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Writing a Will

QBM Lawyers – Estate lawyers Gold Coast - Writing a Will and Estate Planning

As wills and estate lawyers on the Gold Coast, estate planning and writing a Will involve three crucial steps:

  1. Firstly, identifying all assets that will be available after a person passes away.
  2. Secondly, ensuring those assets pass to intended beneficiaries in the desired proportions.
  3. Thirdly, documenting the person’s intentions.

These steps are essential in will writing and estate planning. Skipping the first two steps and rushing into writing a will can lead to improperly managed estates and serious consequences. This often happens with homemade wills and sometimes with wills drafted by inexperienced lawyers.

To draft a will correctly, most wills lawyers need a thorough understanding of the will maker’s financial situation. While this may seem intrusive, it’s necessary because not all assets a person believes they own may be available to their estate.

Writing A Will, lawyer for will. QBM Lawyers

Identifying Assets For Writing a Will

When estate planning and writing a will, there are several different types of assets to consider. These fall generally within the following categories:-

Jointly Owned Assets

Jointly owned assets typically include joint bank accounts, furniture, and jointly held properties by a couple. If a property is held as tenants in common, each person’s share is distributed according to their respective wills. Except for property held as tenants in common, assets held as joint tenants usually pass to the surviving owner regardless of the instructions in a will. However, under the Property Law Act, there is a presumption that property is held as tenants in common. This means that unless it’s explicitly stated as joint tenants, the property’s interest should be managed according to the will.

Solely Owned Assets

The next category of assets includes those owned solely by an individual. Typically, these assets can be distributed according to the terms of the will. However, many assets that individuals control may not be owned directly by them. They could be owned by companies under their control or held in their capacity as trustees of a trust.

Assets Held by Companies

When it comes to assets owned by companies, a person’s interest is reflected through their ownership of shares in the company. Therefore, it’s not the asset itself that is managed but rather the shares in the company that owns the asset. The financial statements of the company become crucial in this context. For instance, the person might have financial dealings with the company, such as owing or being owed money. Liquidating company assets to pass their value to the estate can have significant tax implications. It makes careful consideration necessary.

Assets Held by Discretionary or Family Trusts

Generally, the death of a primary beneficiary does not affect the ongoing operation of a trust. Sometimes, there may be loans either to or from the deceased person that need to be addressed in the administration of their estate. However, for practical purposes, if a person’s interest in an asset is as a beneficiary under a trust that owns the asset, their passing does not disturb ownership. It remains “business as usual” for the trust, subject to managing trustee actions.

When including assets held in trusts in estate planning, it’s typical to ensure that control of the trust is entrusted to someone who understands the wishes of the deceased. This often involves leaving ownership of shares in any trustee company to the intended controller. Trustee company may also be appointed as the principal or appointor under the trust deed—empowered to replace the trustee. 

Additionally, a letter accompanying the will can outline the deceased’s wishes for how the trust should be managed, though this “expression of wishes” is usually not legally binding.

Our lawyer for will would review the financial statements of trusts to check for beneficiary loans or other relevant issues. Therefore, when drafting a will, our lawyers must examine the client’s trust deed and financial statements to ensure the will accurately reflects their intentions.

Superannuation Benefits & Life Insurance Benefits

Benefits of superannuation and life insurance typically do not pass through a will because they are payouts from agreements triggered by death, not assets owned by the individual.

Superannuation Benefits

The super policies and self-managed super fund deeds often allow the nomination of beneficiaries, which can be lapsing or non-lapsing. It’s important to make these nominations alongside drafting a will. Alternatively, you can designate your will’s legal personal representative as the superannuation beneficiary, aligning the benefits with your will’s terms. Strict adherence to the superannuation policy’s nomination procedure is crucial for validity.

If no valid nominations exist, the super fund trustee may distribute proceeds to dependents defined in the policy—typically spouses, children, and those financially dependent with a familial connection. Legal advice is advisable due to court rulings on nomination validity and disputes, especially involving former spouses.

Life Insurance Benefits

Life insurance payouts bypass the will and are usually directed to the policy owner, though sometimes they become part of the estate. These benefits often do not cover creditor claims fully, so careful planning ensures they can meet intended liabilities and debts.

Documenting Your Intentions

Given these various types of assets, documenting a willmaker’s intentions may involve drafting a Will, Power of Attorney, or Binding Death Nomination for a superannuation fund. It’s also important to ensure that control of any trust where there is an expectancy passes to someone who will fulfil the willmaker’s wishes. Additionally, the will may include provisions such as granting beneficiaries an option to purchase a specific asset or a right to reside in a particular home.

For an experienced wills and estate lawyer, properly documenting intentions also means taking steps to minimize the risk of the will being contested. This can include the lawyer assessing the will maker’s competence and considering any external influences that may have affected decisions. In some cases, obtaining medical evidence to confirm testamentary capacity may be necessary. The lawyer for will may also advise on potential claims that could arise and suggest strategies to reduce these risks. The willmaker may wish to exclude a dependent or child

Testamentary Trusts

Testamentary trusts, often referred to as testamentary discretionary trusts, are commonly used in wills to protect estate assets from claims and to mitigate tax disadvantages, especially when beneficiaries are minors.

In a testamentary discretionary trust, the executor or trustee appointed by the will has discretion over how gifts are distributed. This discretion may involve deciding the amount, timing, recipients among specified beneficiaries, or the proportion each receives.

Typically, the terms of a testamentary discretionary trust are detailed within the will itself. This can make the will longer and more intricate.

Cheap Wills

Since a will is something that ideally won’t be used for a long time, many people aim to keep the process inexpensive. However, opting for cheap options can lead to poor outcomes and create challenges for heirs and executors. 

Homemade or store-bought will often have significant issues such as partial intestacies, errors, and gaps if assets are sold during the person’s lifetime. Some of these issues cannot be corrected. Often, these wills are prepared without understanding the critical issues mentioned above, resulting in ineffective estate distribution.

If the person drafting the will does not gather full information about asset ownership, there is a risk that it may not be done correctly.

Frequently Asked Questions

If all your assets are jointly owned, they typically pass to the surviving owner regardless of what your Will states. However, having a Will is still valuable in case you become the sole owner of those assets or if any are held as tenants in common, where each owner can manage their own share separately from others.

The cost of managing an estate without a Will (intestacy) is generally much higher than if there were a Will in place.

You should see a lawyer about a new Will if you are involved in matrimonial proceedings. The extent to which a divorce will affect a Will depends upon the state that you live in but in Queensland, both marriage and divorce will affect a Will.

https://www.qbmlawyers.com.au/estate-lawyers-gold-coast/who-should-be-the-executor-of-my-will/

If you would like to speak to us about wills and estate planning, please contact Peter Muller on 07 5574 0575 or peterm@qbmlaw.com.au.

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