Why you need a will - Women's Agenda

Why you need a will

Nobody likes to talk about dying or permanent incapacitation, especially if they’re young and in relatively good health. But as the news in recent weeks has sadly demonstrated, unexpected tragedies do occur and people can die suddenly. The situation can be made much worse if the deceased person doesn’t have a valid will.

The laws on wills and powers of attorney are State-based, and are different depending on your State or Territory. I will cover the basic principles; a lawyer in your home town can assist with the finer details.

Why have a will? If you don’t, the government will decide what happens to your assets (according to intestacy legislation) and you won’t be able to express any preferences for who cares for your young children. If you die without a will, it can result in distressing outcomes for your family, often creating conflict. Some State intestacy legislation doesn’t recognise step-children, or new de facto partners when you haven’t divorced your former partner. There may be no scope to leave gifts to charities and friends. For anyone with a blended family, getting a will made is absolutely essential.

While you can’t stop a family member challenging your will, you can make it difficult for them to succeed, by clearly and reasonably setting out your wishes in your will. Who you appoint as the executor is important, as they will be responsible for carrying out your instructions. These can include the establishment of a testamentary trust and the investment of your money, to support your children and other beneficiaries under your will.

Do-it-yourself will kits are limited in scope and can easily create ambiguity. There is no point getting a will made unless it’s enforceable.

Why have powers of attorney? These enable you to appoint a particular person/people to make financial, medical and lifestyle decisions on your behalf, should you become incapacitated but are still alive. Instead of family members indecisively arguing, a power of attorney gives the appointed person the authority to speak and act on your behalf. This can include making decisions about your medical care and where you will live, as well as managing (including selling) your assets. Some powers of attorney only become valid once you lose mental capacity; others can take effect from the date the document is signed. Think carefully who you choose as your attorney and ensure they know your wishes in advance of you losing mental capacity. You can’t give a power of attorney once you have lost capacity: the only option then is a guardianship order made by your State’s administrative tribunal.

What about superannuation? Super does not automatically form part of your estate when you die. Your superannuation trustee has discretion whom to pay the balance of your account to – unless you provide them with what’s called a binding superannuation death benefit nomination. Some funds have their own forms that they require to be completed, others will accept any standard document that makes it clear it is a binding nomination. They are generally valid for three years. Who you leave your super to (whether an individual or your estate) can have adverse tax consequences, so speak to your accountant before making a decision. Life insurance policy benefits are similarly affected.

What next? While the process of preparing these documents can be tedious, it’s very important to capture all your assets and be clear on what aren’t your assets (such as an interest in a business or trust, or the remaining shares in a property you hold as a joint tenant). Other issues to cover include life estates and what happens to your body after you pass away. Talk to a lawyer, ask lots of questions and gain the peace of mind of knowing that everything will be captured in writing, and safely tucked away in a drawer, just in case tragedy strikes.

Note: the above is general information and should not be considered as legal advice.

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