Wills and estate planning
Wills lawyers NSW
A will is the one document that decides who receives what you own, who administers your estate and who raises your children. If it is invalid, unclear or out of date, none of that is decided by you.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Bella Vista in the Norwest Business Park, acting for clients across New South Wales.
What your will actually does
A will takes effect on your death and deals with the assets you own in your own name at that time. It is not simply a list of who gets what. A properly drawn will also puts someone in charge, gives that person the powers they need, and closes off the arguments that otherwise land in the Supreme Court.
- Appoints your executor, the person with legal authority to collect your assets, pay your debts and distribute what is left
- Names your beneficiaries and sets out what each of them receives
- Makes specific gifts of particular items, amounts of money or property
- Nominates a guardian for children under 18
- Sets up trusts where a beneficiary should not receive their share outright
- Deals with what happens if a beneficiary dies before you do, which is the gap that causes most home-made wills to fail
- Records your wishes about burial, cremation and organ donation
If you die without a valid will you die intestate, and your estate is divided by a fixed statutory formula. The formula takes no account of what you would have wanted, of a blended family, of an estranged child, or of a promise you made to someone. Around half of Australian adults have no valid will. See how the intestacy rules divide an estate.
Formal requirements
What makes a will valid in New South Wales
A will must be in writing and signed by you, or signed by someone else at your direction and in your presence. Your signature must be made or acknowledged in the presence of two or more witnesses who are together at the same time, and those witnesses must then sign the will themselves. You must be 18 or over, and you must have testamentary capacity, meaning you understand what a will is, what you own in broad terms, and who has a claim on your generosity.
Two traps catch people who sign without advice. The first is witnessing. A person who witnesses your will should not be a beneficiary and should not be the spouse of a beneficiary, because a gift to a witness can fail. The second is capacity. Where age, illness or medication may later be raised as a ground of challenge, the circumstances of the signing need to be handled and recorded properly at the time, because it cannot be repaired afterwards.
Informal documents. The court has power to admit a document that does not meet the formal requirements, including notes, drafts and electronic documents, where it is satisfied the deceased intended it to operate as their will. That application is expensive, slow and far from certain. It is a rescue remedy, not a substitute for a signed will.
Can I write my own will or use a will kit?
You can. The difficulty is that a will is only ever read after the one person who could explain it has died, and words that seem plain to you may carry a settled legal meaning that is different from the one you intended. Nothing goes wrong until it does, and by then the cost of resolving it falls on the people you were trying to look after.
The common failures
- Gifts of assets that were sold or replaced years before death
- No substitute beneficiary, so a share falls into intestacy
- Superannuation and jointly held property given away when they were never the will maker’s to give
- Witnessing done incorrectly, or a beneficiary used as a witness
- Alterations, staples removed, pages reattached, or a document that shows signs of having been interfered with
- An executor appointed who is unwilling, unwell, overseas or in conflict with the beneficiaries
Fixing it afterwards
A defect in a will is resolved by an application to the Supreme Court, usually for a grant in solemn form, for rectification, or for the court to construe what the words mean. That is a contested proceeding, generally funded out of the estate, and it delays distribution by many months.
The professional cost of preparing a will properly is a small fraction of the cost of one such application. It is the cheapest insurance in estate planning.
Choosing your executor
Your executor applies for probate, gathers the assets, pays the debts and tax, defends any claim brought against the estate and distributes the balance. It is a legal role carrying personal liability, not an honour to be handed to the eldest child by default.
- Choose someone organised, financially literate and likely to outlive you
- Appoint at least one substitute in case your first choice cannot act
- Two executors who do not get on will stall the estate, because they generally have to act together
- An executor can also be a beneficiary, and usually is
- Ask the person first, and tell them where the original will is kept
- Consider whether a professional executor is appropriate where the estate is large, a business is involved or the family is in conflict
Complex wills
Testamentary discretionary trusts
A testamentary discretionary trust is created by your will and comes into existence on your death. Instead of a beneficiary receiving their inheritance outright, it is held in a trust that the beneficiary usually controls, with a class of people who can benefit from it. It is a well established planning structure in Australia, but it is not right for every estate and it adds cost and administration.
