Making a will: What's involved?

According to ASIC, approximately half of all Australians die without a will. Do you have your affairs in order? We take a look at what making a will could involve.

When someone passes away without writing a will, typically an administrator is appointed by the court who will use the deceased’s assets to pay outstanding taxes and bills and determine the distribution of any remaining money based on an established formula, not necessarily how the deceased would have intended. If the person doesn’t have any living relatives, the assets are given to the state or territory government.

While it may be a morbid subject that many people would rather avoid, writing a will is important if you want to help ensure your assets are distributed as you would like. To make it a little easier for you, we look at how the process might work. Everyone’s situation is different, however, so when it comes to writing a will, it could be a wise idea to consult a suitably qualified professional, as this is general advice and could differ from your needs.

What is typically included in a will?

To put it simply, a will is the legal document that sets out how a person’s assets should be distributed after they die. It will contain instructions for how these assets should be divided up and given out. It can also cover some lifestyle requests such as nominating guardians for children as well as funeral and burial wishes. A will can also determine the timing of inheritances by use of trust structures (where a third party holds assets in “trust” for people), as well as donations the person would like to make to charities.

When writing a will, a person is generally required to appoint at least one executor who will ensure their wishes are enacted. It could be worth having a serious think about who to nominate as an executor. Some considerations could include their age, their relationship with your family and the complexity of your situation.

What typically isn’t covered in a will?

There are a number of assets that a person is likely to have that are not automatically dealt with through a will, generally speaking. Some of these assets can represent a significant chunk of a person’s total wealth.

  • Some jointly-held assets: If a person holds assets jointly with someone else (for example, a joint bank account, a joint home, a jointly-owned car), those assets will typically pass automatically to the co-owner rather than be distributed through a will. This may be the case even if a will specifies a different way for the assets to be distributed.
  • Superannuation proceeds: Superannuation is not automatically part of an estate. This can be especially significant if a person holds life insurance through their superannuation fund. Generally, the payout of superannuation and any associated life insurance is at the discretion of the trustee of the superannuation fund. It is possible to make a binding nomination, however these can be restrictive. It could be a wise idea to discuss this issue with your superannuation fund.
  • Life insurance policy proceeds: Most individual life insurance policies also do not automatically go through a will. A person can, however, nominate their estate as the beneficiary of the policy, in order to have the proceeds distributed via their will.
  • Interest that a person has as owner or beneficiary of a trust: Generally, the relevant trust deed (rules stating how the trust works) for any trust that a person may be a member of typically outlines how ownership will be transferred.

Can someone write their own will?

While it is possible that using a DIY will kit could be a less expensive option than having a will drafted by a solicitor, it is wise to keep in mind that a will is a legal document. If a will is not written properly, and it is not executed properly, it may be invalid. Because of this, it is often advisable to seek professional assistance.

“If you use an online will kit, get it checked by a solicitor or Public Trustee,” financial regulator ASIC’s Moneysmart.com.au website states, which adds that a solicitor or Public Trustee are likely to charge you for doing so.

“They can make sure it’s been done properly. If your will isn’t done properly, it will be invalid,” the website states.

Typically, anyone can prepare a will if they are over 18 years old and deemed to be of sound mind (also called “testamentary capacity”, where a person must have the mental capacity to understand the document they are creating ). A will must be:

  • in writing
  • signed by the owner of the will and be witnessed by two people (not an heir or spouse).

However, there could be different rules in different areas of Australia when it comes to wills, according to the Australian government’s australia.gov.au information portal. The site recommends that each person check the rules that apply in their state or territory before starting any work on a will.

If you choose to write your own will, it could be a good idea to take the following steps into account:

  1. Do your research – example wills are available online and you can read the samples to get an understanding of how you may like to structure your own.
  2. Explore DIY kits – there are many available for sale online.
  3. Understand your state’s specific requirements – visit your state’s Public Trustee’s website (listed below) to understand what is needed and what services may be available to you, including exemptions from charges. Follow advice from trusted sources (such as government sources), such as what to put in your will, how to nominate heirs, how to exclude people and who needs to sign or witness the will.
  4. File it carefully – tell those closest to you where they can find your will. It is also a good idea to keep a list of the legal documents you have and where they can be found.
  5. Consider having it checked – ASIC recommends that “if you use an online will kit, get it checked by a solicitor or Public Trustee. They can make sure it’s been done properly.” Some legal aid centres could also help.
  6. Keep updating it – once you have finished writing your will, don’t cast it aside and forget about it. Ensure you update it as your circumstances change.

If you’re comparing life insurance policies, the comparison table below displays some of the policies currently available on Canstar’s database for a 30-39 year old non-smoking male working in a professional occupation. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical) and features links direct to the provider’s website. Use Canstar’s life insurance comparison selector to view a wider range of policies.


Who can help write a will?

It is often a good idea to speak with a solicitor or another suitably qualified person to learn how to write a will that is legally binding as if your will isn’t signed and witnessed correctly, it will not be considered valid. A solicitor or Public Trustee could also draft the document for you. There are also community legal centres around the country that may be able to help.

ASIC states the Public Trustee might not charge to make your will if you are aged older than 60 or nominate the Public Trustee to be your executor (to see that the will is followed after you die). You may want to check with the Public Trustee in your state or territory to understand the requirements that apply to making a will where you live.

Source: moneysmart.gov.au

This article was reviewed by Senior Finance Journalist Amanda Horswill and sub editor Tom Letts before it was published as part of our fact-checking process.


 


About Shay Waraker

Shay WarakerWith a Bachelor of Journalism under her belt, Shay has lived and breathed content for almost a decade, including public relations and copywriting both in Australia and the UK. Today, she manages a team responsible for preparing engaging finance content for Canstar including video, our series of guides and securing contributed articles from external experts, as well as looking for the next content opportunity to help empower people to take control of their money. Shay is acknowledged by friends and family as being on the frugal side, a disposition that makes her passionate about helping Australians better manage their personal finances. You can find her trawling recent news, frequenting the green room or brainstorming ways to simplify financial topics in a quest to make personal finance the new black. You will also find her in the lunch room, because, well, she’s frugal and packs her own lunch.

 

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