Often, when people think of estate planning, they focus on the consequences following death. As a result, they often do not appreciate that there are many documents which need to be properly drafted as part of their estate planning. Of those, the Will is a key document.
A Will provides guidance on what is to happen with a person’s assets (their ‘estate’) and indicates who will be responsible for overseeing the terms of their Will and carrying out those wishes. Many people think this is the start and end of their estate plan; a current Will to disburse their estate. While it is an integral part of an estate plan, it’s just one of three key documents that might be necessary.
A properly drawn Will can:
- be a powerful tax-planning tool
- provide a flexibility of options to enable maximum benefit passing to beneficiaries
- ensures that your wishes will be adhered.
A Will has no legal effect until death; it’s the last, valid Will which is given legal effect. Consequently, it’s important that any modifications are made carefully, with appropriate recognition of all the circumstances of the Will-maker. It’s also important that the Will be properly stored and easily locatable upon death of a person.
Only the assets that were owned by the deceased at the time of death form part of the deceased estate. If you would like to leave a gift in your Will to a charitable cause, such as Cystic Fibrosis Queensland, then not only should this be stated in your Will, but you should make it known to your immediate family to avoid this gift being contested. Therefore, it is so important to review all your affairs and related interests when making your Will.
Whenever there is a change in your personal circumstances you should review your Will and, where appropriate, make a new one.
A person who dies without a valid Will is said to have died intestate. Each state and territory have its own specific intestacy rules, which include who may be entitled to the deceased assets and how much they may be entitled to receive.
In many jurisdictions, assets are generally distributed according to a predetermined formula with certain family members receiving a defined percentage of the assets. This will typically depend upon whether the deceased had a spouse and/or issue (e.g., children or other descendants).