| Consideration | Straightforward will | Will with a testamentary trust |
|---|---|---|
| How the gift is received | Outright, in the beneficiary’s own name | Held on trust, with the beneficiary usually in control of it |
| Asset protection | The inheritance is exposed to the beneficiary’s own creditors and relationship risk | Can provide a measure of protection, depending on how the trust is structured and used |
| Income to children and grandchildren | Income earned by a minor from an inheritance is taxed at penalty rates | Distributions of trust income to minors are generally taxed at ordinary adult rates with the tax free threshold |
| Vulnerable beneficiaries | No control over how the money is spent once received | Capital can be preserved and applied for the beneficiary over time |
| Cost and administration | Lower to prepare, nothing to maintain | Higher to prepare, and the trust needs a tax return and ongoing administration |
Vulnerable and protected beneficiaries
Trusts are most useful where a beneficiary should not simply be handed a lump sum: a child or grandchild who is still young, a beneficiary with a disability, someone in bankruptcy or in a business exposed to risk, someone in an unstable relationship, or someone with an addiction or a gambling problem. Where a beneficiary has a severe disability, a special disability trust established under your will can also preserve their pension entitlements, and needs to be drafted to the specific rules that apply to those trusts.
We recommend you take accounting or taxation advice alongside our advice before deciding on a testamentary trust, so that the tax position and the cost of running the trust are understood before it is built into your will. Read more on whether a testamentary trust is right for you.
What your will does not control
This surprises most people, and it is the single most common reason an estate plan does not deliver what the will maker expected. Several of the largest assets a person owns are not dealt with by their will at all.
Superannuation and insurance held in super
Your superannuation is not automatically an estate asset. Unless you have a valid binding death benefit nomination directing it to your estate or to a dependant, the fund trustee decides who receives it. Life insurance held inside super follows the same path. Nominations lapse, so they need to be checked.
Property held as joint tenants
A property owned as joint tenants passes automatically to the surviving owner on death, regardless of what your will says. Property held as tenants in common passes under your will. Which one applies to your home is a question of what is on the title, and it should be checked rather than assumed.
Family trusts and company assets
Assets held in a family trust or a company are not owned by you personally and do not pass under your will. What matters is who controls the trust or the company after your death, which is governed by the trust deed, the constitution and the shareholding.
Jointly held accounts and life policies
Joint bank accounts generally pass to the surviving account holder. A life policy held outside super is paid to the nominated beneficiary. Both operate independently of the will and both can quietly defeat an intended equal division between children.
When to review or update your will
A will is a snapshot of your life on the day you sign it. Review it every three to five years as a matter of course, and always after a change in your circumstances.
- Marriage. Marrying generally revokes your existing will, unless the will was made in contemplation of that marriage. People who remarry and do not make a new will very often die intestate without knowing it.
- Divorce. A divorce order generally cancels gifts to your former spouse and their appointment as executor, but it does not cancel the whole will and it does not undo an appointment made in their favour in other documents. Separation alone changes nothing at all.
- A new relationship, or a blended family. Competing obligations to a new partner and to children from an earlier relationship are the most common source of estate litigation, and they need to be planned for deliberately.
- Birth of children or grandchildren, or a beneficiary reaching adulthood
- Death or illness of an executor, guardian or beneficiary
- Buying or selling significant assets, particularly where a specific gift in your will refers to an asset you no longer own
- Starting or selling a business, or changing a trust or company structure
- A beneficiary’s circumstances changing, such as bankruptcy, disability, addiction or a relationship breakdown
Do not write on your will. Crossing out a name, adding a note in the margin or attaching a page does not change your will and can raise questions about whether the whole document was interfered with. Changes are made by a new will, or by a formal codicil.
How we work
Preparing your will with us
Initial appointment
We take instructions about your family, your assets and how they are held, and what you want to achieve. We see you alone for part of the meeting where that is appropriate, so we can be satisfied the instructions are yours.
Advice on structure
We tell you what your will can and cannot control, where the risk of a family provision claim sits, whether a trust is warranted, and what needs to be dealt with outside the will such as superannuation nominations and how your property is held.
Drafting
We prepare the will along with a power of attorney and an appointment of enduring guardian where you want them, and send the drafts to you with an explanation in plain terms of what each clause does.
Signing and safe custody
You sign in our office with two independent witnesses. We hold the original in safe custody for a one off nominal fee and give you a copy, so that your executor knows exactly where the original is when it is needed.
