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ARE YOU WILLING TO PROTECT YOUR FAMILY?
This week the NSW government is focusing on getting people to write a will, through a campaign called ‘Good Will Week’.
The law in relation to inheritance changed in March this year. If you die without a Will, the plan in your head for who gets what is useless.
Someone who dies without a Will is known as an intestate. An intestate’s estate, meaning everything they own, is distributed in a prescribed order according to NSW succession laws. If there is a spouse, they inherit everything. If there are multiple spouses, they split the estate equally. Children don’t receive anything, unless they are the intestate’s children from a prior relationship and their mother is not a spouse.
You can see how the situation could become potentially unpleasant. The idea is that children will naturally inherit later on, when the surviving spouse dies. Of course, should there be a falling-out between the spouse and a child, that child may end up with nothing.
Consider also the potential conflict between multiple spouses; the current one who has been living with the deceased for over two years, and the former spouse who was married to the deceased some time ago but they never officially divorced. ‘Spouse’ doesn’t necessarily mean ‘married’ anymore.
If there is no spouse and no known relatives, the state receives everything in the absence of a Will.
In other words, if you don’t write a will, you could be making things unnecessarily traumatic for those you love.
A Will must be legally valid, which is why do-it-yourself kits can be dangerous. Unclear wording can lead to misinterpretation. And a scrawled post-it note with an unwitnessed signature will not suffice.
A legally valid Will must be properly signed and witnessed, and must clearly identify an Executor (a person in charge of ensuring your estate gets distributed the way you have specified) and the people who are to receive part of the estate (beneficiaries). It should give consideration to the needs of all dependants, to avoid aggrieved family members contesting the Will. And it should be updated when circumstances change, such as a divorce, or a new baby.
You can go even further towards protecting your family’s future by putting a ‘wealth protection’ strategy in place. For example, a testamentary trust under a Will can have tax advantages and keep assets safe from creditors if a beneficiary owes money. Or an enduring guardianship allows you to appoint someone to make decisions on your behalf if you become unable to while you’re still alive, so you can’t be taken advantage of.
It’s all about safeguarding your assets, and making sure that the people you want to ultimately benefit from them, do. Getting advice and planning ahead is the key.