Estate planning is not usually at the top of most people’s “things to do” list. However, creating a plan for what happens to your assets after your death is one of the most important steps you can take.
A carefully prepared estate plan can provide clarity for your loved ones, reduce the risk of disputes and help ensure your assets are distributed according to your wishes.
Without clear instructions, family members may face unnecessary stress, delays and legal costs when administering your estate. Taking the time to plan ahead can help protect the assets you have spent a lifetime building.
To help you get started, we have answered some of the most common questions people ask when considering estate planning.
What Is a Last Will and Testament?
A Last Will and Testament, commonly known as a Will, is a legal document that explains how you want your assets distributed after your death.
A Will can include instructions about:
- Who should receive your assets.
- Who should manage your estate.
- Who should act as your executor.
- Guardianship arrangements for minor children.
- Your wishes regarding personal belongings.
A Will only operates after your death. It is different from a Power of Attorney, which allows another person or organisation to manage your financial and legal affairs while you are alive.
You can find further information about Wills, estates and planning ahead through NSW Trustee and Guardian.
Do I Need a Will If I Do Not Own Many Assets?
Yes. Having a valid Will is important regardless of the size of your estate.
A Will allows you to clearly communicate your wishes and gives your family guidance about how you want your assets distributed.
Even smaller estates can become involved in disputes. Legal disagreements between potential beneficiaries can quickly reduce the value of an estate through legal costs and delays.
| Without a Will | With a Will |
|---|---|
| Your assets may be distributed according to intestacy laws rather than your personal wishes. | You can provide instructions about who receives your assets. |
| Family members may face uncertainty about your intentions. | Your wishes are clearly documented. |
| Disputes may arise between potential beneficiaries. | A properly prepared Will may reduce the risk of conflict. |
When Should I Update My Will?
A Will does not usually expire. However, you should review it regularly to ensure it still reflects your circumstances and wishes.
Major life changes are often a good time to review your estate plan, including:
- Getting married.
- Separating or divorcing.
- The birth of children or grandchildren.
- Buying or selling property.
- Receiving a significant inheritance.
- Changes to your financial circumstances.
It is important to obtain legal advice before making changes to your Will. Even small amendments can affect how your estate is distributed. Any changes must also follow the correct legal requirements to remain valid.
In NSW, Wills are governed by legislation including the Succession Act 2006 (NSW).
Who Must I Leave My Assets To?
Many people believe they can leave their assets to anyone they choose. While a person generally has significant freedom when preparing a Will, there are important factors to consider.
You should consider whether you have:
- Dependent children.
- A spouse or partner.
- Other family members who rely on you financially.
- A blended family situation.
- Estranged family members who may challenge your estate.
Failing to properly consider these circumstances may increase the risk of a family provision claim or other estate dispute after your death.
Seeking advice from an estate planning lawyer can help you understand potential risks and prepare your Will accordingly.
Who Should I Appoint as My Executor?
Your executor is responsible for managing your estate after your death. Choosing the right person is an important part of estate planning.
An executor may need to:
- Arrange your funeral.
- Identify and protect estate assets.
- Apply for probate where required.
- Pay outstanding debts.
- Distribute assets to beneficiaries.
- Manage disputes involving the estate.
Many people appoint a close friend or family member. However, you should consider whether the person has the time, ability and willingness to manage these responsibilities.
| Executor Option | Potential Considerations |
|---|---|
| Family member or friend | May understand your wishes but could face challenges managing conflicts between beneficiaries. |
| Professional or independent executor | Can provide an impartial approach but professional fees may apply. |
If there is likely to be conflict between beneficiaries, appointing an independent executor may help ensure the estate administration process remains fair and impartial.
The best choice depends on your personal circumstances, the complexity of your estate and the relationships between potential beneficiaries.
What Happens If I Die Without a Will?
If you die without a valid Will, you are considered to have died intestate.
When this occurs, your estate is distributed according to state intestacy laws. This means your assets may not pass to the people you would have chosen.
In NSW, intestacy rules are set out under the Succession Act 2006 (NSW).
Can a Will Be Challenged After Death?
Yes. Even a carefully prepared Will may be challenged in certain circumstances.
A person may challenge a Will if they believe they were not adequately provided for, particularly where they were a dependent or someone with a close relationship to the deceased.
A court may also examine whether the person making the Will had the necessary mental capacity at the time they signed the document.
When assessing whether someone had testamentary capacity, factors may include whether they understood:
- That they were making a Will.
- The assets they owned.
- The people who may have a claim on their estate.
- The consequences of distributing their assets in a particular way.
A properly prepared and regularly updated Will can help reduce the likelihood of disputes and provide stronger evidence of your intentions.
Why Is Professional Estate Planning Advice Important?
A poorly prepared Will can create significant financial and emotional stress for your family.
Professional estate planning advice can help you:
- Create a legally valid Will.
- Choose an appropriate executor.
- Identify potential risks of disputes.
- Consider complex family circumstances.
- Ensure your documents reflect your current wishes.
Estate planning is about more than deciding who receives your assets. It is about creating certainty and protecting your loved ones during a difficult time.
Speak With an Estate Planning Lawyer
If you need advice about preparing or updating your Will, our experienced estate planning lawyers can help you understand your options and create an estate plan suited to your circumstances.
If you or someone you know wants more information or needs help or advice, please contact Cunningham & Adam Solicitors on (02) 4987 3344 or email [email protected].