A R Walmsley Solicitors Sydney

DOCUMENTS & GUIDES...

STEPS IN DRAFTNG AN EFFECTIVE WILL

The very first step that must be taken when drafting an effective Will is to establish with clarity what you own and how you own it.

Tom and Therese own their home jointly. They own an investment property registered in Tom's name alone. They have a portfolio of shares owned jointly. Tom and his brother have shares in a family company which runs the family business. Both Tom and Therese have life insurance policies. These life insurance policies are owned by them independently. The benefits attached to those life insurance policies are unequal, in that Tom's life is insured for $250,000.00 whereas Therese's life is insured for $150,000.00. Tom and Therese both have superannuation entitlements.

Some of these entitlements and assets are estate assets which enable Tom and Therese to pass them on in accordance with their wishes expressed in their Wills. However, some are non-estate assets and not controlled by their Wills. It is continually surprising to people to learn that many of the assets are unable to be controlled by their Wills. In Tom and Therese's case, the family home will automatically pass to the survivor. This is an asset which is not able to be controlled by their respective Wills because of the way in which they own it.

The investment property is able to be controlled by the Will because it is only registered in Tom's name. The portfolio of shares is outside the control of the Will as the shares are jointly owned and the survivor will automatically be entitled to the deceased's interest in the shares. The shares in the family company owned by Tom are controlled by Tom's Will. Unless Tom has addressed this issue very carefully with his Lawyer, Tom's brother will find himself in business with Therese. This may not be a satisfactory result for the brother or Therese. The proceeds of life insurance policies are not controlled by the Will unless the beneficiary of the policy is the deceased person's estate.

The superannuation entitlements need to be carefully considered. If they are in managed funds they will not be controlled by the Will but by the rules of the superannuation fund. There is no doubt in the case of Tom and Therese's that they will be the beneficiaries of each other's super entitlements. However, that simple scenario is not the case when there are blended families. The rules of the superannuation fund can cause great distress. The majority of people have superannuation entitlements and those who have been married before and have children to other relationships need to obtain advice from their Lawyer in relation to whether or not they can control and gift superannuation entitlements through their Will.

So you can see there are some assets which are controlled by your Will and others which are not. In order for you to have an effective Will you need to know what you can control in a Will and what you can't.

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