Do you need a “Will”?

Well, in my humble opinion, YES!!

My role is to assist people purchase or refinance, what could very well be their single biggest asset. At the time of a purchase you must advise if the Title is to beheld in “Joint Tenancy” or as “Tenants in Common”. This dictates what happens to the Title and everything on that parcel of land when a tenant passes away. The question then is what happens to that asset when a client dies?

So, whilst that is not part of my role nor expertise, I do believe I should at least make some mention of it. And I mention this because of what I am currently and have been involved with for the past few years. Boring, but please read on.

But first, regardless of your intentions, if you die without a valid Will the rules of “intestacy” would apply, which is essentially the Government making a list of people who would receive assets from your estate. This list may not match who you want your assets to go to and can produce some unintended outcomes.

The two items not included is your superannuation and real estate.

With superannuation, unless you have a binding nomination (read a named beneficiary attached to the policy) the Trustees of the Super Fund decide who or whom is to receive your super. Again, could be against your wishes.

With real estate, as mentioned above the title can be held as “Joint Tenants” or as “Tenants in Common”. Joint Tenants depicts that if one tenant dies the property will be transferred to the surviving partner. Tenants in Common will list the percentage owned by each tenant. If a tenant dies, their percentage or holding of that property forms part of their Estate and is handled as part of the distribution of their estate.

One of the most important parts of creating a Will is to appoint an executor to administer your estate. Again, if you die without a Will then someone will need to apply to the court to be appointed as your administrator, adding another process, complication and cost.

If you have more than $20,000- in bank accounts your bank will definitely not release any funds on your death without being satisfied as to the legal appointment of your personal representative and, even if you have a Will, they may still require probate. This takes time, so who will have the cash to pay for your funeral.

My wife and I have just re written our Wills and Power of Attorney. Giving us peace of mind that if something did happen the Executor of our estate knows what goes to whom. We also know it is valid.

I have known of this following example for a few years. A couple with 5 children. 3 under 16 and the youngest 5. The wife dies of cancer. The surviving husband writes his Will with his entire Estate to be held in Trust until the youngest turns 18. Three years later he is diagnosed with terminal cancer. The youngest is now 8. He rewrites his Will as having his Estate in trust is no longer beneficial to his surviving children. A few days before his passing, it is discovered that the new Will is invalid. He died before a new Will could be written and the earlier Will is implemented. The two eldest children, in their late 20’s, are now supporting their siblings for the next 7 years.

A mother in her 80’s and son in his 60’s re wrote their Wills and agreed to have the same executor. They also bequeathed a portion of their respective estates to his grandson and to be held in trust until he reached 21. The son died suddenly and the mother shortly after. As per the instructions in both of the Will’s, the executor is now managing the two trusts for the next decade.

Please seek legal advice and have a discussion with the executor of your Will as to your intent and wishes.

I also recommend, while you are looking at your estate planning, that you consider doing an enduring Power of Attorney – to appoint a trusted person or people to make decisions on your behalf regarding financial and personal/health matters if you were to become incapacitated.

This information has been prepared by PHA Financial Services and does not take into account your objectives, financial situation or needs. Before acting on this information you should consider whether it is appropriate to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. The information provided was accurate at the time of publication and changes in circumstances after a document is published may impact on the accuracy of information. Some information may have been collated from various third parties and we make no assertion that the information was originally ours.