His will reads: ‘Being of sound mind and disposition, I blew it all’.
Do you need a will?
The simple answer to that question is yes, everyone needs a will.
It does not matter whether you own significant assets or not, a will is an essential document that everyone should have. Even if your assets are modest, relatives can end up in dispute about who is to receive them.
This can be costly and devastate a modest estate if a court becomes involved. Quite apart from the cost, such disputes can cause irreparable and lifelong damage to family relationships.
A recent survey found that only 59% of people have a will, leaving 41% who do not.
Many people avoid making wills for all sorts of reasons:
Unfortunately, the time when a will is most needed is when it is too late to do anything about it.
Some of the main reasons for having a will are:
The most obvious reason for having a will is so that your assets are distributed in the way that you want.
If you die without a will, there is no guarantee that your assets will be distributed as you intend.
A person who dies without a will, dies intestate.The rules of intestacy in the Succession Act set out how an estate is to be distributed when there is no will.
Dying ‘intestate’ can cause complications, delays and extra costs for those you leave behind.Depending on a person’s circumstances, their estate could end up being taken by the state. A will would prevent such drastic consequences from occurring.
A Will can also ensure that certain people do not receive a share of your estate.For example, you may have assisted one child during your lifetime with gifts or loans and believe that they should receive a smaller share, or none of your estate, while your other children receive a greater share.
A will allows you to appoint a testamentary guardian for your minor children.
A testamentary guardian of a child has all the powers, rights and responsibilities for making decisions about the long-term care, welfare and development of the child, such as education, health or religious matters.By appointing a testamentary guardian, you are having your say in who should, or perhaps more importantly, who should not, be responsible for the care of your minor children if you should pass away.
It should be remembered however that a testamentary guardian only has authority over a child‘s care if there is no surviving parent and there has not been an order made in another court giving authority about a child’s daily care to another person.
All estates, whether there is a will or not, must be distributed and finalised.
If there is a will in place this process is significantly easier and quicker. A will sets out how your assets are to be distributed and who has the responsibility for doing so.
When a will is not in place, there are no directions for distribution, nor is anyone authorised to manage the estate. As a result, the court will have to be involved in the process, causing significant delays and costs to the estate. The consequence of this is that there is less remaining for the beneficiaries when the process is completed.
No one wants to pay more tax than they have to.
A good will is one which is the result of a thorough estate planning process which involves taking the advice of experienced accountants on tax issues in estate matters.
By going through an estate planning process and taking into account the advice of tax specialists, a will can be drafted to minimise the taxes which an estate must pay. Without a will in place, the ability to distribute assets and arrange affairs tax effectively may not be possible, causing your estate to pay more tax than it otherwise would have.
If you have a Will, you are appointing the executor of your choice to manage your estate on your behalf.
Executors play a very important role in managing your estate. They must be trustworthy, honest, organised, reliable, and responsible. They are being entrusted with everything you own, with the expectation that they will carry out your wishes.
You will have considered all the candidates, whether they be relatives or friends, and made a considered decision. There will certainly be relatives that you would never choose for the role. If you die without a will, that choice is no longer in your hands.
With a will, you decide who is worthy to receive a gift from you – whether it be children, friends or other relatives or even charities.
You may have very strong views about who is entitled to your estate and who is not. If you do not have a will then there is a real risk that relatives who are undeserving could receive a part of your estate.
You can set out in your will, gifts to charities which have been very important to you throughout your life.
You may have in mind making gifts to organisations which have carried out work in the community which you strongly support and want to see continue. Any charities which you support in life however will not receive a share of your estate if you die without a will. Your estate can only be distributed in accordance with the rules of intestacy, which does not provide for any gifts to charities.
Do you have a family business that you have spent your life building up with the intention that it will carry on after your passing?
In your will you are able to plan for the future and appoint the people you trust to ensure the continued operation of your business while your estate is being managed.
Without a will, an administrator without any business experience may be left to make those decisions, placing all your hard work at risk. At worst, your business may be wound-up contrary to whatever your wishes may have been.
A will should deal with your current circumstances.
What is certain is that over time your circumstances will change. You may marry or separate, have children or have significant changes in your financial circumstances.
Whatever the case, your will should reflect your current state of affairs. A major benefit of a will is that you are able to easily update it at any time to match your changing situation.
It is a fact of life that most of us do not know when we are going to die. It can happen suddenly without warning. Procrastination and a reluctance to think about one’s mortality are common traits.
The realisation that a will is necessary may come too late for some because of a sudden death or because of incapacity issues.
The result will be that family members will be left with significant stress and difficulties in managing your affairs and distributing your estate, which could have been very simply avoided by having a will in place.
The above are only some of the reasons why it is important to have a will – there are many more.
If any of these reasons strike a chord with you, or your will does not reflect your current circumstances, then contact us on 07 4632 8484 to arrange an appointment.
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