Many Australians have purchased a basic DIY Will kit from the news agency thinking ‘what could go wrong?’ The answer is, ‘a lot actually’…
Here are four reasons why these basic Will kits are flawed:
- The purpose of a Will is to document how assets are to be distributed when a testator passes away. It needs to consider asset ownership and family relationships in order to determine the best legal structure to accomplish these objectives. A basic will kit can’t do that for you, and as a result your Will could be ineffectual, and lead to excess tax being paid (by your estate or your beneficiaries) or money not being safeguarded for your at-risk beneficiaries.
- The act of trying to save money with a Will Kit often costs significantly more down the track while causing much angst and frustration amongst your beneficiaries. The Will could be found to be invalid if the relevant law has not been considered, or if witnesses and dates are incorrect, or if beneficiaries have been incorrectly treated.
- Basic DIY Wills are a litigator’s dream, and are more easily challenged simply because the person who made the Will did not seek professional advice and assistance. If a Will is successfully challenged, the legal cost of the challenge is generally paid for out of the estate thus reducing the amount for distribution to beneficiaries. It’s also possible that the terms of the Will could be decided by the Court.
- A basic DIY Will that has been incorrectly written, or where the Will maker’s intent is unclear, or the Will is out of date, can result in lengthy court proceedings which delay payments to beneficiaries (who may need the money).
The use of a DIY will kit in Western Australian recently cost a grieving daughter over $200,000 in costs and lost inheritance when her late mother’s will was challenged and the contents of the will kit found to be not sufficient. The Court’s hands are also tied if people utilise a DIY will kit as they must investigate a potential will, even if the beneficiaries all agree that they do not wish it to be followed.
How can you mitigate these problems?
The solution to minimising these problems is to have your Will prepared by a trustee company or legal practitioner who has expertise in the area (especially where the estate is complex), or if you do not have complex estate planning issues, to use a comprehensive online Will service prepared by a trustee company.
Having a trustee or estate planning specialist involved in the preparation of a Will can be far cheaper in the long-run than leaving the estate to ‘fix’ problems that arise after death.
Of course, the only thing worse than using a basic Will Kit is not having a Will at all. In that case, the Courts or the State could make the determination on what happens to a person’s estate, and that may not be the same as they had intended.
If you would like professional assistance in planning your estate, please contact your financial adviser.
Disclaimer:This article is not legal advice and should not be relied on as such. Any advice in this document is general advice only and does not take into account the objectives, financial situation or needs of any particular person. You should obtain financial advice relevant to your circumstances before making investment decisions. Where a particular financial product is mentioned you should consider the Product Disclosure Statement before making any decisions in relation to the product. Whilst every care has been taken in the preparation of this information, Australian Unity Personal Financial Services Ltd does not guarantee the accuracy or completeness of the information. Australian Unity Personal Financial Services Ltd does not guarantee any particular outcome or future performance. Australian Unity Personal Financial Services Ltd is a registered tax (financial) adviser. Any views expressed are those of the author and do not represent the views of Australian Unity Personal Financial Services Ltd. If you intend to rely on any tax advice in this document you should seek advice from a tax professional. Australian Unity Personal Financial Services Ltd ABN 26 098 725 145, AFSL & Australian Credit Licence No. 234459, 114 Albert Road, South Melbourne, VIC 3205. This document produced in April 2017. © Copyright 2017