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Legal Tip 66: Why should I have a will?

Discussion in 'Legal Issues' started by Terry_w, 23rd Aug, 2015.

  1. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Common question. People don’t see the value as they think “it I die it will all go to my spouse anyway”.

    But there are many reasons why it won’t go to your spouse. What if the spouse dies first, what if the spouse dies with you in an accident. What if both in an accident and spouse remains alive in a coma for 30 days after your death and then dies - what if you are in the coma.

    Imagine you have no will and everything goes to the spouse absolutely. She or He gets married and later dies leaving everything to the new husband. What if she had no will - intestacy laws would give the husband a large chunk.

    What if the spouse inherits a lot of money, perhaps from insurance via super. The spouse later becomes bankrupt losing all the kids inheritances.

    Tax issues arise as well as without a will there is no testamentary trust. Income from large insurance payouts will be taxed in the spouse’s hands wasting tax saving opportunities - note there is the ability for a post death testamentary trust to be set up but these are very restrictive and will result in less of a tax benefit and less of an asset protection benefit.

    Super that comes into an estate should be segregated into a superannuation proceeds trust otherwise there could be tax payable.

    A non resident beneficiary could inherit property which could mean a CGT is triggered. This may be avoided with a will.

    Disposal of the body - there may be no instructions.

    Choice of Executor is also not possible if you don’t have a will. Someone, usually a family member will need to apply to the court to be appointed administrator of the estate. This can lead to disputes over who will take the role and it could lead to 2 family members contesting it in court.

    Control - you might have a $2mil estate. Do you want your children to get access to this on their 18th birthday (or earlier, see legal tip 1)?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Another reason is to leave instructions re personal items such as photos

    Without a will who will take all your personal possessions that are not worth any monetary value but may have sentimental value. Intestacy rules will apply here, but generally whoever grabs them first will take them. This can lead to family disputes and costly litigation and/or broken relationships.
     
  3. EN710

    EN710 Well-Known Member

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    Thank you Terry.

    Have been thinking about Will for a while (thought in no hurry).
    1. How much does it usually cost to prepare one professionally?
    2. How often should we update the will?
    3. How does it works if you want to specify someone to take care of your pets etc?
    4. What's the implications if you want to leave some portions to family located overseas?
     
  4. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Hi En

    I charge around $1650 for a will with comprehensive legal advice.

    Depends on how the will is structured and the siutation. If you are leaving specific gifts then you need to update it each time you dispose of those gifts. Otherwise you need to consider it on major events such as deaths, divorces, bankruptcy, births etc.

    Pets are property and can be left to someone

    Tax implications mainly.
     
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  5. KateAshmor

    KateAshmor Victorian conveyancing lawyer Business Member

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    And in case anyone is wondering: do-it-yourself will kits from the newsagent are limited in scope and can easily create ambiguity, making them vulnerable to being challenged.

    There is no point getting a will made unless it’s enforceable when it really matters.
     
  6. legallyblonde

    legallyblonde Well-Known Member

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    Oh this is bring back the law school memories... "What if you died in an accident at the same time?" From memory it is presumed the oldest person died first?
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    If 2 people died in an accident together, and there was no evidence of who died first then it would be presumed the older died before the younger.

    that is why you should always marry someone older than you.
     
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