There are various ‘Will Kits’ available online – most are cheap or ‘free’ and all you need to do is download them and ‘fill in the blanks’. Many websites boast that you can prepare your Will ‘without spending hundreds of dollars on legal fees’.
Simple, right? Not really.
Generating an online Will may seem easy, but the ‘hundreds of dollars’ that you might save will never make up for some of the possible pitfalls in preparing a Will without sound legal advice.
When you generate your own online Will, you don’t meet personally with the drafter of the Will. You don’t have the opportunity to discuss your family and your circumstances, and a lawyer does not have the opportunity to identify issues unique to you, that could otherwise be addressed with careful planning.
The following are some of the important considerations that an experienced lawyer will address, that a Will-Kit may not.
Your lawyer will consider other aspects of your planning
A lawyer will take a holistic approach and consider other aspects relevant to your plans. Not only is it important to plan how your assets are distributed when you die, but you may also need to provide for contingencies such as appointing an attorney if you become incapacitated and are unable to manage your financial and personal affairs.
Typically, a lawyer will also consider how your assets are held – whether that is jointly or individually – as this can determine how and to whom those assets may be left. For example, when assets are held jointly with another person, the surviving person receives the deceased person’s share when he or she dies. A contrary direction in a Will to leave that share to somebody other than the joint tenant will not override this legal principle. A lawyer will advise whether it is in your interests to sever the tenancy which will then enable you to leave your share to whomever you wish.
Your lawyer may also discuss your superannuation and death benefits. In most cases, your benefits will be paid directly to a superannuation dependant either at the discretion of the trustee or in accordance with a death benefit nomination.
Different categories of beneficiaries are taxed differently under taxation laws and your lawyer or a financial professional can advise on these tax implications so you can make an informed decision.
Preventing a gift from failing
A common problem with Wills is the risk that a gift to a beneficiary may fail. ‘Ademption’ occurs when specifically named property in a Will no longer exists at the time the Will-maker dies. Consequently, the intended beneficiary of that gift may lose out altogether. The ademption of a gift can have a significant impact on the value of assets received by a beneficiary, particularly where the asset is considerable.
Protecting your assets and tax planning
Your lawyer can advise on how to best structure your Will to help protect your assets from distribution to an unintended beneficiary (such as a child’s estranged partner or the creditors of a bankrupt beneficiary).
A testamentary discretionary trust may be recommended. This is a trust created in your Will that comes into effect after you die. The trust is administered by a pre-appointed trustee who determines how and when estate assets are managed and distributed.
If properly managed, the flexibility of a discretionary trust can enable beneficiaries to access favourable taxation treatment with respect to their inheritance and provide protection for vulnerable beneficiaries. With careful planning, the timing of transferring estate assets may also postpone or minimise capital gains tax liabilities. In such cases, we recommend working with a taxation professional.
Guarding against family provision claims
A successful family provision claim may result in the terms of your Will (despite your intentions) being amended to provide for an ‘eligible person’.
Family provision rules vary between jurisdictions, however, an eligible person generally includes a current or former spouse or de facto partner, a biological, adopted or stepchild of any age, and certain dependent members of the deceased’s household. Generally, the applicant must show that he or she was not adequately provided for by the deceased’s Will, however, each case is different, and a number of factors must be considered.
Whilst warranted in some circumstances, such claims are usually an unwelcome interruption and will result in additional time, delay and cost in finalising the estate.
Your lawyer can help identify potential claimants under the family provision rules relevant to your jurisdiction and, if necessary, advise on how to reduce the likelihood of such a claim.
Conclusion
Yes, you can prepare a Will online, however, there is a risk that it will not be tailored to your unique circumstances, may not achieve exactly what you want, and may not take advantage of structures to protect assets and save tax. Having your Will prepared by a lawyer is a smart move. Your lawyer will ensure that your Will is valid and correctly signed and will usually provide a friendly reminder to review it when your circumstances change.
This information is of a general nature only and we recommend you obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, please contact us on 03 5021 4276 or email [email protected].