Why do I need a will?
If you are over 18 and
have assets, you should have a will. If you die without a will,
you are said to have died intestate and your assets will be distributed
in accordance with arbitrary rules set out in the Administration and
Probate Act. The persons named in this Act may not be those you
wish to benefit.
Do I ever need to change my will?
Major life changes such
as entering into marriage or a de facto relationship, separating,
divorcing or retiring may all necessitate changes to your existing will.
Marriage always cancels any previous will unless that will states that
it is made in contemplation of the marriage. Separation or divorce
does not, although divorce will, in most circumstances, cancel part of
your will. There is no need to change your will simply because you
change your address, although you should notify whoever is holding your
original will of your new address.
Should I see a professional to make my
will?
Yes. Do-it-yourself
will kits are generally not recommended. If the wording of your
will is not clear (and bear in mind this is a very technical area where
the words you use may be interpreted by a court to mean something other
than what you actually intended), it could cost your estate thousands of
dollars in legal fees to obtain a ruling from the Court on the true
meaning of the will.
In addition, some of
your assets may not fall into your estate on your death and your will
may not reflect your true intent. Joint assets, assets in a family
or discretionary trust, life interests, pensions, annuities and
superannuation proceeds may not form part of your estate depending on
circumstances. A solicitor experienced in estate planning
will be able to give you advice on which assets will fall into your
estate. He or she may also be able to suggest ways of:-
-
changing ownership or
assets during your lifetime so that your executors will not need a
grant of probate
-
structuring your will in
order to protect your beneficiaries from potential creditors
-
structuring your will in
order to minimise tax paid by beneficiaries on the income they earn
from their inheritance and
-
ensuring that your
superannuation is distributed in accordance with your wishes.
Who do I see to make a will?
Either a solicitor or
trustee company.
What is the difference?
A solicitor will charge
a fee to prepare your Will but, unlike a trustee company, will not be
entitled to a percentage of your estate on your death.
What sort of percentage does a trustee
company charge?
Up to 4-6% of your gross
estate, plus legal fees. On an estate with a gross value of $200,000,
this could mean a fee in excess $12,000.
If I do not have a trustee company as my
executor, whom do I appoint?
You can appoint members
of your family or your partner (beneficiaries can also be executors), or
your accountant or solicitor. If your executors are not familiar with
estates they will usually engage solicitor to assist them.
What will a solicitor charge my estate?
A solicitor will charge
for what he or she does. Most estates are simple and quick to finalise
and a fee of about $1,000-$1,400 is common where probate is obtained
What will a solicitor charge to prepare
my will?
About $110-$160 is
common. A solicitor can also advise you on estate planning issues and
may be able to advise you on strategies to help minimise estate
administration costs and reduce taxation of your beneficiaries' share of
your estate. Click here to view
our standard fees.
Are there any other Government fees or
death duties?
Apart from a fee
($841.00 from 1 July 2010) paid to the Supreme Court (if probate is needed),
there are no direct death duties. However, capital gains tax may
be payable by your estate and it is advisable to consult a solicitor
experienced in estate administration before you dispose of major assets
in an estate
What is Probate?
It is a document issued
by the Supreme Court proving your last will, thus empowering your
executors to carry out the terms of your Will
When is Probate required?
Generally, if you own
real estate (other then jointly with your spouse or any other person),
or have other significant assets in your own name such as shares,
debentures, money in financial institutions or life assurance policies.
However, in small estates the assets may be able to be transferred
without probate if there is no real estate involved.
Can you give me a practical example of
what happens if I die without a will?
If you are married with
children, your spouse may not receive all your estate upon your death.
Your spouse will receive the first $100,000.00 of your estate and one
half of the balance. Your children will receive the other half at the
age of 18 years. This may cause your spouse financial
difficulties.
If you are living in a
de facto relationship, your partner may have to make a costly and
time-consuming application to the Supreme Court to prove that he or she
was your putative spouse at the time of your death, so it is
particularly important that each of you has a will.
What would my family do if I died without
a will?
Depending on the assets
in your estate, your closest family member may have to obtain what is
called a Grant of Letters of Administration from the Supreme Court.
This would enable them to deal with the assets in your estate and
distribute them in accordance with the intestacy rules. A report
would also have to be made on finalisation of your estate, together with
payment of a fee, to Public Trustee. If you have children under
18, their share of your estate must be paid to Public Trustee, who would
charge commission each year to administer that share. A solicitor
can advise your family regarding the procedure to be followed.
Can anyone challenge my will?
The Inheritance (Family
Provision) Act sets out who can challenge your will. Basically
this is limited to your spouse (including de facto in some
circumstances), children, former spouse and stepchildren (again, only in
some circumstances) and grandchildren. Parents and siblings can
also challenge but only if they satisfy the court that they cared for or
contributed to your maintenance during your lifetime.
This is a technical
area and your solicitor can advise you further if you are contemplating
leaving someone out of your will who could later challenge your will.
Sometimes strategies can be put into place to remove this possibility.
For more information
contact:
Tony Rice (08) 8415 5000
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