By Mitch Evelyn
Our team helps hundreds of people each year put together their plans for death or incapacity. Our role is to understand what your wishes are and ensure these are reflected in your Will. We often see well planned sensible Wills – however, we are also often instructed to prepare Wills (against our advice) which miss the mark and create headaches for friends and family after death.
Here are some of our top tips for making a good Will.
Keep it general
How your Will might work now could be very different from how it might work in a few years. We prepare our Wills so that they are flexible enough to account for large changes in your life between when you make your Will and when you die.
It is often better to describe things generally – such as “my primary residence” or “any motor vehicle I might own” if there is a risk that you won’t own them at your death. These sorts of gifts need to be phrased very carefully to make sure that they do not fail, so it is important to only include them in your Will with a lawyer’s help.
Talk to your family and ask them what they would want
Remember, you aren’t only making a Will for you, but for your family or your beneficiaries. If you are going to give specific things to certain people, you should make sure that you are giving them things which they actually want or need.
Sometimes beneficiaries are embarrassed by being given a larger share of an estate – to the point where they actually give some of their share to other beneficiaries. Sometimes, people receive property which they simply don’t want or need, and either give it away, sell it, or forget about it.
Don’t put too many people in charge
The old saying about “many hands” doesn’t apply in all situations. Generally speaking, having one or two executors at a time is ideal – more than that can often slow down the administration of your estate and create double handling issues.
If you appoint, say, four executors, then your executors need to work around four separate availabilities. This can be further complicated if one lives far away or doesn’t get along with the others. Weeks can be added to the winding up of your estate as documents are sent back and forth across the country.
Resist the urge to appoint everyone as an executor – one or two, with a backup executor to step in if your first executor cannot act, is more than enough.
You can’t plan for everything
When we prepare a Will, we stress test it by imagining what might happen if your circumstances were to change. However, there comes a point where there is no need to keep planning and the best course is to let things run their course and change your Will if your circumstances change in the future.
A good Will plans for contingencies – for example, by giving the whole of your estate to your partner, and if partner has died before you, to your children, or if your children have died, to their children. A Will which tries to plan for every contingency will often be more expensive and unnecessarily complex, both to prepare and administer.
Don’t rule from the grave
We sometime see people create elaborate and complex Wills which are heavy-handed in controlling how their family will receive and use their inheritance. Often, these include contingent gifts (for instance, person X will receive their inheritance only if something happens), or creating trusts which “drip feed” an income to beneficiaries.
These methods sometimes have their place. However, it is also important to bear in mind that you may be restricting your beneficiaries from reacting to changes in their own circumstances or needs – for instance, if their health takes a turn, or they lose everything in a natural disaster.
Beware of gifts which carry obligations
When you gift a house to someone, you are also giving an obligation to pay rates or maintenance, or possibly even refinance a mortgage to keep the property. If your beneficiary cannot afford to do this, then they are often placed in a difficult position – they may not be able to afford to keep your gift.
Some gifts can also be tax time bombs – for instance, if you give shares or property which may be subject to Capital Gains Tax to a person who is on a higher annual income, that person may need to pay more tax if they choose to sell those shares in the future.
You should also be careful when giving pets away in your Will. Always make sure the person has the financial means to care for the animal, and to provide it with a healthy physical environment and exercise.
We encourage you to think carefully over your Will and, if appropriate, discuss it with your family. When you are satisfied that you know what your Will should look like, call elringtons and ask to speak to one of our experienced Estate Planning lawyers at either our Canberra or Queanbeyan office.
e: info@elringtons.com.au | p: +61 2 6206 1300