Law Talks Episode: What you need to think about before you write your Will

Robyn: Good morning and welcome to another edition of law talks here on 4CRB.

And today we’re joined by Wills and Estates Senior Associate Xara Coassin from Attwood Marshall Lawyers to talk about what people often don’t realise they’ll need when they decide to do their will and broader estate plan.

Whether you’re planning for the future for the first time, or it’s just been a while since you last updated your documents, this episode covers some of the practical steps and key decisions to think about before your appointment.

Okay, Xara, let’s start with the basics. What is estate planning and why is it more than just writing a will?

Xara: Hi, Robyn. Thanks for having me back on the show. It’s always great chatting with you.

So estate planning is a comprehensive process. It goes beyond simply drafting a will. So your will deals with your assets once you’ve passed away. But what if you’re still alive and you lose capacity? It’s really important that you consider both contingencies at the time of writing your will and ensure your estate plan covers both death and also incapacity, especially as we’re all living longer these days.

Robyn: Yeah, that’s right. Is putting a will in place enough to cover someone when they die, or are there other documents they may need to consider as well?

Xara: No, it might not be, so a will will only cover assets that are part of your estate. So things like jointly held assets, superannuation or assets held in a family trust, they are not automatically covered by your will.

So, if you hold any of these assets, then there are additional documents or steps that you can take to deal with these assets, but they don’t automatically form part of your will.

That’s why when you come in for an estate planning appointment, your estate planner should run through your assets and liabilities and how you own these assets. If you have joint bank accounts or you own property with someone else, for example, a spouse or a friend, you cannot deal with these assets in your will and it will automatically pass to the co-joint owner by the rule of survivorship.

And the same applies to companies and trust assets. So, assets held in these entities cannot be gifted in your will. Instead, when it comes to a company, it’s the shareholding in the company that’s actually gifted provided that the shareholding is actually in your personal capacity and not held in a family trust or something like that, which is a common structure of many business owners.

And the same goes for trust assets. It’s the control of the trust and what’s written in the trust deed that’s actually what determines the fate of these assets, which may or may not be in line with your wishes.

Robyn: You mentioned loss of capacity earlier. Does the same logic apply here too? If a client has a personal enduring power of attorney, for example, does that cover them if they lose capacity?

Xara: No, it doesn’t. So depending on the way that you own your assets and especially if you run a business, you will need additional documents. For example, if you have a company then you would need a company power of attorney to allow someone to step in as the director, because a personal enduring power of attorney does not cover company assets.

Robyn: So, when someone books an estate planning appointment, what are some of the key decisions they might be surprised they need to make?

Xara: So, there’s a number of important decisions that clients need to consider when making a will or an enduring power of attorney.

They’ll need to consider who will be their executor trustees, attorneys under an enduring power of attorney document and possibly guardians for their minor children if they have minor children.

When considering who to appoint in these positions, it should really be someone that they trust, but also someone that’s good at managing money and can handle the role.

Other points to consider, whether all the executors or attorneys get along. Do they have similar views? How are they to act? For example, if you are appointing more than one, should they act jointly, severally, or by a majority? And factors that may influence this could be, for example, if any of the attorneys live overseas, then you may want to appoint them severally. That way, if one is overseas or even likes to holiday often, then they don’t need to rush back if they need to sign a document. This is of course, if you trust them all equally.

Part of the initial consultation is also understanding the family dynamics and discussing how these appointments will work in real life.

Robyn: And what should people bring to an appointment when they are getting their will and other estate planning documents drafted? And why is it so important to have the key information ready?

Xara: So, the more prepared you are, the more effective your appointment will be. So, we recommend bringing a list of your assets and liabilities and including how you own each of these assets.

We’ll also need to know who the key people are in your life, for example, details of your spouse, children, and anyone else you would like to benefit or even exclude.

Something that clients may actually be surprised about is that we also asked them about their previous relationships. And we do this so that we understand whether there’ll be someone that may challenge the estate.

It also helps to bring details of your superannuation fund and binding death benefit nominations that you’ve made and any family trust deeds or company documents, if they exist.

Having this information means we can give you accurate advice tailored to your situation and make sure your documents properly reflect your wishes.

Robyn: So, can you talk us through the roles people need to think about appointing like executors, guardians or powers of attorney? And what is important to consider when choosing the right one?

Xara: Absolutely. So, the main one would be who is going to be your executor. So your executor is the person who administers your estate after your death.

They carry out your instructions that are written in the will and you should really pick someone who is trustworthy, who is organised and ideally someone who communicates well with your beneficiaries and also gets along with the beneficiaries.

If you have young children, you may want to appoint a guardian, so that’s someone who’s going to care for them for their day-to-day life if both parents are to pass away.

Clients will also need to consider who they will choose as attorneys. For example, if they lose capacity, who will make these important financial and personal decisions for them when they can’t make those decisions for themselves.

So that might be where they will live in the future, for example.

When choosing people in these positions, you should be choosing people who are reliable, who understand your values and who can handle the responsibility. Sometimes it’s helpful to appoint more than one person. We also recommend including a backup appointment just in case that first option isn’t available.

Robyn: Many people think a will is something you write once and tick it off the list and forget about it. What do you say to that? How often should people be reviewing their estate plan?

Xara: We recommend reviewing your estate plan every three to five years or sooner if there’s a significant life change, for example, marriage, divorce, birth of a child or grandchildren or the death of someone named in your will, or even a change to your assets as well. That’s important.

Changes to superannuation laws and tax laws or trust laws also mean that it’s worth having another look, which is again why we suggest that three-to-five-year period.

Your wishes and circumstances evolve overtime, and so should your estate plan.

Robyn: What are some common misconceptions or mistakes people make when trying to do their estate planning without getting legal advice, like purchasing an online will or a DIY will kit?

Xara: So the biggest risk with DIY or online wills is that they often don’t reflect how your assets are actually held and they rarely deal with things like trusts or superannuation properly.

We regularly see situations where the will doesn’t match the person’s intentions or where it creates confusion due to poor wording causing delays and even disputes.

In some cases, the will isn’t even validly signed or witnessed, which means a court needs to then decide whether or not to permit it to probate or not.

So the old saying you get what you pay for rings true here, where you might think that you are saving a few hundred dollars by doing your own will or enduring power of attorney. When it comes to the time to rely on these documents, that is when you’ve passed away or you’ve lost capacity and it’s too late to fix, then this could cost your loved ones thousands of dollars via a court application to rectify your will or a QCAT application, for example, if you are missing the key terms of any enduring power of attorney documents that don’t allow you to act in certain situations.

A good estate planning lawyer should tailor your enduring power of attorney to the clients’ individual needs and carefully consider what key terms and conditions need to be added to their documents to allow them to deal with the assets of the principal.

If any of these key terms are missing, the attorney needs to then apply to QCAT to be permitted to do an act that’s not permitted by the document, and I often see this when reviewing clients’ documents, especially where they’ve printed the form out themselves and had a JP witness it without actually receiving any legal advice.

So, a proper estate plan gives you peace of mind that your wishes will be carried out and your loved ones won’t be left with a legal headache. It’s worth investing in advice to get it right the first time.

Robyn: Yeah, great advice as usual. Thanks for joining us today, Xara.

Xara: You’re very welcome. Thank you.

Robyn: You’ve been listening to law talks here on 4CRB, which you can hear every Friday morning from 9 o’clock.