March 3, 2013 by Todd
A Will is one of the most important documents you will ever make. When you die, it will tell the world where you want your money and property to go.
In recent times, more and more people have been using do-it-yourself will kits as opposed to seeing a lawyer. They are cheaper. But are they all they are made out to be, and do they really end up being cheaper in the long run?
In an article published in the Sydney Morning Herald, Lesley Parker reported that the NSW Trustee & Guardian (the old ‘Public Trustee’) is finding that DIY wills are often not being completed properly and that this ends up causing problems when the person who made the will dies. These problems may include:
1. People who use DIY wills often fill it out in a way which is unclear. Unfortunately, this can often lead to arguments about what the Will means, and possibly a result which the deceased person did not intend. Any saving from a DIY will can end up being lost many times over – ironically, in legal fees – as your loved ones argue.
2. People who use DIY wills often refer to property which the will cannot deal with, such as superannuation, trusts and assets held by the deceased person as ‘joint tenants’ with others. Beneficiaries may not receive what the deceased person wanted them to receive, and they may make a claim for family provision as a result. Any saving from a DIY will can end up being lost many times over – ironically, in legal fees – as your loved ones argue.
3. People who use DIY wills do not get advice about the tax consequences of their wills for their beneficiaries. For example, the deceased person may own two houses – the one they live in and an investment property – which both have a similar value. They leave one of the houses to one child and the other to their second child. Capital Gains Tax ends up being payable on the investment property, but not the house they lived in. The second child may end up with much less than the first child.
Alternatively, the investment property may have a mortgage while the first house does not. Unless the will specifically provides for the mortgage to be paid by the estate, the second child may end up with much less than the first child.
4. DIY wills are often not signed properly, do not appoint alternate executors and trustees and do not provide for what is to happen if the gifts under the will cannot occur for some reason (for example, one of the beneficiaries dies before the person who made the Will). An application for Letters of Administration may be necessary. Any saving from a DIY will ends up being lost many times over – ironically, in legal fees.
5. Sometimes, a person making a will does not want to include a potential beneficiary in their Will. They may give reasons in their Will, which can inflame the situation when the Will is read. The beneficiary may decide to make a claim for family provision, or ask that the Will not govern how your money and assets are to be divided because the reasons show that you did not have ‘capacity’.
6. The law about wills is different in each state. DIY will kits are often generic and not created having regard to the specific laws in New South Wales.
7. Finally, if you have a second spouse, children with more than one person, a child with a disability, or other complicated circumstances, DIY will kits are often inadequate to deal with your circumstances.
It is extremely important that you to get good advice about your Will which is relevant to your specific circumstances. Let our knowledge be your edge. Contact us now.
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