People often share their own experiences or stories they've heard about Wills and Estate matters with their family and friends. This can sometimes create myths about the way that Wills work.
Here are a few facts you should know about Wills made in Western Australia:
1. EXECUTORS' OBLIGATION TO ACT
The person (or persons) that you nominate to be your executor in your Will is not obliged to accept that role. A clause appointing the executor is a wish only. This means that if your nominated executor is unable or unwilling to act, then they cannot be compelled to act.
Your Will simply gives your nominated person a right of priority to act as your executor. However, your nominated person is able to renounce this right if they do not wish to act for any reason. If your nominated person renounces their right, then another person will be required to act as the administrator of your Will. This is, in most cases, one of the residuary beneficiaries of the Will.
In circumstances where there is no other person willing or able to act, then a professional executor (such as an accountant, solicitor, or the Public Trustee) may be appropriate.
2. SPECIFIC GIFTS
Your Will gives away the assets that you own as at the date of your death. If your Will gives someone a specific item, such as a piece of jewellery, but you no longer own that item at the date of your death, then the beneficiary simply misses out on their gift. This is called ademption. The beneficiary is not compensated for the value of the item.
3. WHAT HAPPENS IF YOUR CHILDREN HAVE PREDECEASED YOU BUT ARE BENEFICIARIES?
Under section 27 of the Wills Act 1970 (WA) if you leave a gift to your child in your Will, and that child predeceases you, but leaves children of their own (your grandchildren), then that gift will automatically pass to those grandchildren unless your Will says otherwise.
If you do not wish for particular gifts to pass on to your grandchildren and would prefer to leave them to someone else, this should be specified in your Will.
4. WHAT IS A TESTAMENTARY TRUST?
A testamentary trust is a trust that can be created within a Will and arises upon the death of the will-maker. The provisions of the trust are built in to the Will. The beneficiaries do not have direct control of their inheritance if it is held in a testamentary trust.
The trustee of the testamentary trust will look after their inheritance and make investments on their behalf. The trustee can choose to give cash sums to beneficiaries to assist with their living expenses, education, holidays and general financial support or otherwise dealt with the trust as specified in the Will.
5. ASSETS WHICH CANNOT BE DEALT WITH
There are some types of assets that you can't leave to a beneficiary by your Will. For example:
- assets in your joint name with any other person – these assets will automatically go to the surviving owner; and
- superannuation and life insurance – these benefits usually go to a person that you have nominated with your fund.
Similarly, you cannot directly leave a company or trust you are involved in or assets held by a company or trust to a beneficiary as companies and trusts are separate legal entities. To pass on assets held by a company or trust you must appoint the beneficiaries as your successors in the positions of control of the trust and gift your shares in the company.
6. WHO CAN WITNESS A WILL?
One of the formal requirements for a valid Will is that the will-maker's signature must be witnessed by two independent adults.
It is not appropriate for a beneficiary to witness the Will because this raises the possibility that the beneficiary has pressured the will-maker to sign the Will.
The will-maker and the witnesses must all sign the Will in the presence of each other. If the will-maker and the witnesses all use the same pen, then this is some evidence that they were all together at the time of signing.
It is also a good idea for the witnesses to print their full names, address and occupation in case they need to be located at a later date to give evidence about what happened at the time of signing
.
7. WHAT IS A CODICIL?
Your Will should be updated as your circumstances change. A codicil is a document you can prepare that makes minor amendments to your Will but otherwise confirms that Will in all other respects. A codicil is often cheaper than making a new Will.
However, it is usually best to make a new Will so that your wishes are clearly contained within the one document only.
8. EFFECT OF MARRIAGE AND DIVORCE ON A WILL
A Marriage or a Divorce Order automatically invalidates a Will, unless the Will was made in contemplation of marriage or divorce.
It is important for your Will to have a clause expressly stating that the Will is made in contemplation of marriage or divorce if that is your intention.
It is also important to note that simply being separated does not invalidate a Will. In the period of separation prior to obtaining a Divorce Order you may wish to prepare a new Will which reflects your current circumstances and wishes.
9. FAMILY PROVISION ACT CLAIMS
No Will is air-tight. Any one of the following people may be entitled to claim for greater provision out of an estate under the Family Provision Act 1972 (WA):
- spouse or de facto partner of the deceased;
- children (whether biological or legally adopted); and
- parents of the deceased. In certain cases, step-children, grandchildren, former spouses and former de facto partners are also entitled to claim.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
