It is important that everyone over the age of 18 years has a Will. Having a Will allows a person to set out how they would like their assets to be distributed after they die.
If you die without a Will your assets will be divided according to a legal formula, which in many cases may prove unsatisfactory and may not be as you would have desired.
A Will is also the place where you can indicate to your family and friends your wishes on other important matters, such as who you want to be the guardians of your minor children.
Regularly review your Will
Preparing a Will is not a once-off event. It is sensible to review your Will regularly.
Changes in both your personal and financial life may have unintended consequences for your Will. It may mean that the terms of your Will no longer reflect your wishes, and in some cases, it can even make your Will invalid.
It could be that a Will made many years ago is still appropriate, just as it may be that a recently made Will is now out of date.
Ideally you should review your Will annually, along with other annual events, such as lodging your tax returns. It is likely that your needs and circumstances will change many times during your life and with those changes it is prudent to review your Will.
Healthy Will Checklist
There are a number of life events that can impact your Will and which mean you need to revisit and maybe update it.
Here is a checklist of life changes which can impact on the validity of your Will and which you need to consider in examining the legal health of your existing Will.
- Have you married? Have you entered a civil partnership or a civil union? Are you in a de facto relationship?
- Have you separated from your partner? Have you divorced?
- Have you had a child or children?
- Have your children become adults? You should review your Will as each child turns 18.
- Do you have step children or step grandchildren? Do you wish them to benefit from your Will or not?
- Is the person you named as your executor of your Will still an appropriate choice?
- Have you named a guardian for your children under the age of 18 years?
- Have the circumstances of any beneficiaries changed to make you reconsider your wishes, or have any of them passed away?
- Have you nominated any specific gifts in your Will that are no longer valid or don’t exist? For example, have you sold a property that you had left to someone in your Will?
- Have you acquired any new assets that you would want to make specific plans for in your Will?
- Have you changed or added to your superannuation?
- Have you created a self-managed super fund?
- Have you created any new legal structures, such as a trust or company?
- Should you consider setting up a Testamentary Trust in your Will?
Superannuation and Life Insurance
At the same time as you check the health of your Will, you need to check your super and life insurance. In the case of the latter, it is often now a part of your superannuation.
Many people assume their superannuation will be paid in accordance with the wishes in their Will, but that is not necessarily the case. You need to look at the terms of your superannuation arrangements very carefully to check if you can direct where your superannuation is paid or not. If you are able to make a direction you should seek legal advice that you have done so in a legal and effective manner.
When reviewing your life insurance, here are some questions you may wish to ask yourself.
- Do you have adequate life insurance?
- Is life insurance part of your superannuation arrangement?
- Who is the owner of the policy?
- Who will the benefits be paid to on your death?
- Are these arrangements tax effective and do they fit into your estate plan?
For more information on Superannuation and Estate Planning click here.
Conclusion
The important thing is to regularly review your Will as your circumstances change.
If you would like to discuss a new Will or review your current estate planning arrangement, please call us on (02) 6140 3263 or email Tetlow Legal at [email protected].