What is Estate Planning?
Estate planning is about planning who will receive your assets, when they will receive them and how they will receive them, after your death. Although a will is a central component of estate planning, other documents may be required to ensure that your wishes are implemented.
Your superannuation, the assets owned by a company and assets owned by a trust will not necessarily form part of your estate to pass to your beneficiaries in accordance with the terms of your will. Other documents may be required to ensure these assets are dealt with in accordance with your wishes.
Important things to consider when undertaking your estate planning include:
the needs of your beneficiaries, particularly if a beneficiary is disabled, vulnerable for any reason or at risk of bankruptcy, relationship breakdown, or serious illness;
tax effective ways of leaving your assets to particular people;
the age at which you wish your beneficiaries to inherit; and
ways in which to minimise the potential for disputes arising with respect to your will and to help your Executor to defend any claim against your estate, should it arise.
The use of discretionary testamentary trusts can achieve a number of objectives, including the timing of release of assets to beneficiaries and the minimisation of tax, ensuring your beneficiaries receive the maximum amount possible. Testamentary trusts can also make it more difficult for a beneficiary’s inheritance to be attacked, in the event of bankruptcy or relationship breakdown.
If you would like assistance with your Estate Planning
Wills for those who lack mental capacity
If a person lacks the required level of mental capacity to make a will (for example, as a result of an accident, Alzheimer’s disease or advanced dementia) and their existing will (or the result of laws of intestacy, where the person has not made a will) does not reflect what their wishes would be if they had capacity, then in New South Wales an application can be made to the Supreme Court to revoke a Will, make a Will, or make a new Will (a “Court-made Will"), for that person.
Contact us if you have an enquiry about Court-made Wills.
Wills for children (minors)
In New South Wales, if a child has assets (for example, as a result of a compensation claim), an application can be made to the Supreme Court for a Will to be made for them. Contact us if you have an enquiry about wills for children (minors).
Do I need a will?
If you don’t have a will, then you have lost the opportunity to:
appoint the person of your choice to manage and administer your estate;
choose who will receive your estate, which assets or how much they will receive and when they will receive them;
ensure your children receive their inheritance from you at a more responsible age than 18 years;
make it known who you would like to look after your children if you and the other parent have died;
choose who will manage your children’s inheritance until they reach the age you have chosen;
reduce the tax payable on the income produced by the assets you leave behind, for the benefit of your beneficiaries; and
increase the protection of your assets, for the benefit of your beneficiaries.
Can I make my own will?
The legislation and case law relating to wills and estates is extensive. Making a will is one of the most important things you can do for your family. Getting it right requires expertise and knowledge of the relevant legislation and case law (some of which is over 100 years old). If you don’t get it right, a dispute or tax liability may arise, causing unnecessary costs and delay in the administration of your estate.
Judges have made the following comments about “home-made” or "do-it-yourself" wills:
"The costs of satisfying the Court that [the necessary requirements] have been met may be an unnecessary burden on the will-maker's deceased estate...and the informality of expression that commonly characterises [such a will] may be productive of uncertainty as to the terms, or proper construction, of a…will, with a consequential, heightened risk of litigation following the death of the will-maker.”
“The disposition effected by the will is not complicated and no doubt the testator had clearly in mind what she intended to achieve. But the way the will is drafted is difficult, and the parties have been put to the trouble and expense of coming to the court seeking directions as to its proper interpretation. If the will had been drafted by a competent legal practitioner, this problem would not have arisen and the parties would have been spared a great deal of trouble and expense.”
With the number of people being diagnosed with dementia or Alzheimer’s disease increasing, it is becoming more common for people who are unhappy with a will to claim that the deceased person lacked the requisite mental capacity when they made their will. If a solicitor has made the will, then hopefully they have questioned the will-maker appropriately and can give evidence of mental capacity of the person when they made their will. If a person has made their own will, it may be more difficult to defend the will against claims that it is invalid for some reason.