5 common myths surrounding estate planning
13 Dec 2017
- Wills & Estates
There are many misconceptions surrounding wills and estate planning. Gillian Hunter, Lawyer with Snedden Hall & Gallop Lawyers, dispels 5 of the most common myths that you may have come across.
1. Wills are documents that will only become relevant when you are an elderly person
Young people die.
Unless you’re a vampire (immortal) or under 18, you should have a will.
2. Wills are documents that are reserved for the wealthy
Estate planning is not just for the Gina Rinehart’s amongst us.
- It is important to have control over how your estate is distributed in the event of your death.
- It does not matter if the value of the estate is $30,000 or $30 million.
- Naming an executor can save your family a lot of unnecessary hardship and expense, regardless of the size of the asset pool.
- There may be items of sentimental value that you would want to go to a particular person.
Wills can also have other purposes beyond asset dispersal, for example, you can leave instructions about who you would want to act as the guardian of your children in the event of the death of both parents. You can also state your preference as to burial or cremation and/or express your wishes as to funeral arrangements.
3. If you die without a will, your family will know what you wanted and can distribute your estate accordingly
If a person dies without a valid will, they are said to have died ‘intestate’. In the event of intestacy, the estate of a person who died in the Australian Capital Territory is distributed in accordance with the intestacy provisions of the Administration and Probate Act 1929 (“the Act”).
The Act stipulates how the estate is to be distributed and the manner of distribution in accordance with a hierarchy of prescribed ‘entitled’ persons. The intestacy provisions identify certain relatives as the main beneficiaries and assume they are the people who the deceased would have wanted to provide for upon passing.
The intestacy provisions may uphold testamentary intentions in the case of a nuclear family. However, the reality is that not all of us do have perfect families, especially in an age of increasing separations and the rise of the ‘blended family’. Intestacy often results in family members who have little or no relationship with you or spouses who you have separated from receiving a share of your estate.
4. You can save some money and write your own will
While it’s not a legal requirement to have your Will prepared by a lawyer, we strongly recommend that you do. Certain terms used in the will can have legal connotations attached to them that may not be understood by the layperson. It is extremely important to correctly word your will because a poorly worded will could mean your estate may not be distributed exactly according to your wishes. This can put unnecessary pressure on the family and may lead to unpleasantness, serious dispute or even litigation.
One of the areas that an experienced lawyer can anticipate concerns beneficiaries. For instance, an eligible person who has not been provided for in your will (or who alleges they have not adequately been provided for) may be eligible to commence Family Provision proceedings in court, claiming a share of your estate. While the outcome of a family provision claim is ultimately a question for the Court, an experienced lawyer can advise you as to how to reduce the likelihood of any such claim being successful.
5. Once you prepare a will you will only need to update it if your intentions change
You should review your will with the assistance of a lawyer every three to five years, or whenever a major event occurs in your family, to your assets or to the taxation laws to ensure that your testamentary wishes will still be upheld in accordance with your intention.
If you marry, your marriage revokes your will entirely, unless it is expressed to be made in contemplation of that marriage. Similarly, entering into a domestic partnership or personal relationship can affect the terms of your will, as can divorce.
In particular, consult Snedden Hall & Gallop Lawyers if:
- You change your name or anybody named in the will changes theirs;
- An executor dies or becomes unwilling to act as an executor or becomes unsuitable due to age, ill-health or for any other reason;
- A beneficiary (someone who has been left something in the will) dies;
- You have specifically left any property that you subsequently sell or dispose of, or place in a trust or partnership, or that changes its form, character or name (ie particularly to specifically bequeathed shares in a company that restructures its capital);
- Your relationship status changes or if you experience matrimonial difficulties; or
- A child of yours is born (or dies), or you adopt or foster a child, (or if you adopt a child out).
The above list is not exhaustive and is intended as a guide only. The law is complex and it is not uniform throughout Australia. We strongly suggest that you obtain tailored advice regarding your individual circumstances.
Snedden Hall & Gallop Lawyers can assist you
The Wills & Estate planning team have expertise in preparing both simple and complex Wills. We can work with you to ensure that your wishes are communicated and documented. At Snedden Hall & Gallop, we have vast experience in ensuring that our clients are supported in the creation of their important personal documents. In addition, we have a strong litigation team who can assist you if a will is challenged.