A valid Will determines how your estate is dealt with after you die. Your Will can appoint an appropriate family member, trusted friend or professional to administer your estate (your executor), nominate guardians for young children, determine who will receive your assets and give direction for specific funeral and burial arrangements.
Without a Will, somebody you would not wish to involve may have to deal with your estate, and the distribution of your assets will be pre-determined by legislation. This is likely to be more stressful, time consuming, complex and costly for your loved ones.
No matter what your age, health status or financial circumstances, dying intestate (without a Will) is likely to create additional stress for your family and may prevent you from having a final say in how your life earnings should be distributed.
What happens to your estate when you die without a Will?
If you die intestate your assets are distributed according to pre-determined formulae set by legislation in the relevant jurisdiction, being in Western Australia the Administration Act 1903. Essentially, the rules provide for a specific order of distribution to the deceased person’s next of kin, depending on each situation.
This distribution is referred to as the rules of intestacy or statutory orders and each jurisdiction has a different process. Importantly, these rules may not consider the wishes of a deceased person nor his or her unique circumstances.
What can go wrong?
The formula set out in legislation attempts to reflect society’s expectations as to who should benefit from a person’s estate. The problem is however, we all know that most families are not ‘standard’ – many are blended, and there is often unequal distribution of personal wealth between family members.
Dying intestate therefore may not guarantee a fair or intentional estate distribution (according to the deceased) and may result in undesired consequences, such as:
- family members and/or those important to the deceased completely missing out from an inheritance;
- a disproportionate distribution of assets between family members or the possibility of leaving out more needy beneficiaries;
- a distribution to a family member with whom the deceased shared no significant or meaningful relationship.
More convincing reasons to make a Will
An executor is the legal personal representative appointed under a Will to oversee administration of the estate. An administrator has a similar role however is appointed by the Court when a person dies intestate.
Generally, the next of kin may apply for this role however this may not be desirable in some circumstances. There are many dynamics within families and sometimes it may be preferable for a third party to be involved in the administration, removing the emotional factor and bringing more impartiality into the role. Only through a Will can a person nominate a specific executor of his or her estate.
Finally, the failure to make a Will may forego opportunities for estate assets to be treated more tax effectively or to protect vulnerable beneficiaries. This is usually affected through a testamentary trust, which is a trust contained in a Will that comes into effect upon the testator’s death.
A testamentary trust can provide flexibility and control in asset distribution amongst beneficiaries and may assist in protecting assets from third parties and creditors. Assets can be preserved so that they can pass through future generations and the trust can provide for different scenarios.
Summary
Having a Will gives you a voice when you die. Your testamentary wishes can be made known, and your beneficiaries identified. Good estate planning can also help provide for more tax-effective distribution of your assets and protect vulnerable beneficiaries.
No matter what your age, health status, or financial circumstances, putting off making a Will just doesn’t make sense.
This information is of a general nature only and you should obtain professional advice relevant to your circumstances. If you or someone you know wants more information or needs legal help or advice, please call 08 9336 6300 or email [email protected].