Australian Supreme Court says DIY Wills are a curse

Australian Supreme Court says DIY Wills are a curse

Western Australian Supreme Court Master Craig Sanderson has publically stated in a 2014 judgment that “Homemade Wills are a curse,” and inevitably lead to protracted and expensive legal battles in family disputes involving substantial estates.

Master Sanderson said the legal issue around the proper determination of the deceased’s Will could have been avoided if he had “consulted a lawyer and signed off on a Will that reflected his wishes”.

Master Sanderson warned of the dangers of homemade Wills, saying there was no question that engaging a properly qualified and experienced lawyer to draft a Will was “money well spent”.

“But where, as here, the estate of the deceased is substantial, the Will is opaque and there is no agreement among the beneficiaries, the inevitable result is an expensive legal battle which is unlikely to satisfy everyone.”

This view is supported by Rod Genders, who is a senior Australian lawyer specialising in trusts, Wills and estate planning, accident compensation, probate and deceased estate administration in Adelaide and throughout South Australia. His boutique specialist law firm, which was founded on 1848, is one of the oldest and most respected in Australia.

Wills and Estate Planning Adelaide: Maintenance for Your Estate Plan

Maintenance for Your Estate Plan

The documents in your estate plan are excellent tools, and like the tools in your shed, they need to be kept sharp to maximise their effectiveness. Preventative Maintenance is essential. It’s the same for most important things in life.

Take your car for example. If you are doing what you should, you change your car’s oil every year or 10,000 kms.

You invest in maintenance and preventative care throughout the life of your vehicle, to keep it reliable and running well. You might belong to some form of roadside assistance club such as the RAA, to rescue you in times of trouble.

You will have automatic third-party insurance as part of the annual registration, and chances are that you probably have comprehensive insurance as well, just in case. That’s a multi-layered protection plan, to guard against bad things happening to you & others you care about because of your car.

Wills and Estate Planning Adelaide: What Is A Will?

Genders and Partners logo

Wills and Estate Planning Adelaide: Star Trek and Estate Planning

Wills-Estate-Planning-slider

Of all the countries in the world, Australia ranks in the top 5 with longest lifespans (17 places ahead of the UK and 33 places ahead of the USA).  Each year, our average life expectancy continues to increase.

And yet, more than half of adult Australians do not have a legal Will, and even fewer have an integrated estate plan.

Life used to be simpler. People worked for the same employer for their entire career. They had government-guaranteed pensions. Medical expenses were manageable. Divorce was rare and remarriages rarer still.  25 years ago, when my legal career began, I can clearly recall the expression “broken home” being used as an excuse for various misconduct. Most people were not invested in the stock market.

But, the trade-off was that although life was simpler, it was also significantly shorter. Retirement didn’t last long, so people didn’t worry as much about having sufficient savings to last a lifetime. Long periods of incapacity were unusual.  You worked, then you died.

When the Australian Government began the aged pension in the 1920’s, they set the age-of-eligibility at 65 for men.  At that time, the average life expectancy for men was only 63, so the Government did not expect to have to pay out much for the pension, nor medical treatment, aged care or publically assisted accommodation.

Genders and Partners | Wills and Estate Planning - Lawyer Adelaide

Wills and Estate Planning Adelaide: Is it Time for The Talk?

Challenging Estate Planning Conversations

Is it Time for The Talk?

In family life there are a number of “Talks” which parents need to have with their children. Remember “Where do babies come from?”

Well, much later in life, older parents need to talk to their adult children about Wills and powers-of-attorney, elder care and end-of-life decisions.

In my practice as a lawyer specialising in estate planning, I have repeatedly noticed that my older clients are generally much more willing to discuss estate planning issues than their adult children.

I have speculated as to the reasons for this, and have come up with a list of possible explanations:

  • Fear of being seen as interfering in their parents’ affairs;
  • Concern at how their interest in their parents’ estates may be interpreted by others;
  • Discomfort at confronting the mortality of their parents;
  • A recognition that parents are getting older, and perhaps their best health is behind them;
  • A perception of “passing the baton” from one generation to the next.

