Smart Money Newsletter

Drawing up your will…

Sept 2002  - "Where there's a will there's a relative", page 2

Now you can complete your will, using the pro-forma supplied as a guide. (Download the PDF version here. Word 97 version here.) The various sections of the will mentioned below have been numbered on the pro-forma for easy reference.

1. Write your full name and address, including state and postcode.

2. Any previous will written by you becomes null and void; this new one takes its place. To avoid any confusion after your death, it is best to destroy any previous will once the new one is signed and witnessed.

3. You need to appoint an executor to take control and distribute your assets according to your wishes. You should request permission from those you wish to appoint as executor/s as it can be a time-consuming and even distressful task, particularly if young children are involved.
   
   If you are married, or in a relationship, it is usual to appoint your partner as executor. If you have adult children, you may choose to appoint one or two of them, or one of your children and your spouse/partner.
   
   If you have young children and wish to appoint a guardian for them, ensure that you seek the approval of your preferred guardian before completing your will; he or she may not wish to take on this task, no matter how close you are.
   
   If you appoint only one executor, ensure that lines are drawn through any blank spaces on the will. These lines will need to be ‘signed off’ by you and your witnesses when the completed will is signed.
   
   It may be advisable not to appoint as executor anyone who may have a potential conflict of interest, such as a business partner who might want to purchase your share of the business.

4. This is one of the most important sections, where you nominate your beneficiaries, that is, those who are to inherit your property and assets. If you leave a close family member out of your will, you should state your reason very clearly in your will. If you wish to leave specific items to particular children, section 4 might look like this:

   I wish to leave the following items, free from all charges and duties, as follows:

1. To my daughter, Claire Louise Smith – all of my jewelry
2. To my son, Sean Callum Smith – the car I own at the time of my death
3. To my son, Stuart Andrew Smith – the suitcase of money hidden in under the lemon tree in the backyard,
4. To my first grandchild, Paul Azzopardi – the collection of antique toys.

I leave the residue of my estate to my husband/partner Edward Smith.

5. You need to nominate a ‘replacement’ executor in case your partner does not live for 30 days after your death; again, discuss this with that person beforehand.

   If you wish to nominate different guardians for each or any of your children, you must state clearly the name of the guardian and the name of the child to be entrusted to that person.

6. Insert the name and address of the nominated guardian/s in section 5, stating the ages at which your children are to obtain their entitlement.

7. This section gives the executor the authority to pay the guardian/s of your children for their education, support and maintenance expenses until they reach their entitlement ages.

8. Complete this section only if you wish to donate any organs. If you do not, once again draw lines through this section and have it signed off by you and the witnesses when the completed will is signed.

9. Complete this part if you have particular wishes regarding the disposal of your remains, for example, cremation, burial, or your ashes buried, spread or scattered in a favourite location.

10. Once you have drawn up the will to your satisfaction, you must sign it in front of two (2) witnesses, who then must sign it in front of you and each other. Ensure that the date is inserted at the time of signing to prevent delays in executing the will (see case study below). It may be best if you do not use any beneficiaries as witnesses, then it cannot be argued that they had any influence on your decisions.

Your will is now completed.

Notes: Be aware of potential complications when leaving your assets. For example, the inheritor of your holiday house is liable for capital gains tax, whereas no tax is payable on the family home. Also, an inheritance may have the unwanted effect of causing a beneficiary’s Centrelink benefits to be cancelled.

For complicated wills where there are diverse business or personal interests, it may be advisable – to avoid future legal challenges - to have a solicitor draw up your will.

State and territory governments also have public trustees who will create and update wills for free (but you have to appoint the public trustee as executor of your will and it will take a percentage of your estate when you die).

If your will is straightforward, you could use the pro-forma or purchase a will pack, available from newsagents and post offices for less than $30.

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