The 10 Most Common Mistakes People Make With Will Preparation
According to the 2017 WA Public Trustee Survey, only 50% of West Australians over the age of 40 and 19% of Perth families with young children have a valid Will.
Effectively, this means the majority of people in Perth are rolling the dice and leaving it up to the WA Supreme Court to decide how their estates should be divided if they pass away.
In Willcraft Estate Planning’s experience, people also generally file their Will away and forget to review it in light of life-changing events that affect the person and their beneficiaries. Read on to find out more.
Why is it important to make a Will?
There are many reasons to make a Will, including:
- Having a voice: ensuring your estate is divided in the manner you want it to be
- Financial stability for your family: ensuring that your spouse, children and other loved ones are financially taken care of (as intestacy laws currently prioritise children over spouses, and assets can be frozen during the Administration process while bills continue to pile up)
- Peace of mind for your family: allowing your family to confidently carry out your wishes and have the space to grieve while minimising the risk of squabbling
- Guardianship: appointing guardians for your children if you and their other parent both pass away (this is the only way you’re able to choose guardians – otherwise the Court will decide guardianship and your children may end up in foster care while the Court decides)
- Family dynamics: humans are complex and so are our relationships – having a Will allows you to reflect these complexities (e.g. estranged family members)
- Stepchildren: being able to include any stepchildren, who in most cases wouldn’t otherwise be recognised as beneficiaries unless you’ve formally adopted them
- Support network: being able to bequeath cash and personal items to people outside of your family
- Unforeseen expenses: avoiding the Administration process, which can be costly for your loved ones and your estate (as they will most likely need to engage a lawyer)
- Tax minimisation: having structures in place to minimise the tax for any investment income from your estate, especially for minors.
Why is important to consider Estate Planning in Perth?
A Will only takes care of things when you’ve passed away. So what happens if you’re seriously injured or otherwise incapacitated?
This is where Estate Planning comes in. In addition to being able to structure your estate to minimise tax for your beneficiaries and take care of any dependents, you’re able to:
- Nominate an Enduring Power of Attorney (EPA) – a trusted person who’ll look after your property and financial affairs if you’re unable to yourself (e.g. paying bills, accessing money from superannuation, selling assets such as shares or property, and so on)
- Nominate an Enduring Power of Guardianship (EPG) – a trusted person who can make informed decisions regarding your health and lifestyle if you’re not otherwise able to (this is especially important if you’d like someone other than your Next of Kin to do it)
- Create an Advanced Health Directive – a document that contains your decisions about future medical, surgical and dental treatments, and also often relates to ‘end of life’ decisions
You can complete these processes separately or at the same time. For Enduring Power of Attorney (EPA) and Enduring Power of Guardianship (EPG), you can also nominate the same person or two different people, depending on your needs and preferences.
It’s important to note that there are some minor differences in Estate Planning between the different states, depending on the legal jurisdiction and how property ownership is treated. A Will made in Perth will cover assets anywhere in Australia, although the differences in State Legislation can affect the rights of beneficiaries in certain circumstances.
What are the most common mistakes people make with Will preparation and Estate Planning in Perth?
- Procrastination: no-one wants to tempt fate and these processes involve big decisions like guardianship – but as difficult as these decisions are, they’re important ones
- Location: don’t forget to tell your loved ones where your Will is or who compiled it (e.g. among your personal belongings, at the bank, with your lawyer or accountant and so on) – Willcraft has a secure custody facility that prevents loss and we notify your potential Executors that we have the documents
- Will Kits: DIY Will Kits are available at post offices and newsagents, but many people miss steps and their Will becomes invalid (e.g. appropriately signing and witnessing the document but forgetting to appoint an Executor), and Will Kits often don’t take legal and financial complexities into account
- Longevity: your Will needs to be updated for any significant changes in circumstances (e.g. marriage, divorce, births of children, deaths in the family and so on)
- Partial intestacy: this happens when some terms of your Will aren’t enforceable (e.g. bequeathing a car that you previously sold, or beneficiaries passing away before you)
- Business: your Will needs to reference any companies, trusts or business partnerships you have created, and you may need to appoint someone to take over as director of the company or trustee of a trust
- Joint assets: ensuring joint asset ownership is appropriately structured (e.g. if a house is owned as Joint Tenancy your co-owner will automatically inherit your share, whereas if it’s owned as Tenants in Common you can nominate a beneficiary for your share)
- Estate-related agreements: your Will should factor in any agreements that may affect how your estate is divided (e.g. if you’ve given money to an adult child as an advance on their inheritance, this needs to be documented because it’s easy for people to forget)
- Life insurance and superannuation beneficiaries: you need to ensure that you’ve nominated beneficiaries for any superannuation funds and life insurance policies, otherwise the money may be withheld until the Administration process is wrapped up
- Undervaluation: it’s especially common for people under 40
tonot realise the full extent of their estate (e.g. a 35-year-old may have $10,000 in superannuation but forget about their $500,000 life insurance policy that may be attached to it)
Engaging a specialist Will lawyer such as our team at Willcraft means gaining the peace of mind that your Will reflects your needs and wishes. Our comprehensive Will services also take your ongoing, changing circumstances into consideration – for example, factoring in potential future scenarios and establishing safeguards to avoid partial intestacy.
What if I don’t have a Will or need to update it?
Our team of specialist Will lawyers has also created a whole series of fact sheets. They cover a variety of important things to keep in mind when you make a Will, as well as the different types of Estate Planning and Will services that we offer in Perth.