A will is an important document because a testator is giving a written direction to appoint a person or persons to make arrangements for their estate after they die. It sets out the testators wishes about who should be in charge and who should benefit. If the testator has young children, they can nominate a person as guardian to make decisions for the care of those children if required.
WHAT IS A TESTATOR?
A testator is a person who makes or has made a valid will and also refers to a person who dies leaving a will.
A testator must be of sound mind when making a will.
A will is the document through which a deceased person states how they want to dispose of their property.
A person who dies without having made a will is said to have died intestate.
WHAT IS PROBATE?
Once a person dies leaving a valid will – the will must be probated to allow the nominated executor to be appointed as the legal personal representative of the estate. In very small estates probate may not be required but generally you cannot release funds from bank accounts or transfer or sell any property of the deceased without having obtained a Grant of Probate.
Probate involves a ‘paper’ application to the Supreme Court Probate Registry to check the bona fides of the identity/death of the deceased person and whether the person claiming the right to be the legal personal representative is lawfully appointed under a valid will.
WHAT TO INCLUDE IN YOUR WILL?
For the purpose of drafting a will a person should nominate who they want for the following roles
- Executor & trustee-Most commonly this is one role but in more complicated circumstances there can be provision for the appointment of separate trustees once probate is obtained.
- An executor’s role is to manage the estate and obtain probate after the death of the testator. Once probate is obtained the trustee role operates and the trustee rope operates with the responsibility to ‘call in’ and distribute the estate according to the will.
- More than one person at a time can be appointed as executor and it may be prudent to appoint a substitute or substitutes to act if for some reason the first nominated executor cannot act or has died before the testator.
- Typically, married couples might usually appoint each other as their executor/trustee with a substitute or substitutes, in the event neither spouse survives the other to manage the estate (e.g., both die in car accident)
- When a couple is elderly it may be less practical for mutual appointment and it may be better to appoint younger family members depending on overall circumstances.
- Guardian if applicable: If the testator has minor children, they should nominate who would be the guardians if both parents have died while the children are under the age of 18 Years.
- Beneficiaries: The testator would outline the Beneficiaries of the estate. Typically, but not necessarily the beneficiaries might be the testator’s spouse and or their children. The testator can consider including a “safety net” default clause to distribute the residue of the estate if the intended beneficiaries do not survive the testator.
- Testamentary Trust: This is a trust created under the Will which used to be referred to more commonly by the phrase ‘last will & testament’.
- The most common form of testamentary trust: If the children are minors at the time of the testator’s death and have become the surviving beneficiaries but are under the age of 18 years this creates a responsibility for the executor acting now in a trustee role to manage the estate until the children become ‘of age’- Such a situation creates a testamentary trust
- There can be other testamentary trusts created under a will in more complicated estate arrangements.
- Specific Gifts: The testator may nominate specific gifts to individuals if they wish such as fixed amounts of money or a vehicle or special items such as jewellery or artworks, or digital rights.
- The testator does not need to give special gifts but can just distribute the whole of the testator’s estate among the chosen beneficiaries equally or unequally.
- Executor Powers: Lawyers frequently insert at the end of a will various clauses giving executor/trustee powers which may vary depending on the circumstances of the individual testator. Executor powers are intended either to supplement powers created by law or sometimes just to provide a written explanation in the body of the will for the executor acting for the estate. These can be discussed with the testator prior to finalising.
WHEN DO WILLS OPERATE?
Wills only operate after you die. A will has no effect before your death and an executor has no power over your estate until after your death.
If you need assistance with your financial (or health) matters during your life time you should consider completing the balance of available estate planning documents.
WHAT ARE ESTATE PLANNING DOCUMENTS?
These documents include not only your Will, but also the appointment of an enduring Power of Attorney and the appointment of an Enduring Guardian. You should consult your lawyer about these documents.
Some people choose to prepare an Advance Care directive regarding how they want their health managed towards end of life but this does not require the assistance of a lawyer.
IS IT NECESSARY FOR A PERSON TO UPDATE THEIR WILL?
Wills should be updated when you have a significant change in your life circumstances (marriage or divorce for instance) or when you have children. Or if your chosen executor no longer can act.
WHAT IS INTESTACY?
Intestacy: If you do not leave a will then the laws of intestacy apply as set out in the Succession Legislation.
WHY IS INTESTACY A PROBLEM?
Apart from any other consideration, a person dying without a will has not nominated anyone to manage their affairs or receive benefits from their estate, however minor. This creates something of a problem.
If a person is eligible to act for the deceased estate, they must prove their eligibility. Then then they must satisfy extensive requirements to prove who would be the eligible potential beneficiaries of the estate, which generally creates significant additional expense before the estate can be finalised.
Even when a person does not have very many assets, it is still very useful to put someone in charge to make arrangements for the funeral and to finalise bank accounts, credit cards and maybe sell a car or terminate a lease and utilities accounts [electricity, internet, mobile phone accounts, Facebook etc]. All these things may need to be done and especially these days with the importance of verification of identity and privacy requirements. It may become very hard to finalise even simple matters such as closing off accounts when there is no will left by the deceased person appointing an authorised person to act.
Preparing a will is in some ways just like taking out an insurance policy to protect your family and your assets.
If you need assistance to make your will or your estate planning documents please contact M Duncan & Associates and we will be happy to advise you on your specific situation.