When racing driver and Bathurst 1000 legend Peter Brock died suddenly, he left a will he’d written without a lawyer’s help. Unfortunately, a couple of omissions triggered a long-standing and very public legal battle between his estranged spouse, his new partner and his children.
Brock had overlooked one basic fact about making a will. “Having the document means nothing if your wishes aren’t clear, precise and easy to carry out and if you don’t have advice to go along with it,” Anna Hacker, National Manager Estate Planning at Australian Unity says.
Making sure you have a valid will is one of the most thoughtful things you can do for the people you love. It helps you to provide for them. It could save them from unnecessary costs. It makes their lives much easier at a very difficult time — when they’re grieving your loss. And, of course, it’s also the most effective way of increasing the chances that your final wishes will be carried out the way you want, after you pass away.
Most of us have more assets (and more complicated assets) than we realise.
“Your super, for example, is held in trust by the trustee of your super fund, so it isn’t automatically considered an asset by your will,” Anna explains. “A joint bank account won’t be considered part of your estate. And, while you might want your share of any joint assets to go your own children, which sometimes happens in blended families, this might not be possible. Similarly, a structure such as a trust or a business could mean they automatically go to someone else.”
Understanding how these things work is critical, and this is where an estate planning lawyer can help.
“An experienced estate planning lawyer can help you to compile a list of your assets, discuss your objectives then set them out so there’s less danger of misunderstandings or uncertainty,” Anna says. “Your lawyer can also help you decide who to appoint as your executor — the person responsible for carrying out your wishes. Everything else will flow from that.”
An executor needs to be someone you trust, so it’s understandable that many people appoint a family member, most commonly their spouse, a sibling or one of their children. This isn’t always a good idea.
“In the first place, they might not want the role,” Anna says. “The role of executor can be very complex and time-consuming, and a family member might not have the time or expertise to take it on. They might not want the responsibility, or feel comfortable having that much authority, particularly if there’s the possibility of conflict between siblings or other beneficiaries. Often people who find out they are executors do not want to act at all, especially given there is a chance of personal liability if something goes wrong, even if they acted in good faith.”
An unprofessional executor can cost an estate a great deal of money.
“Sometimes a will is very specific about who receives particular assets,” Anna says. “Other times the instruction is to divide the whole estate equally between beneficiaries.”
In this case, it could be up to the executor to decide whether the assets are sold first or transferred directly.
“Someone inexperienced might decide it’s easier to sell the assets and divide out the cash, but if they haven’t taken capital gains into account this could take a big chunk out of the proceeds,” Anna says. “Professionals usually recommend looking at the overall picture before deciding on the best strategy.
Some executors also drag their feet. “Delay is a big issue, we see it a lot,” Anna says. “This is why it’s so important to choose someone willing and able to do the job.”
There are also cases where two executors don’t get along. “It might sound like a good idea to appoint two executors to share the load, and some people work really well together,” Anna says. “Then there are those who fight over every detail right down to which real estate agent they should use to sell a property. If you do want to appoint more than one executor, it’s a good idea to set out how decisions should be made if they disagree.”
The executor generally pays funeral expenses out of the estate. Unless there are specific instructions in the will, they also make the arrangements, or they can ask someone else do that for them.
These days, many people are choosing to take care of the costs separately with either a pre-paid funeral or a funeral bond. This is an investment product that can be accessed for a funeral and nothing else.
“These give you an opportunity to choose the kind of funeral you want,” Anna says. “Many people feel comforted to know their wishes will be met, and this is also a good way to take a financial burden away from the people you love.”
When it comes to your will, there can be no guarantee that every word will be honoured. Even a will that has been legally drafted can be contested by family members.
“The best way to minimise the risk of this (or minimise the overall impact on your estate), is by getting proper advice when you’re drafting your will,” Anna says. “A lawyer can also structure your assets to help protect them or help you to transfer them cost-effectively while you’re alive, depending on your individual circumstances. These are the kinds of things few people without a legal background would even think about, but this level of detail can make all the difference to whether your wishes are carried out.”
Getting the right advice when you write your will can help you take the burden off your family and loved ones when you die. It also has the added benefit of helping to ensure your final wishes are being met as closely as possible.