Wills, Estates and Succession Planning FAQs

Why do I need a Will?

If you are:

  • 18 years old or over;
  • have the capacity to make your own decisions; and
  • possess any assets (such as a car, money in the bank, shares, superannuation or a house)

then you need a Will.

If you do not put a Will in place and subsequently die, your estate will pass to a prescribed list of beneficiaries as determined by State legislation.

What happens if I die without a Will?

Dying without a Will (also known as intestacy) can cause more grief to those left behind, especially where the affairs of the deceased are more complicated and complex.  As discussed above, in South Australia it is the Administration and Probate Act that dictates how a person’s estate should be distributed when there is no Will.  Why then would you leave it up to the law to decide how your hard earned money is to be dispersed?

What’s wrong with using a free DIY Will kit?

A free Will kit cannot possibly replace the skills of an experienced practitioner adept in the area of estate planning law.  As the document is very generic, it does not allow for any anomalies or variations that may arise.  Prior to drafting any Will, a detailed analysis of that person’s assets and familial structure should be undertaken to gain a complete overall picture.  Again, this is not contemplated under a Will kit.

When should I update my Will?

A Will should be updated whenever there is a major change in circumstances, such as:

  • marriage
  • divorce
  • children
  • death
  • winning the lottery

Other precursors for updating a Will may include:

  • travel
  • buying a house
  • retirement
  • receiving an inheritance

What assets are covered by my Will?

Assets covered by a Will include the following:

  • real estate (owned solely or as tenants in common)
  • bank accounts (owned individually)
  • shares (listed on the Australian stock exchange or in a private company)
  • investments (owned individually)
  • personal furniture and effects

What assets are not covered by my Will?

Any asset that is owned jointly with another is not covered under a Will.  In these   situations, the principle of survivorship applies and the asset automatically passes to the survivor regardless of what is written in the Will.

Other assets not covered by a Will include:

  • assets owned by a discretionary Family Trust
  • assets owned by a Self-Managed Superannuation Fund
  • units in a Unit Fund

Is superannuation covered by my Will?

Whether your superannuation is covered by your Will or not will depend on the rules governing your particular fund.  There are two types of superannuation:

  • retail or industry super
  • self-managed super

The majority of these companies allow you to make a Binding Death Benefit Nomination in favour of a dependent (such as a spouse or child under the age of 18 years).  This means that when you die, your super will be paid directly to your spouse and/or your children outside of your Will.  Other funds however dictate that your super must be paid to your estate which means that the provisions of your Will shall apply.  In any event, it is always important to check what happens to your super benefits when you pass away.

What is a Power of Attorney?

A Power of Attorney is a document which enables you to appoint someone (known as an ‘Attorney’) to manage your legal and financial affairs (such as withdrawing money, dealing with superannuation and buying/selling real estate) in the event you are unable to do so for yourself.  This document confers a wide range of powers on an Attorney and should not be taken lightly.

What is an Advance Care Directive?

This regime was brought into effect on 1 July 2014 to replace its predecessors the Medical Power of Attorney, Enduring Power of Guardianship and Anticipatory Direction.

The Advance Care Directive enables you to appoint someone (known as a ‘Substitute Decision-Maker’) to make medical and lifestyle decisions (such as deciding on treatment, the circumstances under which life support should be switched off and placement into a nursing home) in the event you are mentally incapacitated and unable to make these decisions yourself.

What does an Executor do?

The role of the executor is to ensure the terms of your Will are honoured and that your  wishes are carried out.

After your death, the executor will collect and take control of your assets, pay any debts and then distribute the estate to the beneficiaries named in the Will.  Sometimes the executor will need to arrange the funeral if it has not otherwise been arranged.

In order to attend to these matters, the executor may need to sell assets such as real estate or shares. Any proper expenses incurred by the executor in their administration of the estate can be claimed from the estate.

The executor is named in your Will and you can have more than one executor.

What is Probate?

A grant of probate confirms the authority of the executor to administer your estate.  In other words, it confirms the Will is valid and the executor has the right to take possession of  your assets, pay your debts and distribute your estate to the beneficiaries.

A grant of probate is issued from the Supreme Court of South Australia.  The executor obtains probate by preparing and lodging several documents in addition to the original Will and the death certificate with the Probate Registry which is part of the Supreme Court.

As probate documents are court documents it is common for executors to retain a solicitor to prepare and lodge these documents for them.  The solicitor’s costs are paid from the estate.

When do I need Probate?

Often organisations  such as a bank will only release the assets to the executor upon receiving a grant of probate.

They do this because it protects them from distributing the deceased’s assets to the wrong person.  If, for example, a bankgave your money to a person named as the executor in an old or invalid Will, then they may be giving the assets to a person not entitled to receive these assets.

The reliable way for an organisation such as a bank to be certain that they are paying the deceased’s money to a validly appointed executor is to ask for a grant of probate from the executor.  They can then be sure that the Supreme Court has approved the executor’s appointment and that the Will is valid.

It is for this reason that the Lands Titles Office will not allow the executor to transfer yourreal estate property without obtaining a grant of probate.

What are Letters of Administration?

If you die without leaving a valid Will then, clearly,you have not appointed an executor.  Therefore, who has the right to administer your estate?

The person who has the right to administer your estate is known as the administrator and not the executor. The person entitled to be the administrator will be in order of priority, a spouse, child, grandchild, parent, sibling, grandparent, uncle, aunt or cousin.

When an organisation such as a bank ask for a grant of probate of the Will before releasing the your  assets to the estate, the administrator cannot provide the Will as there isn’t one. Thus, the administrator will apply to the probate registry to have their appointment as administrator approved by the Supreme Court. This application is called Letters of Administration.

After receiving approval of their appointment by the Court, the administrator can then collect your assets from organisations such as banks or retirement villages and sell your real estate property in the same way as if they had a grant of probate.

What happens if the Will is lost?

A Will may have been misplaced or may have been unintentionally destroyed, such as in a fire.

If the original Will is lost but a true copy of the original is in existence then this copy can be used to obtain a grant of probate by the executor.

If you have lost your Will then the above procedure should not be relied upon as a satisfactory way to arrange your affairs.  It is time consuming and expensive.

Who can contest a Will?

The following relatives can contest a Will on the basis they have not received adequate provision from the estate:

  • Spouse (including an ex-spouse)
  • Domestic Partner
  • Child
  • Child of a spouse or domestic partner who was maintained by the deceased
  • Grandchild
  • Parent (if they cared or contributed to the maintenance of the deceased).
  • Sibling if they cared or contributed to the maintenance of the deceased).

The applicant must establish that they have been left without adequate provision for their proper maintenance, education or advancement in life.

Any application to the court seeking greater provision from the estate must be made within six months from the date of the grant of probate or letters of administration.

You can also contest a Will on the basis that the Will is invalid; that is, that the deceased did not have the ability to make the Will due to being unduly influenced by another person or because the deceased did not have the mental capacity to make the Will.

You would make an application for the Will to be declared invalid if you were the beneficiary of a previous, valid Will and had your provision affected by the later invalid Will.

Disputes over inadequate provision and an invalid Will can be settled by the parties signing an agreement the effect of which is that the executor then distributes the estate pursuant to the agreement.