Common mistakes to avoid when making a will in Australia

Making a Will is a critical step that needs to be done, and there are many ways mistakes can happen that will cost Aussies time and money. See the full list reviewed by legal experts.

Making a Will - a legal document setting out how your assets will be distributed when you die - is not just for people who own property or who have a lot of money.

In essence, a Will is a written indication of your testamentary intention.

You may wish to leave sentimental items like jewellery, photographs, letters, clothes and artworks to certain people in your family or friendship circle. Most of us will also have superannuation and life insurance that will need to be dealt with as part of the estate planning process.

A Will also enables you to provide for the people you care about, make a gift to charity, and appoint a person you trust (your executor) to carry out the instructions in your Will, such as funeral arrangements.

You may also indicate in your Will who you wish to be the guardian for your children,

following your death. Additionally, you may indicate your preference in respect of burial

or cremation.

Should you have young children, you may create a Testamentary Trust in your Will,

whereby your properties would be held in trust for your children by your Executor.

Anyone over 18 years old can make a Will, provided they also have the required mental capacity.

Here is what you need to know about making a Will, including the mistakes to avoid.

17 COMMON MISTAKES AND HOW TO AVOID THEM

1. Waiting too long/never making a Will

If you don’t make a Will, your estate (the total collection of your assets and liabilities at the time of death) could fall into the hands of people who are not your first choice. While the formula differs between States and Territories, typically the order of distribution where there is no Will is: spouse or de facto partner first, followed by children from the relationship, and then more distant descendants down as far as first cousins. If there is no one to take the estate, it will be distributed to the state government. It gets more complicated where there is a blended family.

2. Not letting the family know

Store your Will in a safe place and ensure you tell your family where to find it. Even better, hire a solicitor as well, who can retain the original copy. Always keep a copy where it is easily accessible by your executor. copy. Most solicitors retain the original of the Will and provide you a copy. The Original of the Will would remain with the solicitor in safe storage. A prudent approach would be to hand copies over to the Executor and immediate members of your family.

3. Not specifying funeral preferences

According to funeral provider Bare, making your funeral preferences known in your Will ensures your loved ones can honour your wishes to ‘go your own way’ – be it a specific funeral provider, or the type of memorial you’d like. You can also express a preference for burial or cremation. You may even indicate your preference as to any religious ceremonies or rites to be performed.

4. Not appointing guardians for kids

It is important to think about who you would want to care for and raise your children, including overseeing any money left to them, in the event of your death. The person you nominate will become the children’s guardian. Be sure to ask your proposed guardians first to be sure that they are prepared to act. If you don’t nominate a guardian, this could lead to a dispute about who takes responsibility for your children. However, do note that the Federal Circuit and Family Court of Australia has over-riding authority to decide on matters pertaining to children, inclusive of the party or parent in whose care such children shall remain.

5. Not nominating executors or back-up executors

The executor is responsible for distributing the assets to the beneficiaries in accordance with the Will. It is an essential role. You should choose a responsible person you trust as they will need to pay any debts and distribute your assets to the beneficiaries when the time comes. You can choose a friend or relative or appoint an independent trustee organisation. You should ideally nominate a back-up executor in case your first choice is unable to act. This will avoid delay and the risk of a dispute if the first named executor can’t act.

Wills can become very complex if not done properly. Picture: iStock

6. Not providing for dependants

If you intentionally want to leave someone out of your Will, you should always seek professional advice. Depending on who you are excluding, there is the risk that a challenge will be made to the Will. This will result in costs for the estate and delay in the administration of the estate. A lawyer may suggest preparing a supplementary statement to explain why you are not providing for the person. This generally won’t prevent a challenge, but it will explain the reasons for the decision, which would assist the Court should the matter be litigated.

7. Forgetting to update the Will

Don’t forget to update your Will if your circumstances change. These include big life events like getting married or divorced, having children or grandchildren, buying a house, or losing a loved one. A failure to update your Will may defeat your estate planning intentions.

8. Not having an original copy

Many people mistakenly think that a photocopy of a Will is sufficient to administer an estate. This is not necessarily the case. Generally, the executor needs the original document to legally administer your estate. Without the original, your executor may have trouble getting a grant of probate to manage your affairs. This reinforces the importance of storing your Will in a safe place and telling your executor where it is.

9. Not having a proper witness

For a Will to be valid, it must comply with legal requirements contained in legislation. According to Connor Hunter law firm, a will must be signed in the presence of two witnesses who are 18 years old or over and physically present at the time of signing the will. It is good practise to make sure that the witnesses are not referred to in the Will. A failure to comply with the required legal formalities may invalidate the Will and result in an intestacy.

10. Not signing the Will

If you don’t sign your Will, it is essentially worthless. In this scenario, your estate will be distributed as an intestacy, which may not be consistent with your intentions. The same generally applies if you don’t have the Will witnessed.

11. Making changes to the Will after signing

To amend an existing Will, you will need to do it properly by either signing a new Will or signing an amending document called a “codicil”. The same legal formalities that apply to the making of a Will apply to the making of a codicil. Handwritten changes to your Will are usually not effective to amend the Will.

12. Making a ‘Do It Yourself’ Will

A Will is a legal document and should be prepared with the assistance of a lawyer. There are many DIY Will or free or low-cost Will kit options available at the post-office or online. These non-lawyer options can go wrong and result in legal costs far in excess of the cost of doing the Will properly in the first place. According to funeral provider Bare, a high level of care is still required to make it a legally binding document.

