8 common mistakes to avoid when drafting your Will

When preparing a Will, it is crucial that it is prepared in accordance with the relevant laws – in New South Wales, that law is the Succession Act 2006.  Otherwise, your Will is at risk of being an invalid document, or even capable of a number of different interpretations if not worded correctly, and therefore once you have passed away, your family may not be able to rely upon it as evidence of your wishes as to how you would like your Estate to be distributed.

Common mistakes found in Wills that are home-made, or even Wills that are made using a pre-filled document purchased online, are as follow.

Handwritten Will

Leaving your Estate to your spouse and your children, but not nominating any other beneficiaries

It is an unfortunate possibility that your spouse and your children will pass away at the same time as you.  And if you have not nominated any other beneficiaries in your Will, then you will be considered to have died intestate.

To avoid this, we always recommend that you nominate at least one more group of beneficiaries – whether it is your siblings, closest friends, or even a charity – so that there is at least one person or entity that can receive your Estate in the event that the main beneficiaries have passed away before, or at the same time as, you.

Appointing your spouse as your executor, but not nominating any other executors, or nominating the wrong executors

As per the above example, there is always a risk that your spouse will pass away at the same time as you.  Therefore you should have at least another person, or even 2 more people, nominated as your alternate executors.

The executor is responsible for the administration, distribution, and carrying out of your wishes as set out in your Will.  It is an important job, so you need to appoint someone who is able and willing to take on the role.

Keep in mind, too, that if your Estate will be gifted to your children once they turn a nominated age, then the executor usually also fulfils the role of trustee, and has the responsibility of looking after the assets held in trust for the children until they reach the nominated age.  So considering that the trust relationship may last for a significant period of time if your children are quite young at the time of your death, it may not be appropriate for you to, say, appoint your parents as the executors, because there is an increased risk that they will pass away before being able to fulfil their duties as trustee – it would be more appropriate for you to, say, appoint a sibling or friend as the executor.

Making specific gifts

If you want to leave a specific gift, such as your car or your home, to a beneficiary, then it is risky referring to the specific car (e.g. by detailing the make, model and registration plate) or the specific property (e.g. by its address).  If you no longer own that specific car or property at the time of your death, the gift would fail.  Rather, it is recommended that you describe such assets with reference to the type of asset it is – that is, “any motor vehicle I own at the time of my death” or “my principal place of residence at the time of my death”.

Not specifying a guardian for your children

Under the Guardianship of Infants Act 1916 (NSW), the surviving parent becomes the guardian, unless there are exceptional circumstances or orders in place (e.g. the deceased parent has sole custody).  If the other parent is no longer alive, or able to care for your children, and if you have not nominated a guardian in your Will, then the most suitable person to be the children’s guardian would need to apply to the Family Court for a parenting order under Part VII Division 5 of the Family Law Act 1975 (Cth), to grant them the right to care for the child.  Of course, making an application to the Court could be avoided by nominating a guardian in your Will.

What does your Estate consist of?

Jointly held assets may not be able to be gifted under your Will.  Take this scenario – you own a property with Family Member A as joint tenants, but you would like Family Member B to inherit your entire Estate.  You will be only able to gift to Family Member B those assets that are owned in your name outright, or owned with someone else but as tenants-in-common (in which case you have a distinct share in the ownership).  The rules around joint tenancy provide that upon the death of a joint tenant, the remaining joint tenants automatically become the owners of the property, despite what is provided for in your Will.  Therefore in the above scenario, Family Member A would become the sole owner of the property upon your death.

Not keeping your Will up to date

We always remind clients to revisit their Will every few years, to make sure that it remains current and relevant.  Have any named beneficiaries passed away since you drafted your Will?  Has there been a breakdown in relationships which may warrant appointing different beneficiaries?

The Will has not been signed and witnessed correctly

Not only must a Will be worded correctly, and cover all necessary points, but it must also be signed and witnessed correctly.  Too many times we see Wills that clients have prepared previously themselves, which have not been signed correctly, which have been witnessed by a named beneficiary, or which have been subsequently amended and “initialled” at the time of the amendment – the client believing that such an amendment is valid.

Where is the original Will?

Even if the Will has been drafted, signed and witnessed correctly, it’s not worth anything to anyone if no-one can find it after you pass away.  Ideally, the original Will should be kept in a fire-proof safe, and the location shared with your named executors – as well as some other trusted family members.  Shire Legal is able to hold its clients’ Wills and other important documents in its safe custody, at no charge.

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It is for the above reasons that it is so important to ensure that when drafting your Will, you obtain proper legal advice and have the Will prepared by a lawyer.  Otherwise you run the risk that it is not a valid document, and your Estate may not be gifted in accordance with your wishes.