Accommodation after Death?

This isn’t the beginning of a joke about the person who died and went to Heaven… It’s a serious estate planning question about how a family-member might continue to live in a property after the owner has died.  This question frequently arises (where a spouse, child or sibling was living with the deceased), and it is often the cause of unnecessary concern & anxiety.

Following your death, family-members may have a challenge in finding new accommodation quickly; they may not have the finances available and if the house is sold quickly, could be rendered homeless.

Is there some way to delay the sale-after-death for a reasonable period to allow the family-member some time to adjust to his new circumstances; to cope with the grief of losing you, and to build-up finances towards a deposit for his own property or to find a suitable home to rent and move out?

Yes – there IS a way!  In your Will, you can create a testamentary trust leaving the house on trust, to be used by the intended person (let’s call that person the Tenant), with a clause in your Will saying that the Tenant can stay in the property for the agreed period.

The trustees of the house won’t be allowed to sell it without the Tenant’s consent.  It is not theirs to sell.

Your Will can contain all sorts of additional conditions, such as whether the Tenant will be obliged to insure the house correctly, pay rent and keep it in good repair.

There may be an agreement that the Tenant can move to a replacement property under the same terms, say if the original property becomes too much for the Tenant to mange and maintain. If a replacement house of less value is purchased the spare funds will go into the deceased’s residuary estate.

This, of course, only works if the property can be passed on this way in a Will and the house isn’t required to be sold immediately for cash for a particular reason, perhaps to clear a tax bill or to pay a specific monetary legacy.

Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

Death Benefits … Who Benefits? Do you know who will receive the benefits from your life insurance policy and superannuation fund?

You need to decide who should benefit from your assets or for whom you wish to provide financially.

You should be clear on how you want your beneficiaries to benefit – do you want them to inherit an asset, an income or cash?

Your Will cannot dictate who inherits the benefits from your life assurance policy.  You might think you can revoke the beneficiaries you have nominated on a life insurance policy by simply nominating other beneficiaries in your Will. But your loved ones might be in for a nasty surprise, when they find out (after your death) that you were wrong.

The life insurer has a contractual relationship with you as the policyholder, and they will only pay out the benefits to the beneficiaries nominated in your insurance contract, regardless of whether your Will states otherwise.

If you want to change your life insurance policy beneficiaries, you need to do this directly with your life insurance company.  You can’t do it in your Will.

Similarly, when it comes to your superannuation fund benefit, the discretion to distribute your death benefit lies with the trustees of the super fund, and they might not necessarily follow your wishes as stated on your beneficiary nomination form.  It is a complex area of the law, which may well have changed since you started with your super fund.

Death & taxes, illness & share-market corrections may be unavoidable … but they don’t have to ruin your family or your business.  Make the effort to protect the people you really care about.  Call Genders & Partners to create an integrated estate plan and avoid questions regarding death benefits in Adelaide and other areas in South Australia. And do it NOW … before it is too late.

Wills and Estate Planning Adelaide: Baby Boomers – Are You Bequeathing Disaster to Your Family

Baby Boomers were born between 1945 and 1965.  As a segment of Australian society we represent a BIG chunk of our national population, and account for a massive percentage of the nation’s private net-worth.

According to the Australian Bureau of Statistics people aged 65 years and over made up 13% of Australia’s population at 30 June 2007. This proportion is projected to increase to 25% in 2056 and to 28% in 2101.

As we prepare to transition into retirement & beyond, we are about to witness the greatest transfer of wealth ever in Australia’s history.

However 2010 Australian research commissioned by the Salvation Army from Roy Morgan Research reveals that nearly two thirds of the adult Australian population does not have a Will. The research also shows 40% of Australians aged 25+ have experienced or know someone who has experienced family conflict as a result of a family member not leaving a Will.

Dying without any Will is called intestacy.  When that happens, the government of the State where you die will determine what will happen to your assets.  This can lead to unintended people (or even the government) gaining ownership of your hard-earned assets.

Many Australians have no idea what happens to their assets after they die, and sadly many rely on the misguided notion that a Do it Yourself Will is sufficient to protect their family and assets.