It’s one of the things that many people put off, but it’s very important to set out your wishes in a properly executed will – particularly if you have dependants. Here, we cover some common mistakes regarding wills.
Why should you make a will?
The most important reason why it’s so important to make a will is to ensure that your assets go to the people (or causes) you care about. Making a will provides reassurance that your wishes are carried out in the event of your death.
For those left behind, bereavement is already difficult enough without adding intestacy (failure to make a valid will) into the mix. By making a will, you are giving yourself peace of mind knowing that your assets will be distributed as you had intended and alleviating additional stress at what is already a devastating time.
In addition, making a will can reduce the potential for family disputes by removing ambiguity, stress and even friction amongst your loved ones.
By making a will, you can:
- provide for your loved ones (and even charities or causes you care about)
- leave particular items or assets to certain people
- leave any other instructions you may have (for example, about your funeral or burial wishes).
When should you make a will?
There are certain life events where you should definitely make, or update, your will:
- if you marry, re-marry, divorce or separate
- if you enter into a de facto relationship
- if you buy a house or acquire any other significant assets
- if you have children
Anyone over 18 can make a will as long as they have ‘mental capacity’. In order for a will to be valid, the person making the will must be of sound mind, memory and understanding. A person with a mild intellectual disability or in the early stages of dementia can still make a will if they have mental capacity at the time the will is made. If their capacity is in doubt, an assessment of their understanding needs to be made by an appropriate person, such as a doctor.
So what are some of the biggest mistakes when making a will?
Mistake #1 – not making a will
If the statistics are to be believed, up to 50% of Australians have not made a will.
There are lots of reasons for this; some of them include:
- thinking that they don’t have enough assets to warrant making a will
- have not got around to making a will
- being ‘superstitious’ about making a will
- not knowing how to go about making a will
- being uncomfortable thinking about one’s mortality.
Life is so unpredictable that it’s something that we should not put off. If you don’t write a will, it can put enormous pressure on your surviving loved ones. No matter what your age, having a plan in place is important.
If you die without a valid will, there are rules set down by law that stipulate how your estate will be distributed. These rules follow a hierarchy of who should benefit from the estate, which may not be how you would have intended your estate be distributed.
Another mistake many people make when they do write a will is not tell their families that there is a will in place, as well as where it is kept for safe-keeping.
Mistake #2 – not appointing a guardian for your children
If you’re a parent, this is one of the most important instructions you can provide in your will. It’s important to nominate a legal guardian for any minor children.
Usually, the surviving parent will have custody of children, but if both parents pass it’s crucial to have a trusted adult who will care for any minor children. A guardian takes over the duties of a child’s parents, which includes day-to-day care and decisions about education, health and welfare.
If you don’t name a guardian for your children, in the event of the death of both parents, any person with an interest (for example, grandparents, aunts/uncles or even close friends) can apply for guardianship of your children. However, the Family Court will decide who becomes the legal guardian – and that person may not necessarily be the person who you would choose to care for your children. For this reason, it’s important to set out your wishes.
And don’t forget ‘furbabies’! Over 65% of Australian households have a pet, so it’s important to make provisions for your pets. Under Australian law, pets are considered to be property, but pets are often overlooked when making a will. You can name a beneficiary for your pet or leave them to a friend or family member. You can even set aside an amount to provide for your pet’s ongoing care.
Mistake #3 – failing to provide funeral instructions
This is one of those things that we just don’t like to think about, let alone plan for. However, it’s important to let your loved ones know what type of funeral and burial you’d like because it lessens the burden at an already difficult time.
In addition, your family may have different ideas regarding funeral or burial arrangements, so if it’s important to you, it should be set out in your will.
Mistake #4 – failing to keep your will up to date
Your will lasts until you die, unless you change it, make a new one or revoke (cancel) it. If you marry or divorce you should also to update your will.
As we mentioned earlier, there are certain life events where you should update your will; including getting married, separated or divorced, having children and acquiring large assets (such as a home or business).
Review your will from time to time, to ensure that it continues to reflect your wishes. You can change your mind and change your will any time (as long it is properly executed) and will supersede the previous will.
The information on this page has been issued by Maritime Financial Services Pty Limited (MFS). It contains general information that doesn’t take into account your individual objectives, financial situation or needs. It’s important to consider how appropriate this general information is in relation to your situation before making an investment decision. We recommend that you seek financial advice before making any decisions regarding your super or investments. The information on this page is current at the time of publishing.