Do I really need a Will?

Every year, usually by way of a campaign funded by government departments or charity organisations, we are reminded of the importance of having a will. Yet every year the NSW Courts deal with thousands of applications where the deceased died without having a prepared a valid Will.

My personal theory is that there are three camps of people that meander through life in blissful and intentional ignorance of the need to have a valid Will. These are: (a) those for whom death is a cultural taboo; (b) those for whom the concept of mortality is a little too burdensome for their liking; and (c) those who simply believe that they have no valuable assets to give.

Although I have a certain level of empathy for these views, I cannot help but disagree with the transient consideration and consequential dismissal of relevance that some people attribute to Wills.

Almost everyone has an asset of some form to give after they have gone. There is a common misconception that if you do not own real estate, your estate is simple and you do not need a Will. Instead, ask yourself the following questions:

  1. Do you have bank accounts?
  2. Do you have a car?
  3. Do you have superannuation?
  4. Do you have shares?
  5. Do you have personal items (such as jewellery or artwork) that you wish to give to certain people?
  6. Would you like to make a gift to a charity?
  7. Would you like to grant someone a right to live in a house you own, but only for a certain amount of time, and thereafter gift the house to some else?
  8. Are you unsure as to who will actually collect all of your assets and distribute them when you pass away?
  9. Do you envisage that there may be family conflict if you do not clearly communicate your wishes?

Considering the state of the law in New South Wales, I can confidently wager that it would be easier to find a real life Bigfoot than it would be to find a legal or financial professional that does not believe that considered estate planning is the best legacy one can leave for their loved ones.

The most obvious advantage is the fact that by leaving a Will you give your loved ones certainty as to your intentions. Your Will informs your family who you want to deal with your affairs when you’re gone and how you would like your assets distributed.

The second advantage is that you escape the automatic and indiscriminate application of the Intestacy Rules found in the Succession Act. When you die without a Will, you are said to have died ‘Intestate’. New South Wales prescribes a set of statutory rules which require the distribution of an intestate estate according to a strict formula that pays no attention to the deceased’s actual intentions before passing away.  There are different formulas based on the particular family circumstances of the deceased.

Further, as Succession Law is State-based law, it varies from state to state. The formula applied to the intestate estate will depending upon in which state or territory the deceased lived when they passed away.

These statutory formulas are based on what the Parliament considers as the current moral approach towards the distribution your assets after you pass away. This is based on mainstream and traditional forms of the concept of “family”. Today, Australia is a celebrated hub of varying cultures, family structures and attitudes towards moral responsibility. It would be incredibly simplistic and naive to assume that the single mandatory framework imposed by the current Legislation would align with the intentions and values of each individual across Australia society.

If you wish to have the ultimate control over who will and will not inherit assets from your estate, there is no substitute for exercising your testamentary freedom and making a Will.

Here is a common example of where inadvertent reliance upon the intestacy rules have created a result unintended by the deceased:

  1. Brad and Angelina were married 15 years ago. They did not have children. Instead, they gathered significant assets during their relationship.
  2. About 3 years ago Brad and Angelina separated. They completed a property settlement but decide against divorcing (at that point of time) because of the additional costs.
  3. Sometime later, Angelina was diagnosed with a terminal illness and passed away.
  4. Before she died, she had told her brother Andrew and that he would receive her estate.
  5. But Andrew is not entitled to Angelina’s large estate. In all Australian jurisdictions Brad, as the spouse, takes the lot.

This outcome was completely preventable. Angelina could have made a Will during their separation or obtained a divorce. To avoid a potentially unjust distribution of your estate, and minimise the emotional turmoil of your loved ones, you should rearrange your list of priorities and put making a Will at the top!

 

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