A will is a legal document that specifies how a person’s assets will be distributed after their death. It is perhaps the most critical document in an estate plan, and usually sets out things such as:
Who will manage and oversee the distribution of your estate (this person is known as the executor);
What powers the executor will have;
Who will inherit everything that you own (the beneficiaries of your estate); and
Who will be the guardian of your children.
It’s important that a will is properly prepared, having regard to your assets, liabilities, and the circumstances of your family.
There are various names given to the different types of wills that can be prepared by a lawyer. The most common type of will that is prepared is known as a ‘simple will’. Other types of wills include wills with testamentary discretionary trusts, wills with special disability trusts, mutual wills, and contractual wills.
How to make a will in Australia
In order to be binding, a will prepared in New South Wales needs to meet the following criteria:
While these are the basic requirements, there are also many complexities to consider. This can be things such as what to do with international assets, what assets can actually be gifted in a will, what the tax implications of those gifts may be, and whether to establish trusts.
What is a simple will?
A simple will is the most commonly used will. It is a will that does not contain any trusts, and simply provides any gifts directly to the beneficiaries named.
What is a will with a testamentary discretionary trusts?
A will with a testamentary discretionary trust establishes a discretionary trust on the death of the testator, for the benefit of one or more beneficiaries. This means that instead of gifts going directly to a beneficiary (like in the case of a simple will), gifts can instead go into a trust for the benefit of certain beneficiaries. Often these wills will give discretion to distribute assets among different family members.
There are many reasons people may wish to establish a will with a testamentary discretionary trust, however it is most commonly done for tax reasons or to assist with asset protection.
Death with a will – what happens when you die and have left a will?
Your last will and testament will appoint one or more people to act as the executor of your estate. An executor is the person responsible for obtaining a grant of probate and administering the estate.
The duties of an executor may include:
Writing to account holders and informing them of your death
Preparing an inventory of assets and liabilities
Applying to the court for a grant of probate
Selling assets of the estate to cover the expenses of the estate or to make payments to beneficiaries
Arranging for the payment of any debts of the estate
Arranging for the preparation of final tax returns for the estate
Distributing assets to beneficiaries
Death without a will – what happens if you die without a will?
When someone dies without a will it is known as dying ‘intestate’. When you die intestate, your estate will be distributed in accordance with the laws of the state you live in. In New South Wales, the Succession Act 2006 (NSW) determines what will happen to your estate upon death by way of a prescribed formula.
In order for somebody to administer your estate when you have not prepared a will, they will need to apply to a court for a grant of letters of administration. Once the grant is received, the person appointed will have to arrange most of the same tasks as the executor under a grant of probate.
By not having a will, you lose control over what will happen to your estate. This exposes you to numerous risks which may include:
Certain family members may not inherit anything from your estate;
Your estate may end up being managed by someone who you do not want involved in your affairs;
Your children may end up with somebody you would not have chosen; and
Your estate may run in to complex and costly tax issues.
Failure to write a will can result in spouses, children, or other family members being left with no inheritance, which can result in people making claims against your estate, a process that can have considerable financial and emotional consequences on your family.
If you own a business or are a partner in a business, a failure to have a will and estate plan can cause your business to fall apart if you haven’t properly considered who will inherit your shares in the business, who will have control of the running of the business, and whether the business can continue to run at all. If you have a business it is important to also consider the timeframes associated with getting a grant of probate or letters of administration.
What is the cost of a will and testament?
The cost will depend on the complexity of your estate and the documents that you require. For example, a simple will is likely to cost far less than a more complicated will with a testamentary discretionary trust.
Similarly, a simple estate which may only have a home and a few personal assets will be far easier to plan than an estate which includes complex corporate or trust structures and business assets.
At Thornton + King our estate planning lawyers have decades of experience preparing wills and estate plans for both simple and complex estates. Call us today for a fixed price quote.
Amending a will – can you write a codicil?
If you already have a will but want to make an amendment to it, it is possible to do so by writing a codicil. A codicil is an amendment to a will.
There are many risks associated with preparing a codicil, and in many cases it is not only best practice, but also more efficient and cost effective to prepare a new will rather than a codicil.
Death duties – how much is inheritance tax in Australia?
Australia is fortunate in that there is no death or inheritance tax applicable to deceased estates.
How to make a will in NSW
At Thornton + King we have a team of specialist estate planning lawyers who can assist you in preparing a detailed and personalised will and estate plan. Our firm has a history of preparing wills and estate plans which dates back to 1924, which means there isn’t much that we haven’t seen or done before.
We are able to take instructions via video calls, and also have several convenient offices around New South Wales in case you prefer to see a lawyer to prepare a will near you.
To speak with one of our estate planning experts, give us a call or submit an enquiry now.
