We live in a world where so much information is available instantly at our fingertips “online”. The COVID-19 pandemic also fast-tracked the demand for online services as well as changing the landscape for preparing and signing documents electronically. However, when it comes to preparing and signing your Will, trading quality for cost-savings or convenience won’t necessarily serve you well. Online Wills have become increasingly popular, but buyer beware, what may seem like a cheap and easy alternative to an otherwise traditional service can be fraught with hidden dangers, explains Attwood Marshall Lawyers Legal Practice Director Jeff Garrett.
Online Wills have become more popular of recent times in the Australian market, being heavily marketed through sophisticated social media advertising, email marketing campaigns, and partnerships with charities and other organisations.
These products offer the promise of a cheap (or sometimes free!), legally valid document as an alternative to getting your Will drafted by a professional lawyer who is experienced in the area of Succession Law and estate planning.
But are online Wills all they’re cracked up to be?
The problem with online Wills, depending on which product is used, is that they are quite often unable to properly take into account each person’s unique overall circumstances, especially in relation to what assets someone owns, how those assets are held or controlled, and the very different definition of the “modern family” in our society today. Not only are people risking not getting proper advice on all aspects of their estate planning to ensure their Will and their wishes are honoured, but there is also the real risk that the “hard copy” of the document is not signed and witnessed correctly. In both scenarios, there is a risk that your estate will be embroiled in litigation through the Courts with potentially hundreds of thousands of dollars lost in legal fees.
When you properly weigh up the pros and cons, we think the overwhelming benefit is to have your Will done properly by an experienced estate planning lawyer!
Online Wills vs Professionally Drafted Wills
The purpose of your Will is to:
- minimise the risk of litigation and legal costs in your estate and maximise the benefit for your intended beneficiaries;
- provide clear directions to your executor to carry out your wishes and define their duties;
- protect your assets and beneficiaries from ‘predators and creditors’ to ensure your hard-won assets go to your loved ones or your chosen beneficiaries; and to
- ensure the orderly and most tax effective transfer and distribution of your assets to your beneficiaries after you die.
There is no cookie cutter approach or template that is going to be able to cater to everyone’s unique circumstances, no matter how simple the individual may believe their estate to be.
An online Will is a prefabricated questionnaire that will guide the user through a sequence of questions. Artificial intelligence sits behind the product to assist with structuring the Will. However, the product is limited in its ability to tackle all the variations that must be considered as part of the estate planning process.
In addition, what many people overlook is the fact the electronic version of the Will is not a finished product. To finalise the document, you must still print out the Will and sign it before witnesses according to the law of the state or territory in which the Will is signed. These formal requirements for signing and witnessing differ in some states and territories in order for the the Will to be valid or ‘legal’.
The disclaimer which appears on most online Will websites should be a red flag to anyone considering going down this path. Usually, a disclaimer like the following example is stated at the bottom of these types of websites:
“Disclaimer: XXX is a technology platform that allows you to create your own estate planning solutions using our forms and other information. XXX is not a law firm and does not provide legal, financial, taxation or other advice. If you are unsure whether our estate planning solutions are suitable for your personal circumstances, legal advice should be sought from a law firm,”
It is often the case that people assume they only have a modest estate and that their Will requires simple conditions to pass that estate to their family or next of kin (and/or a charity).
The opposite is usually the case, with many people underestimating the assets they own and the complexities of their family make-up.
What many people also do not understand is that a simple Will cannot deal with non-estate assets . It is only when you seek advice from an experienced estate planning lawyer that your estate plan will be looked at holistically and non-estate assets can be planned for, including putting in place any necessary binding death benefit nominations to deal with superannuation and life insurance benefits, or determining the need for additional protections such as creating a testamentary trust to protect assets and vulnerable beneficiaries.
In 2021, it was estimated that Australia had a combined total of 1.1 million self-managed superannuation fund members. With more and more Australians holding a significant proportion of wealth in self-managed superannuation funds, it is imperative to understand that these types of funds have a life of their own. There are very complicated issues with SMSFs and who inherits these assets after you die, particularly if you have surviving members or a corporate trustee in place. An online Will simply cannot deal with these issues!
Then there are the issues to consider around property and any wishes a Will-maker may have about creating a right of occupation for their surviving spouse or joint tenant to ensure that person is able to continue living in the property for a specified period of time, whilst ensuring upon the termination of that right of occupation, that share of the property will ultimately be inherited by the intended beneficiaries. These are complex matters that require well drafted conditions and effective estate plan structuring.