13. Forgetting assets/not clarifying ownership

Most people remember tangible assets like a car, property, jewellery, and other valuables, but often Will-makers forget some of the financial assets. According to Connor Hunter law firm, many people forget digital assets like online bank accounts, cryptocurrencies, social media profiles, blogs, photos, and email accounts. Keeping a list of both the tangible and intangible assets will ensure you’re not accidentally leaving anything significant out of your Will.

14. Not dealing with superannuation

Will-makers also often ignore their superannuation, wrongly believing that they own it and are able to gift it in their Will. The reality is that we do not own our superannuation. It is held for us by the trustee of our super fund, who is ultimately responsible for paying out the balance at our death. Your superannuation member balance is not an estate asset unless the trustee of the fund decides to pay it the estate. You can direct the trustee by preparing a binding death benefit nomination. If you don’t, the trustee retains a discretion to decide where to pay it.

15. Forgetting assets or failing to clarify ownership

In an age of Cryptocurrency, NFTs and similar intangible assets such economic

rights over an artistic work (Copyright), it’s absolutely imperative that you include and

address all such significant assets in your Will so as to ensure that such assets done

remain forgotten and reach those who matter to you.

16. Ambiguous or vague language

The purpose of the Will is to indicate your testamentary intentions. If that message

is not communicated clearly or is vague, it can result significant legal expense to

determine what your testamentary intention was.

17. Failing to provide for contingencies

It’s always a good idea to identify a beneficiary who would inherit an asset, in the

event the primary beneficiary predeceases you or does not survive you by 30

days. Get professional advice on exploring how this may be structured in your Will.

Australians who have a Will are prepared for the future. Picture: Supplied

10 MOST COMMONLY ASKED QUESTIONS

1. What voids a Will in Australia?

According to August and Claire lawyers, a Will is deemed invalid unless it adheres to the following: it must be in writing – whether this is handwritten, typed, or printed. It must also be signed by the Will-maker or by someone directed by the Will-maker and in the presence of the Will-maker. The Will-maker’s signature (or person who is signing on behalf of the Will-maker at their direction) must be witnessed by two other people over the age of 18 at the same time, who also need to sign the Will. The Will-maker must be present to the signing of their Will by the two witnesses. The Will-maker must understand and approve that they are signing with the intention of creating a Will.

2. What are the most common grounds for contesting a Will?

A Will can generally be challenged in two ways. First, the validity of the Will itself can be challenged, usually on the basis that the Will-maker lacked the testamentary capacity to understand what they were doing or were pressured into making the Will in a particular way. This type of challenge is concerned with the validity if the Will itself, not its content. Secondly, a Will can be challenged on the basis that it doesn’t provide for a person to whom the Will-maker owed an obligation to provide (ie, partner and children). This is a challenge to the content of the Will not its validity and is often referred to as a ‘family provision claim’. To be successful in a family provision claim, it is necessary to demonstrate a financial need amidst other factors.

3. What cannot be gifted in a Will?

Kenney Legal advises that certain types of assets cannot be gifted in a Will. These assets include joint assets, discretionary trust assets, illegal assets, and assets that have specific beneficiary designations or are governed by contractual arrangements such as life insurance policies. As discussed previously, a superannuation balance is not automatically an estate asset.

4. Can you make a Will without a lawyer?

Yes. A DIY Will can be drafted using online templates or handwritten (known as a holographic Will). The document must meet the legal requirements for the document to be valid. There are risks in preparing your own Will.

5. When should I make a Will?

Anyone over 18 years old can make a Will, provided they also have the required mental capacity. The right age to write a Will is whatever age you’ve started acquiring assets of value or have dependents in your care.

If a Will is not correctly made, it can cost Australians alot of money with legal advice and even Court proceedings. Picture: Thinkstock

6. Can a beneficiary be an executor of a Will?

Yes, a beneficiary – someone who receives gifts or benefits under your Will – can be an executor of your estate, as long as they’re over 18 years old.

7. Can a beneficiary be overridden?

A beneficiary’s entitlement under a Will can only be altered by the agreement of the beneficiary (usually in the settlement of a Will dispute), or by court order at the end of court case dealing with a Will dispute. The executor alone cannot choose to unilaterally change a beneficiary’s entitlement. A binding death benefit nomination in relation to superannuation can direct the death benefit directly to a dependent and by-pass the Will.

8. What happens to debt?

In a Will, debts are generally paid out of the deceased’s estate before any assets are distributed to beneficiaries. If the estate has sufficient assets, the executor will use them to pay off debts. If the estate is insufficient, some debts may be forgiven, and creditors may need to write off the remaining debt. Beneficiaries generally don’t inherit the deceased’s debts unless they are jointly held or guaranteed by them.

9. Who can be my superannuation beneficiary?

A superannuation beneficiary can be a spouse, child, a financial dependent, or someone with whom you have an interdependent relationship.

10. Does a Will need to be lodged or submitted?

No, a Will in Australia does not need to be lodged or registered with any authority to be legally valid. Once a Will is properly signed and witnessed, it is considered a private document and should be kept in a safe place. The executor named in the Will is responsible for its safekeeping and for producing it when needed.

*The commentary in this story should not be taken as legal advice. It has been reviewed by Principal Lawyer Andrew Simpson who has written The Australian Guide to Wills + Estate Planning, and Malik Hameed, an Associate at Brydens Lawyers.

Originally published as Common mistakes to avoid when making a will in Australia