A Will is a legal document that states a person’s instructions as to how their assets are to be distributed after their death. Wills in Victoria are governed by the Wills Act 1997.
The main advantage of making a Will is that the Will maker will have control over where and how their estate is divided. Will makers elect executors for the Will to carry out their wishes, and may elect beneficiaries for their estate, allocate gifts to certain persons, and direct how they are to lay their body to rest upon passing.
If a person passes away without making a Will, then their death will be treated an intestate, which means their estate will generally go to their next of kin.
It is crucial that your signing of your Will is witnessed by two people. If this requirement is not met, then the Will is not validly executed and thus not valid overall.
Any two adults, that is persons over the age of 18 years, is able to witness the signing of your Will. These two witnesses must see you sign the Will and must sign the Will in your presence. However, it is not necessary that one witness signs the Will in the presence of the other witness.
Under the Wills Act, any two adults can witness a Will. However, if a person is unable to see and attest that you have signed the document, then they are unable to act as a witness to your Will.
An Executor and Trustee of your Will is someone who will carry out your wishes stated in the Will.
You may appoint multiple Executors, although it is advised that not more than four Executors be appointed for practicality purposes. These Executors may act jointly or as alternatives to one another. It is important to notify the person or persons who you intend to appoint as Executor of your Will so they are aware of the obligations when the Will is to come into effect. Further, an Executor is not obligated to accept their role, therefore it is advisable you make alternate arrangements if this is the case.
Executor’s are generally entitled to an Executor’s commission. This may be included as a clause in the Will, alternatively an Executor may be granted Commission with consent from each beneficiary. There is also an option for an Executor to receive a payment in lieu of the commission, that is the Executor will receive a specified sum of money under a clause in the Will instead of the commission there are ordinarily entitled.
You Will will explicitly state where these assets are to be divided. For example, if you wish for a certain person to inherit your house, then you will need to provide that person’s full name and the property address to be distributed. Another example, if you wish to gift a certain amount of money, then you will need to include the person’s full name and the monetary amount to be gifted.
It is important to be clear and precise in your instructions in the Will to lessen the chances of challenge or invalidity. This is why it is important to seek legal advice so your Will can be properly drafted and executed in accordance with the law.
If you do not wish to have specific gifts in your Will, then the assets will form as your ‘residual estate’. This residual estate will go to the person you nominate in the Will.
It was common for Will makers to include directions relating to their medical care before death. However, these clauses are now largely redundant with the increase in enduring powers of attorney (medical treatment), governed by the Medical Treatment Planning and Decisions Act 2016.
As such, entering into a medical power of attorney will allow you to elect a treatment decision maker of your choice who will make medical based decisions on your behalf when you are no longer able to do so.
It is common for Will makers to include instructions as to whether they would like their remains to be subject to burial, cremation, or organ donation. A Will maker may also elect where they would like to be buried, and where they would like their ashes scattered. Further, Will makers may direct that their remains be available for medical or scientific purposes, such as education or research.
If you have such wishes, it is advised you inform your Executor. Often Will’s are not available to be seen by the Executor until after the funeral, so if you have strong wishes for your remains, then it is strongly advised you inform your Executor so they may act on your instructions.
You may include a guardianship provision in your Will in the event you pass away before your child or children turn 18 years of age. You may appoint someone as the guardian of your children, and this person will be authorised to provide food, accommodation, education expenses and so on.
However, it is important to know that guardianship of children is still subject to the family law, and in the event of a dispute the Family Court will make the final decision in the best interests of the children.
Superannuation monies does not automatically form part of the assets under to your Will. The amount in your superannuation fund can only be paid to the estate where the beneficiary is dependent on you for financial support, and strict rules apply for deciding whether this dependency exists.
As superannuation will not automatically become part of the Will, it is extremely important that you have a binding death benefit nomination with your superannuation fund in the event of your passing. This binding nomination with the superannuation fund directs the Superannuation Trustee where your money is to go and who receives the benefit in the event of your death. You may also instruct the portions of the fund to be allocated to each beneficiary in this binding nomination.
It is important to know that each superannuation fund has its own rules and regulations, so for clarification in regards to binding death benefit nominations, it is advised you contact your superannuation fund directly.
It is also important to be aware that distribution of your superannuation does attract tax implications. If the beneficiary is under the age of 18 years, tax will not apply as they will be classed as a dependent. However, for beneficiaries over the age of 18 years, normal tax rules apply in accordance with the Australian Taxation Office.
Wills may be challenged regarding validity for a number of reasons. Family members, dependents and beneficiaries named in the Will may question the validity alleging that it should not be held as the last Will of the Will maker.
In order to challenge a Will, a person must have standing to do so. This means that the challenger must have an interest in the Will either as a beneficiary or if they are an eligible person on intestacy ie the next of kin in intestacy.
One of the following grounds must be established for the Court to deem a Will as invalid including:
If any of your personal circumstances change, it is always important to think about how these changes could affect your Will. For example, if you get married, get divorced, or have a big financial change in your life.
Marriage revokes a Will unless the Will has been drafted in anticipation of a marriage. If you do not make a new Will after getting married, and eventually pass away, then your death will be treated as intestate and the relevant rules will apply. As such, this means that the estate will be distributed to your next of kin.
Divorce however does not completely render a Will inoperative. In the event of a divorce, any dispositions or appointment of your former spouse will be revoked and will be treated as if your former spouse passed away before you. The remaining contents of the Will however will remain valid.
Despite the rules applying to divorce, it is crucial to be aware that separation is treated differently. If you are only separated from your spouse and not yet divorced, then dispositions and appointments relating to them will still operate as normal.
If you hold assets or property in a different country, it is crucial to be aware that the laws may differ in relation to the application of Wills.
In some international laws, rules exist to override the directions in a Will. For example, in some countries a portion of the estate must be left to certain family members.
If you do hold assets or property overseas, it is advisable that you make a local Will to that other country as well as an Australian Will. In your Australian Will, you may state that you do have another local Will in another country.