Why Everyone Needs a Will…Friday, April 27, 2018
Whilst no one wants to think about it, unfortunately death will come to all of us… and we do not know when.
It is so important to have a well-drafted Will, in order to ensure that upon your death, your hard-earned money, and precious assets:
• are passed to the people you want;
• support your beneficiaries’ needs
(such as a surviving spouse or children);
• are divided or shared in the way you want;
• is completed as quickly and simply as possible; and
• as tax effectively as possible.
We often hear people say, “But I don’t have anything to give away”. Whilst this may seem the case, people often forget that they may have superannuation, with a large life insurance attached (sometimes which can be in the hundreds of thousands of dollars), which may be paid to their estate.
Losing a loved one is hard enough, without those you leave behind having to deal with the stress and complication of dealing with your affairs if you do not leave a Will.
Also, a lot of people fail to appreciate that a Will is so much more than just giving away assets.
Executor: A Will allows you to choose and appoint one or more trusted persons to act as your ‘executor’. Their role is to collect all your assets (such as bank accounts, shares, insurance policies etc.), pay all your debts and distribute the balance to the beneficiaries in accordance with the directions laid down in your Will.
Guardian: Through your Will, you can appoint a guardian of children on the death of both parents.
Disposal of Body: You can express in your Will whether you want to be buried or cremated and any other specific wishes you have.
Business Structures: If you have any business structures, you should consider these as part of your estate plan. For example, you may need to pass powers of appointment of family trusts through your Will, or gift shares in a company.
Not all Wills are made equal though. You may like to consider including ‘Testamentary Trusts’ in your Will. A Testamentary (Death) Trust is in essence, a trust contained in a Will. A trust is simply a relationship whereby a trustee (the manager of the trust) holds money and assets for the benefit of another person or persons (beneficiaries). Testamentary Trusts can assist to minimise the taxation payable on the income your beneficiaries earn
Beware of ‘one size fits all’ Wills (such as post-office wills) – as these may not suit your family circumstances. We are seeing many more mixed families, which may require other strategies to be implemented.
This is similarly the case if you are wanting to cut a family member out of the Will. Extra safeguards may need to be put in place to minimise the risk of the Will being successfully contested.
It is essential to obtain advice from a solicitor experienced in succession, to ensure your Will is well-drafted and your entire estate plan has been catered for (including any superannuation nominations, life insurance nominations, business structures and enduring powers of attorney).
Having your affairs in order can offer you considerable peace of mind, knowing your wishes will be carried out upon your death and your loved ones will be taken care of.
Article submitted by: Suzanne Brown Director of McKays