Where you cannot attend our office because of illness, distance or hospital admission, we can make arrangements to see you elsewhere.
The rest of your estate plan
A will deals with what happens after you die. It does nothing while you are alive but unable to make decisions, and it is only part of the picture.
Power of attorney
Appoints someone to manage your legal and financial affairs. An enduring power continues to operate if you lose capacity. A general power does not.
Enduring guardianship
Appoints someone to make health, medical and lifestyle decisions for you if you cannot make them yourself. A separate document from a power of attorney, and it cannot be done by the same appointment.
Probate
The grant your executor obtains from the Supreme Court confirming the will and their authority to deal with the estate.
Letters of administration
The equivalent grant where there is no will, or no executor able to act, and the intestacy rules that then apply.
Contesting a will
Family provision claims and challenges to validity, and what an executor must do when a claim is made against the estate.
Terms explained
A plain English glossary of the words that appear in wills, grants and estate correspondence.
Family provision claims. An eligible person, which includes a spouse, a de facto partner, a child and certain other dependants, can apply for further provision from an estate. In New South Wales the application must generally be made within twelve months of the date of death, and the court can in some circumstances reach assets that have already left the estate. If you are considering a claim, or you are an executor facing one, contact us promptly because the time limit is short. More on contesting a will.
Common questions about wills
How much does a will cost?
We quote a fixed fee once we know what is involved, and we tell you the fee before any work starts. A straightforward will for a single person or a couple is at the lower end. A will involving a testamentary trust, a business, a blended family or a special disability trust costs more because it takes considerably more work. Holding your original will in safe custody is a one off nominal fee, with nothing payable after that.
Can I leave someone out of my will?
You can, but leaving an eligible person out does not prevent them making a family provision claim against your estate. What matters is how the exclusion is handled. We can advise on the ways of reducing the risk, on recording your reasons, and on whether restructuring how assets are held will help. Saying nothing about it is the worst outcome.
My spouse and I want the same will. Can we make one together?
You each need your own will. What is usually meant is mirror wills, where each of you leaves everything to the other and then to the children. That works for most couples. Where there are children from earlier relationships, mirror wills carry a real risk that the survivor later changes their will, and we will talk you through the options for dealing with that.
What happens to my will if I marry or divorce?
Marriage generally revokes your existing will unless it was made in contemplation of the marriage. Divorce generally cancels gifts to your former spouse and their appointment as your executor, but leaves the rest of the will standing. Separation without divorce changes nothing, which means a separated spouse can still inherit. Any of these events should trigger a new will.
Who should keep the original will?
The original is what your executor needs in order to obtain probate, and a will that cannot be found is presumed in some circumstances to have been destroyed with the intention of revoking it. We hold originals in safe custody for a one off nominal fee, and give you a copy for your records. Keep the copy with your papers and tell your executor where the original is.
Can I make a will for someone who has lost capacity?
Not directly, but the Supreme Court can authorise a statutory will for a person who lacks testamentary capacity, including a child or an adult affected by injury or illness. It is a specialised application and it needs to be brought during that person’s lifetime. If someone in your family is in that position, speak to us early.
Do I need a new will if I move to New South Wales from another state or overseas?
A will validly made elsewhere is usually recognised here, but the practical administration can become slow and expensive, particularly where assets are held in more than one country. If you hold assets overseas, tell us. We regularly deal with estates involving foreign assets and we will advise whether a separate will for that jurisdiction is appropriate.
What should I bring to the appointment?
Photo identification, a list of your assets and debts with a rough idea of values, details of how your home is held, recent superannuation and life insurance statements, the full names of your executors, guardians and beneficiaries, and any trust or company documents. A copy of your existing will if you have one. If you do not have all of it, come anyway and we will work through it with you.
Make your will with a solicitor who will still be here when it matters
We are a boutique firm in the Hills District acting for clients across Sydney and New South Wales. You deal with a principal of the firm, not a call centre, and we give you realistic advice in plain terms about what your will can and cannot do. If you have been meaning to get it done for years, one appointment will finish it.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Open Monday to Friday 9am to 5pm and contactable outside those hours. Suite 3.13, 33 Lexington Drive, Bella Vista NSW 2153.