Most people are uncomfortable planning for the inevitable end to their lives. Perhaps this goes some way to explaining why many individuals never create a will, causing further anguish and difficulty for their families when they pass away, despite the relative ease of making one. This article details the importance of creating a will and the occasions that it should be updated, while Part 2 will focus on some important information that you should include in your will for it to be valid.
A will is a legal document that distributes your assets (your estate) to your beneficiaries when you die. Any person over the age of 18 and with the mental capacity to understand their actions can make a will. Your will also appoints an executor, the person who manages your estate (and distributes your assets) when you die. An executor can be anyone, from a lawyer, to an accountant, to a close family friend. However, due to the amount of power that the executor is given to manage your estate, it is important to choose somebody that you trust and believe will do a competent job.
What if I don’t have a will?
If you choose not to make a will, your assets will be distributed according to a formula set out by the law, which may not reflect the distribution you would have chosen. Other disadvantages of not making your own will include:
· Partners, stepchildren and charities may not receive anything.
· You have no control over who will be the guardian of your children.
· Your estate may not be handled in the most tax-advantageous way.
· The family home may need to be sold in order to provide for your children.
If you wish to retain control of what happens to your assets when you die, it is essential to create a will.
When should I update my will?
Generally speaking, it is a good idea to review your will any time there is a change in the circumstances around any of the parties named in your will (beneficiaries or executors). This will ensure that there is no ambiguity surrounded how your will should be administered, or what should be done with certain assets (ie, if a beneficiary passes away before you). In particular, you should update your will if:
· You get married. A will made prior to a marriage is no longer valid after the marriage.
· You are separated from your spouse (but not divorced.) Any gifts under your will will not be revoked if you are merely separated. Accordingly, if you wish to remove your spouse from your will before your divorce, you need to create a new will.
· You are divorced. While any gifts under a previous will are automatically revoked when you get divorced, you should still update your will by redistributing those gifts to different beneficiaries. This minimizes chance of a challenge to your will.
Creating a will is essential if you wish to control how you provide for your family and friends when you die. However, there are many strict legal requirements that must be followed in order for your will to be valid. Part 2 of this article will discuss some of the important considerations and requirements that you should contemplate when making your will. If you would like to make a will or have any questions about this article, please get in contact with us on 03 8877 6888.
To read Part 2 of this article, which includes some important information that you should consider including into your will, click http://www.mahons.com.au/news/2016/5/12/what-information-do-i-need-to-put-into-my-will
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.