not have any Next of Kin, your estate is then directed toward your parents, siblings, nephews and nieces, grandparents, aunts and uncles and then first cousins, in that order.
No other relatives past your first cousins are entitled to a share of your estate when you die intestate. This means no step-children, step-parents or in-laws have an entitlement. This is important to understand when considering who you wish to be entitled to receive a benefit from your estate.
Issues with intestacy rules
As previously mentioned in this article, we spend the majority of our life establishing our life estate and therefore we want to ensure those closest to us receive benefits from it when we pass. When you pass away intestate though, any wishes you may have had for your estate are not taken into consideration.
The key issues with the rules of intestacy are:
- You cannot ultimately control who gets what with respect to your estate – for example, should you have a very close relationship with a step-child, when you pass they will not be considered to receive a benefit from your estate;
- Estranged relationships with a Next of Kin are not taken into consideration – for example, if you have an estranged relationship with one of your Next of Kin, under the rules of intestacy they will still be entitled to receive a benefit from your estate; and
- The administering process of an estate when someone dies intestate takes a very long time in comparison to administering a Will – this can become a very lengthy and painful experience for your beneficiaries.
No matter how big or small your estate is, or whatever age you may currently be, we simply cannot predict the pathway our life may take and we all have something that will be left behind to our loved ones.
Relying on the rules of intestacy may mean those closest to you are not looked after adequately or how you would wish; having a Will in place is the only way to appropriately protect your estate and ensure your wishes are granted.
I hope this article has provided you with some insight on the importance of Wills and your estate planning, should you want to find out further information please contact our office and we will be more than happy to assist you.
Authored by Tessa Calver-James – Lawyer at MBA Lawyers.