45 percent of Australians don't have a valid Will
A Will is one of the most important parts of your estate planning and allows you to distribute your wealth according to your wishes
Not having a Will could leave distribution decisions up to the Courts in your State or Territory
It can be a difficult process, it brings up conversations around death, funerals, and may even cause family disputes, but a Will is one of the most important documents you should have in place because it lets you decide how you wish for your personal effects to be divided.
You will be able to leave certain assets to people and also divide, or donate, your monetary assets between family and friends.
Additionally, if you don't have a legal Will, your State or Territory will determine how your estate will be distributed.
Why are legal Wills important?
Around 45 percent of Australians do not have a valid Will in place, which means their assets will not be distributed according to their wishes.
No matter if you have friends or family that know your wishes through conversations with you, it doesn't necessarily mean they will follow your directions or they will receive the rights to distribute your estate how you wish.
Your Will is a part of your estate planning, and an important addition to your estate plan.
It is also an opportunity to maintain control over your estate and all of its assets.
If you have a Will already, it's important to update it every five years or after an out of the ordinary event, like the loss of wealth or recent family changes.
The validity of your Will
Making your Will does require a little work to be valid.
For instance, your Will needs to be written - it can be handwritten, typed or printed - and must be signed by two witnesses, who are not beneficiaries of the Will, and signed by the person making the Will.
Testamentary capacity also comes into play when making a Will, which means you must have the ability to understand you are making the Will and the legal effect it holds, know the extent of your assets, who would benefit from your estate, and any mental illness or disease cannot have any effect on your ability to make decisions.
While you can use a do-it-yourself (DIY) Will Kit, there is always the danger of a Court deciding it is not legally valid.
If you do not have qualification or knowledge behind making a Will, you are more likely to make a mistake. This could result in an area not being covered or leaving things open for interpretation.
What if I don't have a Will?
If you don't have a valid Will or die without a Will, your State/Territory will believe you have died 'intestate', which means you have no beneficiaries of your estate or executors to administer your Will.
Your whole estate and assets would be distributed by the State/Territory. This usually is organised through a predetermined formula that differs from State to Territory.
If you wished to have certain assets or percentages of your wealth divided to certain people, these wishes may not be upheld.
In some cases, your closest known relative may be provided with executor rights to distribute your estate, or if there is no close next of kin, the State/Territory, may be required to bequeath the estate assets to the State/Territory.
Lastly, if you don't have a Will, this could leave a tremendous financial and emotional burden on family, and could even lead to in-fighting among family members. Having clear directions setting out how your estate and assets should be distributed can reduce the likelihood of this tension developing.
Will legalities between States and Territories
Each State and Territory has different rules on Wills, so it is important to do your research into making a Will depending on your location.
Australian Capital Territory
The administrator of the estate must receive a Grant of Probate from the Supreme Court of the ACT before receiving authority for access to the estate to collect monies, pay debts, lodge income tax returns, and other requirements of an administrator.
If there is no Will left, next of kin can request for administrator rights through the court. However, if there are no identifiable heirs found, as remote as cousins, the assets will be bequeathed to the ACT Government as unclaimed.
Similar to other States and Territories, a marriage or divorce will automatically revoke the Will. However, separation from a partner does not revoke a Will.
To contact the ACT Trustee and Guardian, head to their website.
New South Wales
In New South Wales, instate rule applies with your assets being distributed according to a predetermined formula. Certain family members will receive a defined percentage of assets.
If you die leaving behind a spouse and no child or grandchildren (issue), that spouse will receive the whole estate.
However, if there are children from another relationship other than the current spouse, the estate will be divided between the spouse and issue.
For more information, contact the NSW Trustee & Guardian through their website.
In the Northern Territory, the executor of the Will must apply for a Grant of Representation through the Supreme Court for permission to take control of the estate.
If there is no Will, the closest next of kin or relative can take the role as administrator of the estate, however, they need to apply to the Supreme Court to receive control of the estate.
In Queensland, the administrator of an estate needs to receive a Letters of Administration from the Supreme Court of Queensland to deal with a deceased estate, similar to the Grant of Probate for the executor of the will.
A de facto partner has the same rights as a spouse and needs to be a relationship in existence for at least two years.
Similar to the South Australian laws, your marriage Will automatically revoke your will unless marriage was contemplated previously in your will. Your Will is also revoked once a divorce becomes finalised.
If you die without a Will, it will fall under the ‘intestate’ ruling and your assets will be passed to the next of kin, either your spouse or de facto partner, or children and grandchildren. If there is no next of kin, it will be issued through your family, to your parents, brother and sisters, nephews and nieces, then grandparents, and then uncles, aunts and cousins.
Your estate will not be distributed to relatives past your first cousins, and in-laws or step-parents are not considered next of kin.
In South Australia, an executor of an estate will need to receive a Grant of Probate from the Court to administer the estate and handle the disposal of any assets, unless the estate value is small.
If you die without a valid Will, or your Will is invalid, your estate will be treated as an “intestate” and your assets will be distributed among your surviving relatives.
Alternatively, the State could decide to award the assets to itself.
In South Australia, if you get married your Will is automatically revoked, unless the Will was made with marriage in mind.
On the other hand, getting a divorce does not revoke your Will, but it does revoke any rights or distributions to your former spouse.
If there is no Will, the Tasmania Intestacy Act 2010 formula applies, and somebody needs to apply to the Tasmania Court for authority to become the administrator of the estate.
The spouse of a person with no Will will generally receive the whole estate unless there are children from another relationship. If this is the case, the surviving spouse has specific entitlements to the estate.
If there is a separated partner and a de facto partner, each spouse will receive a share of the estate.
If there are no children or spouses, the estate will be passed down the family tree to find someone who is eligible to inherit the assets. If there are no family members, the Government will receive the estate.
Separation from a partner does not have an effect on a Will but a marriage or divorce does revoke an existing Will.
The intestate rule applies in Victoria and assets can be distributed in a way that might not be in line with your wishes if you die without a Will in place.
The executor of the estate must obtain the Grant of Probate or Letters of Administration to take control of the estate.
If there is a Will in place, but not an executor, the family member would need to apply to the Registrar of Probates in the Supreme Court to receive access to the estate.
A separation from a spouse doesn’t affect the Will, however, a divorce does as well as a Will made before marriage.
If you pass away without a valid Will in Western Australia, your estate would be distributed under the direction of the Administration Act.
The Act would result in your estate being divided up between the family members surviving you, but does not take into account any of your wishes when distributing your estate.
In Western Australia, if you have a Will made after the 9th of February 2008, the document would be revoked after a divorce or marriage. In that case a new Will would need to be made.
Do you have any unusual requests you are intending to include in your will? Tell us in the comments below.