Why make a will?
A will is a legal document which sets out how you want your assets to be distributed on your death. It gives you the opportunity to provide for your family and friends after you die. If you do not leave a will, your estate will be distributed according to a formula set out in legislation. In some circumstances, the result of dying without a will can be disastrous for your family or loved ones. Having a lawyer prepare your will ensures your assets will be distributed according to your wishes.
Who can make a will?
Any person over the age of 18 who has the mental capacity to understand what they are doing can make a will. In limited circumstances, the court can approve a will made by a minor. People who are mentally incapable of creating a will can have specific wills made for them which are then approved by the court.
What if there is no will?
When there is no will or no valid will, you are said to die “intestate”. The Administration and Probate Act 1958 (Vic) sets out a formula (rules of intestacy) for how your estate will be distributed and to whom.
If you die leaving a partner and children
- Your partner will receive the first $100,000, the personal.
- Chattels and one-third of the balance of your estate.
- Your children receive the remaining two-thirds shared equally among them.
- Your partner has the option of buying your interest in the shared home.
If you die leaving a spouse and a partner
- Your estate will be shared by your spouse and your partner in the proportions set out in the legislation. For example, if you have lived with your partner for between 4 and 5 years, your spouse and your partner will share your estate equally.
If you do not have a partner or children
- Your estate will pass to your parents if alive.
- If there are no living parents then it will pass to your brothers and sisters.
- If there are no brothers and sisters then it will pass to your nieces and nephews.
- If no relatives can be found after extensive searching, the government will inherit your estate.
The legislation recognises partner to be a spouse, or a de facto partner irrespective of gender (a domestic partner), with whom you have been living for at least two years or for a lesser time where there is a child of the relationship.
Disadvantages of not having a will
- You have no control over the distribution of your estate.
- The rules of intestacy as set out above may not accord with your wishes.
- There may be a forced sale of the family home or car to cover other beneficiaries’ share of the estate.
- No guardian has been appointed for your children.
- Your children or grandchildren may not receive the financial protection you would have desired.
- Partners, stepchildren, friends and favourite charities may miss out.
- Incapacitated members of your family and their own assets may be put at risk.
- Your estate may be administered by someone you would not appoint.
Why should I revise my will?
A will should reflect your current domestic and financial situation. As circumstances in life change, so should your will. Revise your will at least every five years or when a significant event such as marriage, the birth of a child, or the death of a family member takes place.
Even if you haven’t changed your will, certain events such as marriage and divorce may still affect it. Generally speaking:
- A will made prior to a marriage is not valid.
- Separation (but not divorce) from a spouse does not affect the will.
- Any gifts to your spouse or their appointment as executor are automatically revoked on divorce.
- It may also be necessary to appoint a guardian for your children after their birth or to review your appointed executor.
What is a Testamentary Trust?
A testamentary trust can be established under a will. It appoints a trustee or trustee company, who may also be the executor of the will, to use property of the estate in a way specified in the will, for the benefit of the beneficiary.