The issue
The modern family is an increasingly complex organisation. As instances of blended families and de facto relationships increase, there is a greater need for more comprehensive Wills and very careful estate planning, to ensure that your estate ends up in the hands of those whom you intend to benefit and then in the most advantageous manner for them. Applying a 'one size fits all' approach to making a Will is no longer viable.
The advantages of a properly drafted Will
Of course, the first and foremost step in ensuring that your estate passes to your intended beneficiaries is to have a Will in place. The Administration and Probate Act 1958 sets out provisions for the distribution of an estate should there be no valid Will. Most people assume that everything will just go to their spouse, but this is not necessarily the case. For example, if you also leave behind children, then as much as two thirds of the estate (after an initial lump sum to your spouse) could pass directly to them. In our experience, these legislative provisions virtually never reflect the distribution that is preferred by someone when preparing their Will.
In preparing a Will, consideration can be given to all manner of eventual possibilities and family complexities. For example, should you protect your children's inheritance if your spouse also has children from a previous relationship? If one of your children predeceases you, should their partner receive anything? Do any beneficiaries need their share protected because of bankruptcy, potential family law disputes or addictions? With proper advice and planning, these types of issues can be worked through and provided for in a Will.
A properly drawn Will can reduce the risk of the Will being challenged by someone who thinks they should not have been left out, or should be getting a bigger share.
There are also opportunities for favourable tax planning through comprehensive estate planning in Wills. Wills can be drafted in a way that could help your beneficiaries to receive their inheritance, and future investment income, in a tax effective way.
Key points:
- A properly prepared Will is the only way of ensuring your estate goes to the people you intend to benefit. It can also limit and sometimes totally prevent your estate being challenged or disputed.
- Prepare your Will while you are still of sound mind and body. Leaving this until the last minute can result in a situation where you no longer have legal capacity to make or alter your Will, due to illness or infirmity.
- A distribution from an estate is likely to be the largest lump sum any of us will ever receive and can cause conflict in even the most harmonious family. A clear and comprehensive Will can assist in preventing potential disputes.
- Review your Will regularly. In particular, entering a new relationship, the birth of children, or separating from a partner should be triggers for thinking about whether your Will accurately reflects your current circumstances.
If you have any queries regarding estate planning, please feel free to call our Wills and Estates team on 1300 205 506.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.
