What happens if I die without a Will?
If you die without having a Will, you are described as having died 'intestate'.
Your property and possessions may not be distributed as you would like.
If you die without having a Will, each state and territory has legislation that determines:
- who is responsible for distributing your property and possessions;
- to whom your property and possessions are to be distributed; and
- the proportions in which they are distributed.
Can I appoint my lawyer, accountant or financial planner as an executor and trustee?
Yes, you can appoint your lawyer, accountant or financial planner as an executor and trustee. However, you should ask them whether they are willing to act.
If you appoint your lawyer, accountant or financial planner (or any professional person), it is likely that they will request a clause be included in your Will that allows them to charge fees for work they undertake in their role as executor and trustee. The Cleardocs document package contains a suitable 'charging' clause.
What is the maximum number of executors and trustees I can appoint using Cleardocs?
In each state and territory in Australia (except Queensland, Tasmania, Victoria and Western Australia), the law does not limit the number of executors you can appoint. In Queensland, Tasmania, Victoria and Western Australia, you can appoint only up to 4 executors and trustees. You can use Cleardocs to appoint up to 3 executors and trustees. Maddocks does not advise more than 3 — practically speaking, it can lead to difficulties, and increased costs, in administering an estate.
One option is to nominate 1 executor or executors to act and then, if they are unable or unwilling to act, 1 or more alternative executor or executors can be substituted in their place.
It is advisable to ask the person or persons you wish to appoint whether they are willing to act.
If you appoint more than 1 executor, if any are unable or unwilling to act, the remaining executors can continue to act.
Does my de facto partner fall within the definition of spouse?
No, a de facto partner does not necessarily fall within the definition of spouse so you need to be clear in your Will. If you have a de facto partner and your Will simply refers to them as 'spouse', that bequest may fail.
To avoid this uncertainty, it is important that any beneficiary in your Will — including your de facto — is appropriately identified; you should list their full name and their current residential address.
What happens if the deceased has nominated a charity as a beneficiary of their estate and that charity no longer exists?
If a charity is a beneficiary under a Will and the charity ceases to exist, what happens to the bequest depends whether the Will contemplated the event of a charity ceasing to exist or amalgamating with another charity.
If the Will states that another organisation that nearly fulfils the charitable purpose of the original charity can be a substituted beneficiary, then that bequest can be made. The Cleardocs document package contains a clause to this effect.
If the Will does not include such a clause, then the bequest will fail.
Additionally, it is important to obtain accurate details of the charitable organisation (full name, ACN, business address in your state or territory) when contemplating making a bequest.
What is the effect on my Will if I get divorced and do not revise my Will or succession plan?
You must revise your Will if you have a change of relationship circumstances.
Any provision in your Will that makes provision for your (now) ex-spouse will be invalid.
The remaining provisions of the Will are still valid except if you live in Western Australia.
If, for example, your Will nominated your ex-spouse as the residuary beneficiary, and did not provide for an alternative beneficiary, then there would be a 'partial intestacy'. This means you have made no provision for the part of your estate which would have gone to your ex-spouse.
What happens to my Will if I re-marry?
If you re-marry after you have made a Will, the Will is invalid unless your Will specifically says it is not to be revoked by a subsequent marriage.
You can order your Will here and then, on the interface, you answer 'yes' to the question "Does the will maker want the Will to stay in force after any marriage?" if you wish to ensure your Will is not revoked by a subsequent marriage.
You must review your Will if you have a change of marital circumstances.
What happens if I am bankrupt when I die?
If you are bankrupt when you die, your estate can be administered in bankruptcy by the named executors and trustees.
Alternatively, a creditor may apply to the court for a Grant of Representation allowing them to administer the estate in bankruptcy.
Can I make a Will if I am under 18 years of age?
No, you cannot generally make a Will if you are under 18 years old. There is an exception if you are legally married or obtain consent from a court.
What are the rules relating to cash and specific gifts?
The rules relating to a cash and specific gifts are:
- If your Will includes a gift of a specific asset, if you no longer own that asset when you die, the gift fails.
- Gifts of specific items take priority over gifts of cash.
- If, after gifting specific assets and paying your debts and funeral expenses there are no assets left to fund cash gifts, then those cash gifts fail. If there are some but insufficient assets to fund the cash gifts, then those cash gifts are reduced proportionately to each other.
What happens if a specific asset is gifted to a person in a Will but that asset is subsequently sold or lost?
If a specific asset gifted in a Will is subsequently sold or lost, the gift fails.
To avoid this situation, you can:
- leave a monetary gift; or
- include a broader description in the gift clause, for example, 'any private vehicle I may own at my death' as opposed to specifying a particular make and model of vehicle.
What happens when there are insufficient assets left in my estate for my executor to distribute specific gifts of money under my Will?
If there are insufficient assets in your estate for distribution of specific gifts of money, the monies will be apportioned pro-rata, that is, in the proportions specified in your Will.
For example, if your Will provides that 5 beneficiaries are to each receive $100,000 but there is only $100,000 cash available, then each beneficiary will receive $20,000.
Your residuary beneficiaries receive nothing in this example.
Can I change my Will?
Yes, you can change your Will.
You should prepare an entirely new document and make sure it is witnessed properly.
When should I review my Will?
You should review your Will every 2-3 years to make sure it reflects your wishes.
You should also consider reviewing your Will if you experience a change of circumstances such as:
- your relationship status changes (marriage, divorce or separation);
- you buy or dispose of a significant asset (for example, a home or business);
- you have a child;
- an executor or beneficiary identified in your Will passes away; or
- you wish to change an executor or beneficiary identified in your Will.
What happens if a beneficiary does not survive me?
A beneficiary must survive you by 30 days to be entitled to inherit. Sometimes a Will may also provide that a beneficiary must attain a specific nominated age before they can inherit.
If the beneficiary fails to survive for that period or to attain that age, then the gift to them fails and will generally pass to the remaining residuary beneficiaries.
There is an exception if the deceased beneficiary is your child or other descendant. In that case, if the deceased child or other descendant themself has a child or other descendant who survives you and attains the nominated age, then the gift does not fail, but passes to those children or descendants. This results in there being a substitute beneficiary or beneficiaries.
To include this substitution in your Will, you can order your Will here, then on the interface, you answer "Yes" to the question: 'If any beneficiary who is your descendant (such as a child or grandchild) does not survive you, do you wish their share to pass equally to their children?"
You will then be asked "Would you like to apply this rule to all beneficiaries regardless of whether they are a descendant of you?" If you would like the substitution rule to apply to all of your beneficiaries (and not just your children and descendants) you should answer "Yes".
What happens to my debts when I die?
Your debts still have to be paid when you die.
One of the duties of your executor is to ensure that all debts are paid and liabilities discharged before your assets are distributed to your beneficiaries.
Generally debts are paid from your residuary estate, but if there are insufficient assets in the residuary estate, any specific gifts are liable to meet the debts.
There is an exception to this rule in relation to secured debts. A secured debt is a debt secured over a particular asset, for example, a mortgage on your home. If you gift a specific asset to a beneficiary which is subject to a secured debt, then the beneficiary inherits the asset and the debt. It is not paid from your residuary estate. If you wish to structure your Will so that the secured debt does not pass with the secured asset, you should seek legal advice about this.