Last month, we explained the importance of binding nominations in our monthly newsletter. We would like to continue this discussion this month, in particular discussing the importance of professional estate planning.
Our partner law firm KWS Legal in fact is concerned that around half of all adult Australians don’t have a valid will, and even those that do often contain mistakes which mean that their wishes are unable to be properly fulfilled. This trend is particularly worrying for families with children and mortgages and poses a significant risk to the surviving spouse should a death or total disability occur and depending on the circumstances, could affect the distribution of the estate.
KWS Legal describes a will as one of the most important documents you will ever sign. Whilst composing a will can seem like a stressful and complicated process, KWS Legal have the experience and knowledge to take the stress out of this process and ensure your wishes are properly taken care of. It is important to seek advice on the most effective way to distribute your assets as well as consider testamentary trusts to minimize the tax implications of the transfer of your assets.
Equally, it is important to seek professional legal advice when preparing enduring powers of attorney and guardianship documents to give you peace of mind that if you are no longer able to make decisions for yourself that someone you trust will be able to make decisions regarding your medical treatment and attend to your financial affairs.
Although the maker of the Will (or “testator”, in legal jargon) might save a few dollars by purchasing a Will kit instead of seeking legal advice, problems can arise which often lead to delays in administering or finalising an estate. It can also result in either the testator or their family and loved ones incurring substantial fees in trying to rectify or resolve these issues.
With the increased availability of Will kits online and through various outlets such as Australia Post, the NSW Trustee & Guardian has experienced a sharp rise in time spent unravelling issues that arise with the use of these kits, according to Chief Executive Imelda Dodds in a 2012 newsletter. Dodds says that the Wills that come out of these kits are ambiguous, can be misinterpreted and therefore challenged, or even worse, are invalid.
Common mistakes of do-it-yourself wills include:
• Most people don’t realise that any Will is revoked by a subsequent marriage. Similarly, a divorce revokes any reference to the former spouse by way of executor or beneficiary or power of appointment in the Will.
• People may put unreasonable conditions on certain gifts such as “Person X can have my diamond engagement ring, but he cannot give it to his wife who I hate”, or other such conditions which may be against public policy or are impossible to enforce.
• If a testator makes the decision not to leave anything to a family member, it is helpful to give reasons in the Will or an accompanying document such as a letter of wishes. For example, if there is a legitimate financial reason that the person was left out (such as giving them various financial gifts over the years) those details might be helpful in construing the Will. The Will may otherwise be vulnerable to be challenged by the person who was left out.
If you are travelling overseas frequently or for extended period of time, one should also consider a general power of attorney to allow someone to take care of your financial affairs whilst you are away. Where particular and specialised support is needed in the event of disability or incapacity, KWS Legal is proud to be your trusted legal advisor. Similarly, in the event of contested matters, you can rely on our litigation team to resolve disputes and provide qualified representation.
We want you to be sure assured that the assets you have worked hard to accumulate over your lifetime are left for the benefit of those people and/or institutions you wish to support, and left in the way that is most useful to them. It is incredibly important to seek professional legal advice before completing any of these documents as any small errors in wording could adversely affect the result you seek. We therefore advise against do-it-yourself wills and powers of attorney/guardianships and recommend that you talk to the friendly and experienced solicitors at KWS Legal for your own peace of mind.
We are very pleased to advise that Verdure Financial Planning Solutions clients are eligible for a special 20% discount if you choose to have your estate planning needs taken care of professionally by our partner law firm KWS Legal. Please contact out office for more details or if you wish to speak with one of the friendly lawyers at KWS Legal.
Please do not hesitate to contact our friendly office staff if you have any questions that we may assist you with. If any of your personal circumstances have changed, such as a change in income or growth in your family, then please let us know to ensure your details are up to date and your insurances adequately cover your needs.
Katriel Warlow-Shill and SMSF Insurance Specialists Pty Ltd atf SMSF Insurance Specialists Trust
t/as Verdure Financial Planning Services are Authorized Representatives of Synchron
Australian Financial Services Licensee No. 243313