‘It’s The Law’ – Put a plan in place
While many people in the Wimmera will have considered making a New Year’s resolution in past weeks, my suggestion is to start the year by ensuring you have an up-to-date will in place.
Wills are an incredibly important and useful tool that can save many headaches when you die.
A well-drafted will can also save the beneficiaries of your estate a great deal of money.
It is important that as soon as you accumulate significant assets, such as a house, you create a will to make sure your wishes are carried out when you die.
In addition to ensuring your assets go to whom you want, wills also make the task of administering your estate for your family or friends much easier.
If you die without a will in place – this is called intestacy – your assets will be distributed according to the Administration and Probate Act 1958 rather than in accordance with your wishes. Intestacy can also occur if your will is not valid or if your will only disposes of some of your property.
I have recently had a difficult matter caused by the use of a will kit. For this reason, I strongly recommend you have a lawyer draft your will for you.
There are a number of optional clauses that can be included.
If you have young children, you might wish to express your wishes as to whom you would like to care for your children in the event you and your partner both die.
If you have a wish for your body to be treated in a certain way following your death, this can also be included in your will. For example, you might include in your will a wish to be cremated and to have your ashes scattered at a particular location that is important to you.
For those with farm land, or other substantial assets, a will trust, otherwise known as a testamentary trust, should be considered during the will drafting process.
In addition to offering asset protection, a will trust can be an option that could save your beneficiaries thousands of dollars in tax each year.
A will trust offers an advantage over a typical inter vivos trust, a trust created while the individual is still alive, such as a discretionary family trust, because a will trust can provide the ability for your beneficiaries to split income to their children without suffering penalty tax.
Under a normal inter vivos discretionary trust, a child under the age of 18 pays penalty tax on income distributed to them above the amount of $416. Conversely, a minor child of a beneficiary under a will trust has access to the adult tax-free threshold of $18,200. When a beneficiary has several minor children, this benefit is multiplied by the number of children the beneficiary has.
Many people include a clause leaving a specific item, such as a piece of jewellery or a collectable firearm, to a particular person.
Well-drafted wills allow for future events. For example, a will can be drafted to allow for the death of an executor or beneficiary, the birth of further children and for the purchase and sale of different assets.
As there are several options available to you when drafting a will, speaking to a solicitor is important to ensure that your will matches your needs. Having your will stored in a law firm’s strong room is a great way of ensuring that it does not get lost, burned, stolen, tampered with or otherwise destroyed.