A will is a legal document that comes into force upon your death and is prepared by you, the ‘testator’ / ‘testatrix’. A will prescribes exactly who receives the benefit from your assets (known as ‘beneficiaries’). Provisions for precisely how to distribute those assets may also be detailed. A will is the most effective way to ensure that your assets are eventually distributed according to your wishes.
However, wills are not solely confined to dealing with your assets. They may include burial preferences, funeral expenses, or appointing guardians for children, among others.
In the will you may appoint a person(s) to oversee the distribution of assets and wishes. This person is known as the ‘executor.’ Generally, they are under a strict legal obligation to comply with your will. The executor effectively acts as an administrator of your estate to ensure that your written desires are met.
Wills are rigid and complex documents in the sense that the literal effect of the words will be given considerable attention. Because they are so rigid it is important keep them as up to date as frequently as possible. If you need to make a change to your will you may have to execute a separate document known as a ‘codicil.’ You should ask yourself whether the details of your estate, the list of beneficiaries and the chosen executor(s) are as up to date as possible.
If you do not have a will upon your death then any desires you may have regarding the distribution of your estate will be irrelevant. In this case, an ‘administrator’ will be appointed, who will divide your estate according to list of those deemed in need.
What property passes in a will?
Historically, real or personal property could only be transferred by will. However, this now includes other forms of assets. The types of property may include your house, car, boat, pet, bank account, and shares, among others.
Together the real and personal property is referred to as your ‘estate.’ This is the property that will be distributed by the executor of your will to your chosen beneficiaries.
Property in your will should be exhaustively detailed so as to avoid any potential confusion. For example, the exact address of a piece of land you own and wish to bequeath should be stated and be the current address.
What property does not pass in a will?
To be able to transfer the property that you list in your will you must to a certain extent either own, control or have investments in that property. For example, if you state in your will that your car is to go to your youngest son, but you actually sell to the car prior to your death; then that transfer to your son will not be valid, as you no longer own the vehicle.
You should also note that if you are a joint tenant of a property you will be prevented from bequeathing your share of that property. If you die, the other joint tenet will inherit your share according to the survivorship principle. If you are concerned that this may apply to you, perhaps a tenancy in common would be more suitable because in that case you are allowed to bequeath your share in the property.
Superannuation and life insurance policies are not as clear cut as proceeds of these policies are controlled by the policy trustees and not the executor of the will . Usually you have to list the beneficiaries of your superannuation and life insurance upon the creation of them. Reference should be made to the terms of the trust deed of your superannuation fund to determine who the nominated beneficiaries are.
Other examples of non-estate property may include assets held in unit trusts or family trusts.
Requirements for validity of a will
As mentioned above, wills are very rigid and strict documents that may be interpreted literally. Therefore, the main requirements are that the will is a written document, which is duly signed by you, the testator. Two witnesses are also required to sign the will. The witnesses and the testator must be in the presence of each other when the testator signs the document.
The testator must be at least 18 years old, unless there is court approval otherwise. There is also a requirement that the testator has ‘testamentary capacity’ – meaning that you have a sound mind, memory and understanding. The testator must appreciate the consequences of bequeathing their assets in a will. Testator’s should not be afflicted with what is often referred to as a ‘disease of the mind’, which may include being free from dementia, mental illness, and psychosis, among others.
The existence of any undue influence or duress may also be a consideration taken into account when determining the validity of a will. This will usually relate to when the voluntary free will of the testator has been compromised by another party. It may include any special disadvantage that has been exploited at the expense of the testator. The existence of undue influence or duress will depend on the particular circumstances of a given case.
Wills can be challenged for invalidity, especially if the testator did not have ‘testamentary capacity’, therefore, you should be careful to pay close attention to whether you have created a valid will by seeking professional advice.
