We all know that we should have a Will, but do you actually know what a Will is and what are the consequences of not having one should you die without one?
What is a Will?
A Will is a legal document that outlines how you would like your assets (Estate) distributed when you die and appoints the person who will be responsible for the administration of your estate.
What if I die without a valid Will?
If you die without a Will, you are said to have died intestate. Dying without a Will can mean:
- Your Estate may not be distributed to your beneficiaries in the way that you would wish.
- You may not have left clear provision for your loved ones and you may be placing an extra burden on them at a time of stress, grief and loss.
- There may be potential for conflict between the beneficiaries of your Estate.
- It may take more time and money to finalise your Deceased Estate.
Who needs a Will?
Everyone over 18 who has capacity to make a Will, should make one. Regardless of the size of your Estate, it’s important to have a valid Will. A Will is a living document that accompanies you on your life’s journey. Important life stages for updating your Will are:
- separation or divorce
- entering a de facto relationship
- birth of a child or grandchild
- a change to your assets or financial circumstances
- death of a spouse or partner
- a change to a beneficiary (a beneficiary is someone who you would like to have a share of your Estate)
- natural disasters.
A Will also provides you with the opportunity to:
- name guardians for your children
- establish a trust to provide for children
- establish a trust for a person with a disability
- ensure preservation of assets
- give money to charity and philanthropic organisations such as the Queensland Community Foundation. For more information visit www.qcf.org.au
Scenario – If you die without a Will all of your estate may not automatically be given to your spouse.
Emily and Darren were married and had a daughter, Zoe. Due to family disagreements, Zoe was estranged from her parents for many years. When Darren died without a Will, instead of the entire estate passing to Emily, a portion was given to Zoe. Even though, Emily maintained Darren would have wanted the estate to go entirely to her and not to Zoe. Did you know that the Queensland intestacy laws have a formula for distributing assets when a person dies without a Will. In certain circumstances this may include children, in addition to a spouse. If only Darren had made a Will naming his wife as the only beneficiary of his estate.
Scenario – Estranged Father collects $1M
Amanda was 22 years of age when she died in a tragic accident. Amanda did not have a Will and her Estate received a $2M insurance payout due to her accidental death. Because she had not made a Will, Amanda’s estate was divided with 50% allocated to each of her parents. This was even though Amanda’s father deserted the family when she only was six months old and did not pay a cent of child support. The family claims there is no way Amanda would want her Dad to receive anything. If only Amanda had made her wishes known.
Having a valid Will in place is too much of an important matter to keep putting off.
Call us on 07 5437 8888 to discuss your options.
David Cook CPA – Accountant