Creating a will helps protect those you leave behind – both by simplifying the process of managing your estate and removing any doubt about your wishes and requests.
What to include in your will
The two most important aspects to a will are your named beneficiaries and your executor and trustee.
For most people, your beneficiaries will be your partner, or your children, or any other family members or friends. Some people will simply divide their estate between these people, while others might have treasured objects or assets they would like to gift to certain people, such as jewellery or heirlooms.
The amount left behind to your beneficiaries will be minus any debts or loans that need to be paid after you pass away. You’ll need to consider this when deciding on the distribution of your estate, as some of these items or assets may be required to settle these debts. You will also need to name two back-ups for each beneficiary – just in case the original beneficiaries have since passed away.
Your executor and trustee is the person you would like to take the legal responsibility of settling your estate. This means they will be applying to the High Court for probate (a court order confirming the legality of the will), collecting your assets, paying your debts, carrying out the wishes stated in your will and dealing with disputes, if any arise.
Other than covering your wishes for your assets (and any potential care of children), your will is also a place to determine what you would like done with your body after your death. It will also include who you wish to act as your Power of Attorney (who is the person who you’d like to speak for you if you are incapacitated by illness or injury).
What else to consider
Aside from the gap left in the lives and hearts of family and friends, when a person dies they can also leave a sizable financial gap. While the assets listed in your will may provide a buffer in the family bank account, life insurance can be a huge help in closing this gap. This insurance is extremely helpful when it comes to providing immediate funds for funeral and burial costs, as well as paying down debts such as mortgage payments and replacing lost income.
“The best time to make a will is now. Even if you don’t have much in the way of assets, the legal processes involved in settling a person’s estate can be very stressful to the family.”
The level of cover you choose may depend on your financial situation. Some opt for Life Cover, which is a lump sum paid out in the event of death or terminal illness, used to replace lost income and repay debts. Life Income Cover goes further in providing a regular monthly payment in the event of death or terminal illness so that your family can carry on with their lives without financial stress.
When it comes to determining how much cover you need, your broker can help with these calculations. They will assess your income and the future at any expenses that may arise. This could be everything from your children’s educational needs to the housing or care needs of your parents in later life.
What happens if you don’t have a will
In short, the process for managing your estate if you die ‘intestate’ (or without a will) is more complex for those you leave behind.
If you die with no property and less than $15,000 in assets your next of kin can distribute your estate between them. However, if you own property and have more than $15,000 in assets, the law requires formal administration to manage and distribute your estate.
Choosing who will take on this role can be a difficult decision for your family, fraught with differences of opinion and the potential for disputes. Once chosen, the administrator is then required to apply to the courts to take on this role. Often, the Public Trust will be called upon to administrate.
The administrator then takes care of all the paperwork, closes accounts, settles debts and taxes, and sorts out any other financial issues left behind. Once this is settled the estate is distributed according to the law. This can be a long and stressful process, with many delays.
When to get things sorted
The best time to make a will is now. Even if you don’t have much in the way of assets, the legal processes involved in settling a person’s estate can be very stressful to the family.
Anyone over the age of 18 can make a will. For most people, it is a good idea to seek guidance in the creation of the document, to ensure it has legal standing.
If anything in this article has brought up questions, please don’t hesitate to contact us to discuss your will and how it affects your insurance.
