There are various ‘Will Kits’ available online. Many are cheap or ‘free’. It is claimed all you need to do is ‘fill in the blanks’. Many websites boast you can prepare your own Will yourself ‘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 held in your personal name or with others or in a separate entity. The way assets are held can determine how and to whom those assets may be left. For example, generally, when assets are held jointly with another person, the surviving person receives the deceased person’s share when he or she dies. A gift 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 joint tenancy which will then enable you to leave your share to whomever you wish.
Your lawyer may also discuss your superannuation. Your superannuation (death benefits) must be paid to a superannuation dependant. If you have not made a valid binding death benefit nomination, the trustee of your superannuation fund will decide who receives your death benefits.
Different categories of beneficiaries are taxed differently under taxation laws and, without taking advice, you may cause unnecessary tax implications for your beneficiaries.
If you hold assets in a separate entity (perhaps a company or a family trust), further issues arise which require careful consideration.
Preventing a gift from failing
A common problem with Wills is the risk that a gift to a beneficiary may fail. ‘Ademption’ occurs when a specific gift in a Will (such as, for example, a particular motor vehicle or a house) is no longer owned by the Will-maker when the Will-maker dies. Consequently, the intended beneficiary of that gift may lose out altogether. This can cause the beneficiary to receive a far lower benefit (or no benefit) from the Will than intended.
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. These structures may also help manage capital gains tax liabilities.
Guarding against family provision claims
A family provision claim may amend your Will despite your intentions and a lawyer will be able to help you work out what can be done to reduce the risk of such an outcome.
Family provision claims can be brought in WA by current or former spouses or de facto partners, biological or adopted children of any age, a parent, and, in more limited circumstances, grandchildren and stepchildren. To succeed, an applicant must show he or she was not adequately provided for by the Will. Each case is different, and several 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 an estate.
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.
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 (08) 9758 8073 or email [email protected].