When an estate planning lawyer sits down with a client to take instructions for their Will, the lawyer must collect enough information to fully understand who’s who in the family, what assets the individual owns, if any assets are held in trust or jointly with another party, and what the intentions of the testator are. From this information an experienced estate planning lawyer can formulate a strategy to suit the individual and ensure their wishes can be fulfilled.
Are online Wills legally enforceable?
The initially drafted electronic version of an online Will is not a legally binding document. In order for the document to be legally binding, it must be printed, signed and witnessed properly.
This is often the stage where many people get it wrong and fail to execute the document in accordance with the law. An original document must be signed by the testator and two adult witnesses at the same time, using the same pen (in most states). Generally, the witnesses should not be a beneficiary or executor named in the Will. When not executed correctly, the document will be considered invalid.
If executed correctly, only then is an online Will considered legally binding.
What can go wrong?
If your online Will is one of the high percentage of Wills deemed invalid, here are the potential consequences that could follow:
- The rules of intestacy will apply: If a Will is deemed invalid, and there is no earlier Will to reference, then the rules of intestacy may apply. This means that your estate will be distributed according to a set formula set out in your state or territory’s Succession Law. Who inherits your assets may not necessarily be who you wanted to benefit from the estate.
- Interpretation and construction issues: If your Will is ambiguous and disputes arise about how to interpret the Will, the loved ones you leave behind may be forced to go to Court to obtain orders to interpret the Will. This can incur significant costs, draining the estate and stripping beneficiaries of what you had intended them to receive.
- Revert to a previous Will: If the Will is deemed invalid, a Court may refer to a previous Will. That Will may not reflect your most recent testamentary wishes.
- Higher risk of a Family Provision Application: When someone completes an online Will without seeking appropriate advice, they may fail to leave adequate provision for people who are eligible to make a claim on the estate. The cost of Family Provision Claims can be excessive, not to mention the emotional turmoil caused to loved ones who are left to fight it out in litigation to try to have the Will upheld. An online Will cannot give advice on whether you should make provision for someone who may very well be the black sheep of the family or estranged.
- Undue influence and issues around capacity: When someone completes an online Will, or even a do-it-yourself Will kit or homemade Will, there can be a significant risk of undue influence by third parties. After someone passes away, if their Will is challenged, there will be little evidence available to prove that the Will-maker had the testamentary capacity to make their Will, and were not unduly influence by other parties when making the Will. By contrast. when you get your Will drafted by an experienced estate planning lawyer, they are able to ensure vulnerable people are protected from third parties and that the Will-maker has the testamentary capacity to execute their Will. This is all documented in comprehensive file notes and can be referenced in the event anyone challenges the Will based on its validity after the Will-maker has passed away.
- Gifts failing: It is common for people who lack the legal knowledge of estate planning to try to gift assets in their Will that they do not own. Whether it is gifting a jointly owned asset, or non-estate assets such as superannuation, trust assets, or company assets, if someone includes these in an online Will, the gift will fail.
Cost savings is one of the biggest drawcards for people opting to do their Will online.
Most online Wills start from around $160 per person, which is approximately half of what you would spend getting a simple Will drafted by an experienced estate planning lawyer.
You may save a couple hundred dollars on your Will by doing it yourself online, but you do so by sacrificing legal advice about your unique situation and taking the risk that your Will may not be upheld.
When a Will is not drafted properly, it often leads to litigation. The costs associated with estate litigation when a Will gets contested or challenged can be in the tens of thousands, or even hundreds of thousands of dollars, in addition to the emotional toll litigation will take on those left behind. It is expected that litigation following the uptake of online Wills will continue to grow and more and more cases of Will contests and estate disputes will be the result.
Why take the risk for a modest upfront saving of only a couple hundred dollars?
Attwood Marshall Lawyers – helping you plan for the future and preserve your wishes
Many people have more wealth than they realise when you look at their estate as a whole, including superannuation and life insurance policies, shares, the family home, and other assets.
Don’t risk the wealth you have spent your lifetime building. There is no substitute for getting professional advice when it comes to estate planning to ensure your most basic legal affairs are in order and your family is protected long after you are gone.
Attwood Marshall Lawyers is an experienced estate planning law firm with one of Australia’s most prominent and accomplished Wills and Estates teams. We take a holistic approach to estate planning and ensure our clients get a personalised service that considers their unique circumstances and specific wishes.
For an estate planning review or to discuss our estate planning services contact our Wills and Estates Department Manager Donna Tolley directly on 07 5506 8241, mobile 0423 772 555 or email email@example.com
Conditions in Wills: Heiress blocked from $12 million fortune after failing to fulfil her late father’s wishes