If you have questions about planning your estate, contact the team at Shire Legal on 9526 3444 or info@shirelegal.com.au

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My relative has died without leaving a Will. What do I need to do?

It is a commonly held belief that if you die without a Will, your assets automatically transfer to the State.  However, this is incorrect.  It is only if you die without a Will and without any eligible relatives that your assets will transfer to the State.

Who are eligible relatives?

Eligible relatives are those who are entitled to distribution of the deceased person’s estate.  Just who is entitled depends on the deceased person’s family situation at the time of death.

(a) spouse, but no children – the spouse is entitled to the entire estate (section 111);

(b) spouse and children who are children of the deceased person and the spouse – the spouse is entitled to the entire estate (section 112);

(c) spouse and children who are not those of the spouse – the spouse is entitled to the deceased person’s personal effects, the “statutory legacy” (currently $350,000), and 1/2 of the remainder of the estate (section 113).  The children receive the balance of the estate (section 127);

Different rules apply where there are multiple spouses (see sections 122126).

(d) no spouse but children – the children are entitled to the whole of the estate (section 127) – if any child has died before the deceased person, leaving their own children, then those children are entitled to their parent’s share (section 127);

(e) no spouse and no children – the parents of the deceased person are entitled to the whole of the estate (section 128). If there is one surviving parent , the entitlement vests in the parent, and if both, it is shared equally;

(f) no spouse, no children and no parents – the brothers and sisters of the deceased person are entitled to the whole of the estate (section 129). If any brothers and sisters have died before the deceased person, leaving their own children, then allowance must be made in the division of the estate for the presumptive share of any such brother or sister;

(g) no spouse, no children, no parents, no brothers or sisters – the grandparents of the deceased person are entitled to the whole of the estate (section 130). If there is only one surviving grandparent, the entitlement vests in the grandparent, or if two or more survive the deceased person it vests in them equally; and

(h) no spouse, no children, no parents, no brothers or sisters, no grandparents – the brothers and sisters of each of the deceased person’s parents (the deceased persons aunts and uncles) are entitled to the whole of the estate (section 131). If there is only one surviving aunt or uncle of the deceased person’s the entitlement vests in the aunt or uncle. or if two or more survive the deceased person it vests in them equally.  If an aunt or uncle have died before the deceased person, leaving their own children who survived the deceased person, the child is entitled to the deceased parents presumptive share and if there are two or more children, they share equally.

If there are no eligible persons that fall within the above classes of relatives, then the estate will go to the State (section 136), unless someone who believes that they have an entitlement to the estate makes a claim.

By way of example, in 2015, a deceased man died without any living relatives, except for his ex-wife’s daughter (being the deceased’s ex-step-daughter).  The Court looked at the claimant’s financial circumstances (single mum, with 3 children, dependent on Centrelink payments) and decided to make provision for the ex-step-daughter’s future maintenance, education and advancement out of the estate by vesting the entire estate to her.

Wills

What is the process if there is no Will?

  1. Do a thorough search of the Deceased’s personal papers.  Is there a copy of a Will, even an old Will that may not necessarily be the most current Will?  Can you find any evidence that the Deceased ever instructed a solicitor, even if it was just for the purchase of property – evidence could include letters or invoices from the solicitor firm?  A thorough search will also include placing an advertisement in the Law Society Journal (a monthly periodical magazine distributed to (most) solicitors in New South Wales) asking if anyone knows the whereabouts of the Will.
  2. If no Will is located, then the closest living relative will need to apply to the Supreme Court for “Letters of Administration”, asking the Court to appoint the relative as the Administrator of the Estate, and authorising the relative to distribute the Estate in accordance with the list of “eligible relatives” as provided for in the Succession Act.
  3. The Application for Letters of Administration will need to be accompanied by an Affidavit of the Applicant for Administration (that is, the Administrator) noting the following:
  • the identity of all of the deceased’s eligible relatives, including a copy of all birth, marriage and death certificates;
  • details of the searches undertaken to locate a Will or other document evidencing the Deceased’s intentions regarding their Estate; and
  • a statement of the assets and liabilities of the Deceased.

The moral of the story?  Ensure that you have a valid Will so that your assets can be transferred to those family members and friends that you wish to provide for – not those family members that the State believes has an entitlement to your assets.

Contact Shire Legal if you have any questions about Wills or an entitlement under a deceased’s estate.

Does a disabled adult child have the right to claim against their parent’s estate?

In the recent case of Baird v Harris, the Supreme Court of New South Wales certainly thought so.

This case concerned the estate of a deceased man who had 2 adult children, one of whom suffers from Autistic Spectrum Disorder.  The deceased’s estate consisted of a property near Lake Macquarie, cash, a caravan, a motor vehicle, and a motor cycle, with a total value of $497,200.  In his Will, the deceased left the property and the motor vehicle to his partner, a cash legacy of $50,000 to each of his children, the caravan to his daughter, the motor cycle to his son, and the rest of the estate to his partner.

