How to draft a legally valid Will
An adult of any age, financial status or family circumstance should have a properly prepared will.
The purpose of a will is to ensure that your estate, which is the sum of your assets, rights, interests and entitlements to property of any kind, is dealt with in accordance with your wishes.
If you do not draft a will or update your existing will when your circumstances change, once you die you may leave behind financial and emotional turmoil for your family.
The importance of 'doing it right'
It is essential that care is taken with the emergence of 'do it yourself will kits'. When drafting a will, it is paramount that the form of the will complies with the statutory provisions of each state and demonstrates a Wills Act such as Wills Act 1997 (in Victoria). A failure to follow the statutory requirements will result in the will being either wholly or partly invalid.
Further, you may be surprised that there are certain circumstances where you may not have the legal right to leave property to a beneficiary.
For example, if you own real property with another party you will need to consider what the nature of the ownership is. Is the real property held in joint tenancy or as tenants in common?
In this example, it is important to ascertain the nature of your ownership rights in land as different rules can apply depending on the ownership structure.
A poorly drafted will may contain ambiguous language or a misdescription of assets which can make it difficult to identify the assets intended and where they can be found.
Superannuation & Life Insurance – not part of a will
A common area that people overlook when drafting their will is their superannuation accounts and/or life insurance policies. These accounts and their respective payouts are not testamentary in nature and as such, they cannot be included in a will.
Instead a binding death nomination form must be submitted to the superannuation fund to ensure that the payouts are distributed to the correct beneficiaries. This binding nomination has a time limit of 3 years. Therefore it is important to remember that a new binding nomination must be submitted every 3 years.
In regards to life insurance policies, it is important to remember to change the beneficiary of the policy if your personal circumstances change.
New parent? Newly divorced? Time to update your will
Key circumstances that will necessitate the drafting of a new or amended will include:
- Having children – a will should be updated upon birth of each child
- Purchase or sale of major assets such as property, shares or investment items
- Changes in financial position.
Making a new will avoids the situation where a current will is outdated or invalid.
Powers of Attorney
When considering drafting a will, we encourage you to also nominate a power of attorney. The power of attorney appointed by you makes decisions if you do not have the capacity to do so.
In Victoria for example, there are two types of powers of attorney:
- a medical power of attorney; and
- a general power of attorney.
A medical power of attorney has the power to make decisions in regards to your health when you are unable to do so. Common examples include decisions in regards to surgery and further health care.
A general power of attorney has the power to make decisions in all other matters including financial transactions. An example might be if you are overseas and can’t be contacted for a period of time.
Peace of mind
The beauty of 'biting the bullet' and seeing your legal professional to have your will and power of attorney drafted is that once it is done, subject to a change in your circumstances, you will have peace of mind that your affairs are in good order.
A failure to draft a will or amend a will can lead to serious consequences. It can be an emotional and financial drain on the people you intended to take care of.
The expenses incurred in contesting a will come directly from the estate. It can be a lengthy process and in some cases, long standing family issues can form the basis of will disputes.
A will drafted by a legal professional can give you the peace of mind that your wishes will be carried out.
At DSS Law, our lawyers are experienced in estate planning and succession law including drafting wills and powers of attorney as well as advising executors and beneficiaries should it be necessary to undertake litigation to challenge a will. We ensure the welfare and administration of our clients’ financial and legal affairs are managed in their best interests.
DSS Law insight articles are intended to provide commentary and general information. They should not be relied upon as formal legal advice. If you would like specific advice relating to this topic, please contact DSS Law on email@example.com.