Planning for your future involves many decisions, such as how to invest your finances and where you would like to live. Many people are good at this type of planning, yet fail to plan for what will happen if they die or lose capacity for their affairs.
Queensland’s Public Trustee is highlighting important information about planning for the future including the importance of having a valid, up-to-date Will and an Enduring Power of Attorney.
What is a Will?
A Will is a legal document that sets out your wishes for the distribution of your estate when you die. Your estate comprises all the property you own on your death, and
the people who you leave your estate to are referred to
as your beneficiaries.
In your Will, you can:
- appoint one or more executors, who will be responsible for the administration of your estate
- appoint guardians for any minor children of whom you are a parent or guardian
- establish trusts for the benefit of particular persons – for example, beneficiaries who are minors or who have a disability – and appoint one or more trustees to look after the administration of such trusts; and
- make gifts to charities, such as the Queensland Community Foundation.
There are many reasons why people fail to make or update their Will, these include putting off thinking about the future, being afraid if they make their Will they will die, thinking making a Will is expensive, or thinking that only older people should make a Will.
People also may think that they don’t have enough assets to leave, however with the advent of compulsory superannuation and the death benefits that go with them, people’s estates may be worth a lot more than they think when they die.
Regardless of a person’s age, income or size of their estate – be it large or small, if you are over 18 it is important to make a Will if you want to ensure that your estate goes to those that you want it to.
What happens if you don’t make a will?
If you die without a valid Will, you are said to have died intestate. If you die intestate the law sets out who is entitled to your estate. Dying intestate can lead to a number of problems including:
- Your estate may not be distributed to the persons you would like to benefit
- Your loved ones may be subjected to an additional burden and cost at a time of grief and stress
- There may be delays and additional expenses in administering your estate
- Disagreement or conflict may arise as a result of the lack of clear written provisions about your wishes
People often make assumptions about who will get their estate if they die without a Will, for example, that their spouse will receive their whole estate and this may not be the case.
A valid Will is the only reliable means of ensuring that your wishes about what you want to happen with your estate are known.
When should you update your Will?
A Will is a living document that should change as your life changes.
It is advisable to review your Will regularly and update it whenever there is a significant change to your personal circumstances, your property, or your wishes in relation to your Will.
Important life events are often occasions when you need to review your Will and ensure it is updated to reflect your wishes. These life events can include:
- marriage or entering into a registered or de facto relationship
- separation from your spouse
- divorce or termination of a registered or de facto relationship
- birth of children
- birth of grandchildren
- changes to property specifically gifted in your Will
- death, loss of capacity, separation from, or bankruptcy of, beneficiaries, executors, trustees or guardians.
What is an executor?
An executor is who you choose to administer your estate after you die. This role can be complex, time consuming and can be a stressful role for a family member to undertake at a time of grief and loss. This role can be complicated further if there is family conflict around the estate.
Important considerations when choosing your executor?
As your executor will be undertaking a complex process involving a range of legal requirements it is important to consider:
- if they are willing and able to act as your executor
- their age, overall health and if they are knowledgeable, trustworthy, reliable and impartial and
- if there is any potential for conflict between the executor and your intended beneficiaries.
Being an executor is an important job that requires a sound knowledge of law, accounting, taxation and business practices, as well as good communication skills and diplomacy.
Tasks that your executor may need to carry out in administering your estate include:
- locating, examining and interpreting your Will
- locating and notifying the beneficiaries of your Will of their entitlements
- obtaining a grant of probate of your Will from the Supreme Court of Queensland
- identifying, collecting and protecting estate assets, including arranging appropriate insurance if necessary
- identifying estate debts and arranging for them to be paid
- preparing tax returns and obtaining tax clearances
- dealing with any disputes that may arise in relation to your Will or your estate
- preparing financial statements showing how your estate has been administered
- distributing your estate.
It is important to be aware that your executor will be at risk of personal liability for their actions and omissions in administering your estate.
It is not just deliberate wrongdoing that exposes an executor to the risk of personal liability – such personal liability can also arise as a result of inexperience or inattention.
For example, if your executor forgets to insure estate assets, then he or she could be personally liable for any loss to the estate if assets are lost, stolen, damaged or destroyed.
Contact your local Public Trustee Office
Making a Will is sound life planning for every stage of your life. If you need to have your Will made or updated, contact your local Public Trustee Office on 1300 360 044 or lawyer and ensure your future plans are in place.
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