While many of us recognise the importance of having a Will, a large number of people continue to purchase a do-it-yourself Will kit and attempt to do it themselves at home. This is in part caused by the cost pressures society faces while in part the belief that the document will be good enough should something happen to them. This is often untrue and, in fact, having a do-it-yourself Will can often cause more problem than it solves.
9 common pitfalls of having a DIY Will include:-
- Dated incorrectly, or not at all
This becomes a problem if two or more versions of a Will are located, but one is not dated. The Court will then have to ascertain which document was intended to be the last Will, often at a significant expense to the estate.
- Leaving incorrect assets
There are a number of issues that can arise with assets including the failure of a specific gift and not fully owning the property you are trying to gift. It is very common for people to leave assets in their Will that they don’t actually own. A common example of this is gifting business assets which may not be owned by the individual, even though they own the business, and therefore that asset cannot be left for a particular beneficiary in the Will.
- Not dealing with superannuation correctly
Superannuation is the classic example of where DIY Wills can cause issues. A Will cannot bind a trustee of a superannuation fund to direct a member balance to a certain beneficiary. This can only be done via a binding death nomination to the superannuation trustee.
- Misunderstanding legal definitions or using vague wording
It is common for DIY Wills to contain incorrect or vague wording often resulting in the executor needing to seek the direction of the Court or resulting in gifts failing. An example of this is when someone gifts “all of their shares” intending to gift only shares held on the ASX but not realizing that this also gifts all shares that they may have in a private company that may run their business or be the trustee of their family trust.
- Losing or damaging the Will
Often DIY Wills are left at home in a cupboard or drawer which can mean that it is lost or damaged.
There have been instances where the family know that a person had written a Will, but have been unable to find it. The family then are required to advertise to try and locate the Will and may need to then apply to the Court to be appointed administrators of the estate. This can involve significant costs and delay in administering the estate.
Likewise, damaging a Will (either by accident or, worse, intentionally) can result in significant costs and delays as it may result in certain provisions of the Will being illegible and can add to the work necessary in order to be granted Probate.
One major benefit of having your Will drafted by a lawyer is that we keep the original of your Will in our safe custody so that your family know where to find it and it is kept safe.
- Not being witnessed or signed properly
There are very specific rules about how a Will is to be witnessed. Wills require two witnesses and in circumstances where there is only one or no witnesses then the executor will be required to apply to the Court. It also becomes a problem where it is unclear who the witnesses were because their details haven’t been noted on the will and this can result in significant costs and delays where those witnesses are required.
- Creating unintended tax consequences
Tax is an important consideration when making a Will and DIY Wills can create unintended tax consequences, for example, by leaving assets to a beneficiary who is not an Australian resident for tax purposes or by failing to recognise the benefits a testamentary trust may have by allowing income to be streamed to minor beneficiaries.
- Failing to appoint an executor or appointing an inappropriate executor
Failing to appoint an executor will result in significant costs and delays as an application will be required to be made to have someone appointed.
There is often a misconception that you cannot appoint an executor who is also going to be a beneficiary of an estate. This is incorrect and can result in some people appointing an inappropriate executor.
Appointing an inappropriate executor can also result in significant costs and delays in circumstances where a number of people are appointed without any regard to any family conflict (whether already existing or possible).
- Ignoring Potential Beneficiaries
There are certain obligations that a Will maker has, under legislation, to certain potential beneficiaries such as a spouse, children or financial dependents. While we cannot prevent a claim being made against an estate for further provision, proper legal advice can, in many circumstances, minimise the chance of a person being successful and will at least mean that you will be fully informed of potential claims or issues that may arise.
The saying “you get what you pay for” certainly rings true when it comes to DIY Wills.
If you don’t have a Will, have a DIY Will or need to update your Will then please contact our office to arrange a convenient time to meet with one of our experienced solicitors.