More and more people are being proactive these days to ensure their affairs will be in order upon death by having their Will prepared and seeking succession advice. However it is still a daunting and difficult thought for some. Unfortunately death is inevitable for all. Despite the value of your assets, your wishes and situation should be discussed with a professional, not only for your peace of mind, but to assist those left behind.
Some common mistakes in Will planning are:
#1: Doing it on your own
With the complexities of life these days, preparing your Will usually requires a solicitor. Obtaining advice from a solicitor who also has experience in estate law can offer a great advantage as they are up to date on the practicalities and issues of administering estates. It is possible to make your own Will however if not done correctly, it can add more complications for your executors to deal.
#2: Lack of a crystal clear Will
Even if you live a simple life, a Will is a complex legal document. Various legal requirements are needed for the document to be deemed valid. When preparing a Will, the following should be addressed:
- Who will be the executor and what are their powers?
- Who will be the legal guardian of your children?
- What are your existing assets?
- Are they legally your asset to gift?
- Who will receive and manage your existing assets?
- What life insurance do you hold?
- What funeral arrangements do you prefer?
- How much superannuation do you have?
Such matters need to be expressed clearly along with your other wishes otherwise the Court will may have to reinterpret the document which can be an expensive exercise.
#3: Not updating your Will
Life presents many challenges and changes. Newborn children, deceased beneficiaries & changes in property, assets and liabilities can significantly affect our lives and in turn our succession plan. It is important that you continue to review your Will regularly during your lifetime and have it updated when required, especially in light of the abovementioned circumstances. If you are in doubt or have any questions as to your recent life changes, a quick phone call to your solicitor to discuss if such will affect your Will, may save you thousands in the long run.
#4: Forgetting your debts
Aside from deciding who will manage your assets, your debts and liabilities also need to be considered in light of for example, how will debts and liabilities be handled upon death? Who will be responsible for shouldering your debt? Are there relevant insurances in place that may assist? Will the loans need to be repaid? Are they legally your debts/liabilities?
#5: Not specifying all your assets
Many think their sole assets come down to their house and bank accounts for example. That is not true. You may be surprised as to the matters that have to be dealt with upon death. Aside from your monetary funds and precious items, you must also take note of your digital footprint. Have you given thought as to what is to be done with your social accounts and digital assets?
#6: Not appointing a valid attorney
Estate planning usually includes preparation of an Enduring Power of Attorney. This is a written authorization that allows you to choose someone who will act on your behalf to manage usually your personal, financial, and health matters if and when you are incapable of administering your own affairs. Your chosen attorney should:
- be 18 years old or older.
- not be your healthcare or service provider.
- not be bankrupt and in good financial standing.
- have full capacity to manage and understand their power as attorney.
#7: Not knowing the difference between your Will and Enduring Power of Attorney Documents
Many often confuse the role of executor and attorney. Although they are quite similar, they are in fact two separate roles. It is important to note that the role of Attorney under an Enduring Power of Attorney is only in place while you are alive. Upon death, this ceases and your Will comes into play and the role of your executor commences.
It is also important to have a brief discussion with the person you have chosen as your executor and as your attorney to ensure they are agreeable to take on the role and so that they know you have these documents in place and where they can be found when needed. If you appoint new people in these roles in a new document, you should advise your previous attorneys/executors whether they are still appointed or not.