The Court held that:

  • the son was an “eligible person” as defined in section 57 of the Succession Act;8808432-law
  • looking at the son’s financial and material circumstances, adequate provision for his proper maintenance and advancement in life was not made by his deceased father;
  • consideration then needs to be given to the son’s financial position, the size and nature of the deceased father’s estate, the relationship between the son and his deceased father, as well as the relationship between the son and

“other persons who have legitimate claims upon the deceased’s bounty and the circumstances and needs of those other persons”.

  • the Court must made a determination “according to the feeling and judgment of the fair and reasonable man in the community, the spokesman of which is, and must be, the court itself”.
  • the son was incapable of adequately providing for himself, and it was likely that, because of his medical conditions, he will never be able to do so.
  • therefore, the son should receive additional provision by way of a lump sum which would “enable him to provide for exigencies of life and provide a buffer against future contingencies”.

As a result, the Court ordered that the son was entitled to the benefit of 40% of the net proceeds of sale of the deceased father’s property.

So what does this mean for parents who are preparing their Wills?

If you have children from an earlier relationship, it may not be enough to leave a “token gift” to your children, with the rest and residue of your estate going to your current partner, particularly if your children’s particular circumstances (as well as the size of your estate) would warrant a larger distribution being made to them.

Selling the deceased’s home prior to probate being granted

WillIt is not uncommon that the most significant asset of a Deceased’s Estate is their home.  It is also not uncommon that there are a number of beneficiaries entitled to a share of the Estate, which will of course require the Deceased’s home to be sold and the proceeds of the sale distributed between the beneficiaries.

However, the executors handling the Estate cannot effect any sale of real property (such as the family home) until the Supreme Court has granted probate (that is, until the Court has validated the Deceased’s Will, giving the executors the authority to distribute the assets to the beneficiaries in accordance with the Will).

Once probate is granted, the executor then has the power to transfer the title of the home from the Deceased to the new owner.

Obtaining probate can take some months, depending on the complexity and size of the Estate, but at the same time, executors are often keen to have the home put on the market as soon as possible.

So … can you apply for probate AND market the home at the same time?  YES.  

Whilst the title of the property remains in the Deceased’s name until probate is granted, the executors can commence marketing the sale of the property by preparing a Contract for Sale as follows:  

  • the executors are named on the front page of the Contract as the vendors selling the property;
  • the title search within the Contract still notes the Deceased as the registered proprietor;
  • a special condition provides that:
    – the purchaser acknowledges that the vendors are selling in their capacity as executors of the deceased registered proprietor’s Estate;
    – the sale is conditional on probate being granted within a specified period of time (typically 6 months from the date of exchange); and
     – settlement will take place 14 days after the vendors notify the purchasers that probate has been granted; and
  • at settlement, the executors will provide to the purchaser a Transmission Application (transferring title from the Deceased to the executors) and a Transfer (transferring title from the executors to the purchaser).

If, for whatever reason, the executors are unable to obtain probate within the specified period of time (for example, it may be a particularly complicated estate requiring specific evidence to be filed with the Court), then the purchasers would have the right to rescind (that is, pull out of) the Contract and obtain a refund of their deposit.

If you are the purchaser of a deceased estate – pay particular attention to the names on the front page of the Contract and the names on the title search within the Contract, as well as any special conditions stating that the property is conditional on a grant of probate.  You may be waiting some time until probate is granted and you can finally settle your purchase and move into the property.

Please contact the team at Shire Legal if you have any questions about buying or selling a deceased estate.

Who can see the Will?

WillClients often ask us who is entitled to see a copy of a Will (and obtain a copy of the Will) once the testator has passed away.

The answer can be found in section 54 of the Succession Act 2006 (NSW), which provides a list of categories of persons entitled to inspect the Will:

  • anyone named in the Will (whether or not they are named as a beneficiary)
  • anyone who is named or referred to in an earlier Will as a beneficiary (even if they are not named in the latest Will)
  • a parent, guardian, spouse, defacto partner or child of the deceased
  • a parent or guardian of any child referred to in the Will or who would be entitled to a share of the deceased’s estate if they had died intestate (ie without leaving a Will)
  • any person who would be entitled to a share of the estate if the deceased had died intestate
  • any person (including a creditor) who has or may have a claim at law or in equity against the estate
  • any attorney who held an enduring power of attorney given by the deceased
  • any person who had formal management of the deceased’s affairs under certain legislation

The NSW Registry of Births Deaths & Marriages created a Will Register whereby testators could register the details and whereabouts of their original Will.  However the Registry was discontinued in January 2013, although searches can still be made for Wills registered prior to that date.

Please contact the team at Shire Legal if you have any questions.