Common Misconceptions about Wills

25 Sep Common Misconceptions about Wills

This is a first of a series of articles on estate planning. Other articles will deal with issues concerning setting up trusts during one’s lifetime, asset protection, testamentary trusts and deceased estates. To begin with we highlight some commonly encountered misconceptions about wills.

‘I made a will years ago when I went overseas, it wouldn’t be valid anymore.’

Response

Wrong.  A will, whenever made, remains valid until it is revoked.  If you can’t remember where your will is or what it says, it is prudent to make a new one.  In any event, remember: wills should be looked at regularly to ensure that they really still embody your testamentary intentions.

‘I’m getting married to my de-facto partner next month.  My existing will leaves everything to her anyway, I don’t really need a new will.’

Response

Wrong again.  The act of getting married automatically revokes any will you have (unless it is made in contemplation of your marriage).  The law in effect forces people getting married to reconsider the disposition of their estates and deems any will which you may have at the time of your marriage to be revoked without your having to do anything more than to get married!

‘I had a will leaving my estate to my wife.  We are divorced now, do I need to make a new will?’

Response

Almost certainly.  When people divorce it is appropriate for them to reconsider completely their intentions for their estate.  A gift in a will in favour of a spouse will (usually) fail if the testator and the spouse divorce after the will is made.  That does not mean that the will is invalid but merely that the gift in favour of the ex-spouse will fail to take effect.  Most wills provide for what happens if a spouse dies – the gifts in favour of the substituted beneficiaries will take effect after divorce as though the divorced spouse had died first.  This may or may not be what you intend.  It is a good idea to make a new will when you get divorced.  If, for some reason or another you still wish to benefit you ex-spouse, you can of course do so.

‘If I die without a will, my estate will go to my children anyway.’

Response

Not necessarily.  The law sets out an order in which the estate is to be distributed if you die without a valid will.  In a relatively small estate the spouse or de-facto spouse has first claim.  If the estate is large (over $200,000.00) the spouse or de-facto partner does not automatically receive the whole estate.  Although a surviving spouse or de-facto partner can claim the family home towards their entitlement on intestacy, where there isn’t a matrimonial home, his or her share would be $200,000.00 plus half of the balance.  The remaining half would go to the deceased’s children.  Even taking into account the matrimonial home, the spouse would share the balance with the children.

‘If I make a will I can be absolutely certain that my beneficiaries will receive their entitlements as I provide in my will.  You can’t upset the clear provisions of a will.’

Response

Wrong again.  There are means by which a challenge can be made to the provisions set out in your will.  The most common way in which a will is upset is a claim under the Family Provision Act.  This is a statute that gives to certain classes of people the right to make claims against the deceased’s estate for provision, where the deceased failed to make adequate or proper provision for them.  In other words the Court can intervene to overthrow the wishes of the deceased and to redistribute the estate according to the principles set out in the Act.  It is prudent to take advice from your solicitor at the time of making your will about the possible consequences of the will on your family and those close to you so that the chances of a successful claim against the estate being made under the  Family Provision Act can be minimised.  A future article in this newsletter will deal more fully with claims under the Family Provision Act.

If you need further information or have any queries please contact Stephen Remington.