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Issues to Consider when Making Your Will

Making a will is one of the most important things you can do to ensure that your loved ones are properly provided for in the event of your death.

Obviously, the primary purpose of a will is to ensure that your estate will pass to your intended beneficiaries.

The purpose of this article is to provide you with information about some of the issues you should consider when making your will.

Executors

One of the most important issues that needs to be considered is whom to appoint as your executors.

The role of an executor is to administer your estate following your death. This involves collecting your assets, paying any debts owed by your estate, and distributing the estate to your beneficiaries in accordance with the terms of your will.

When choosing your executors, you should only appoint people in whom you have complete trust and confidence. The people you might consider appointing could include family members or close friends. However, you might prefer to appoint trusted advisers such as your lawyer and/or accountant. Alternatively, you could consider appointing the Public Trustee or a private trustee company as the executor of your estate.

If you appoint a professional person as your executor, you should consider whether to include a clause in your will authorizing that person to make their usual professional charges to act in that capacity.

If you wish to appoint the Public Trustee or a trustee company as your executor, you should investigate the likely fees that would be charged.

You also need to consider how you want your executors to act. We strongly recommend that you appoint more than one executor, in case one of the persons appointed is unable to act or continue to act for some reason. You can have up to four executors at any one time.

We would happy to discuss your options for the appointment of executors with you.

Arrangements for your funeral

If you have any particular wishes regarding your funeral, we recommend that you include a clause in your will specifying those wishes.

This could include a statement of your wishes regarding burial or cremation, or other wishes regarding the location, religious denomination or content of your funeral service.

Organ donation

If you have any particular wishes regarding organ donation, you should consider including a clause in your will specifying those wishes.

This might be a clause expressly stating that you do not want to be an organ donor, or that you are an organ donor, or that you only want your body or organs to be used for particular purposes.

We would be happy to discuss your wishes in this respect as part of our estate planning work for you.

Guardianship of minor children

If you have a child or children under the age of 18 years, you should consider who should look after them if you die before they reach adulthood.

Part 5A Succession Act 1981 (Qld) provides for the appointment of one or more guardians of minor children in your will. If you choose to appoint two or more guardians, they must act jointly.

If you are the last surviving parent of a child under the age of 18 years, the appointment of a guardian in your will takes effect immediately upon your death.

If you are survived by the other parent of the child, then the guardian’s appointment only takes effect immediately on your death if your will specifies that this is your intention. If you will does not specify this, the guardian’s appointment will only take effect on the death of the surviving parent. It is important note that, if you are survived by the other parent of a child, then that parent has the right to apply to the Supreme Court for an order that the appointment of a guardian in your will be revoked or suspended.

A guardian appointed by will has the powers, rights and responsibilities provided for by the law for making decisions about the long-term welfare of a child.

However, a guardian appointed by will only has daily care authority for a child if there is no surviving parent and nobody else has been given daily care authority by a court order.

When considering the appointment of a guardian in your will, you should appoint someone in whom you have implicit trust and confidence that they will do the right thing in raising your children.

You should approach anyone you intend to appoint as a guardian in your will to check that they are willing and able to act if required.

We would be happy to discuss your wishes regarding the guardianship of your children as part of the process of preparing your will.

Substitute gifts

Obviously, it is to be hoped that your intended beneficiaries will all survive you and receive the gifts you leave to them in your will.

But you should also consider what should happen to the gift in the event that a beneficiary fails to survive you.

Section 33N Succession Act 1981 (Qld) provides that if you leave a gift to a person or class of persons who are your ‘issue’, then in the event that person or any of those persons fail to survive you for 30 days, the gift will pass to their issue.

This may or may not accord with your wishes. Accordingly, it is important that you consider whether you want this provision to operate. If not, then we can assist you by incorporating an appropriate clause into your will specifying how you want any gifts to your issue to be dealt with in the event that your intended beneficiary fails to survive you.

You should also consider how you want any gifts to persons other than your issue to be dealt with in the event that your intended beneficiary fails to survive you.

We would be happy to discuss your wishes in this regard with you in the process of preparing your will.

Gifts to charities

You might wish to make one or more gifts to charitable organisations in your will.

If you want to make such a gift, then it will be necessary for the gift to be worded appropriately to ensure that it complies with the requirements for a valid charitable gift.

It is also important, if you want the gift to be used for a particular purpose, for this to be clearly stated in your will.

We would be happy to discuss your intentions regarding charitable gifts with you as part of the process of drafting your will.

Limits or conditions on gifts

Another important consideration in making your will is how your intended beneficiaries should receive the gifts you are leaving to them.

Most gifts are absolute – that is, the beneficiary is entitled to receive the gift and deal with it as he or she sees fit

However, there may be circumstances in which it is undesirable for a beneficiary to be absolutely entitled – for example, where he or she is young, or suffers from a drug or alcohol addiction, or is simply not good at managing money.

Depending on your circumstances, you might wish to consider imposing limits or conditions on gifts to particular beneficiaries, such as:

  • a right of residence in a particular property, rather than an absolute gift of the property;
  • a life interest in a particular asset under which the beneficiary can have the benefit of the use and enjoyment of the asset during their lifetime, with the asset then passing to other beneficiaries on the termination of the life interest; or
  • a requirement that the beneficiary of a gift attain a particular age before being absolutely entitled.

Imposing limits or conditions on gifts can assist in ensuring that assets are used for a particular purpose, and reduces the risk of an inheritance being squandered by an improvident beneficiary.

We can assist you in drafting appropriate clauses into your will if you wish to include limits or conditions on the gifts to your beneficiaries.

Testamentary discretionary trusts

Another important consideration is whether a testamentary discretionary trust in your will.

A testamentary discretionary trust is a mechanism by which an inheritance can be kept separate from the personal assets of a beneficiary, which provides benefits in terms of asset protection and tax advantages.

Testamentary discretionary trusts have advantages but there are also potential disadvantages. It is important that you understand these before making a decision on whether to incorporate a testamentary discretionary trust into your will.

We would be happy to advise you on whether a testamentary discretionary trust is appropriate to your circumstances as part of our estate planning work for you.

To find out more, please read the article 'Testamentary Discretionary Trusts'.

Superannuation

Did you know that your superannuation does not automatically form part of your estate in the event of your death?

In the event of your death, the trustee of your superannuation fund usually has discretion as to how your superannuation is to be distributed. The trustee can decide to distribute your superannuation to your estate, or to any surviving spouse, children or dependants, or a combination of these.

Depending on the terms of the deed governing your superannuation fund, you may be able to bind the trustee of your superannuation fund to distribute your superannuation in a particular way in the event of your death.

Depending on your circumstances, it may be appropriate to implement a binding death benefit nomination so that you can be certain that your superannuation will be dealt with in the way you want.

There are potential advantages and disadvantages to making a binding death benefit nomination, and these are discussed in more detail in the article 'Binding Death Benefit Nominations'.

We would be happy to discuss your individual circumstances with you and provide you with advice as to your options.

We can also prepare the documents required to implement a binding death benefit nomination if you decide to make one.

Control of trusts and self-managed superannuation funds

If you have an existing family trust or a self-managed superannuation fund, you will need to consider how it should be managed in the event of your death, and by whom.

When considering whom to appoint as your successor as trustee and/or appointor of a trust, you should appoint someone you have complete confidence will administer the trust in the best interests of the beneficiaries.

We can help you review the provisions of the trust deed to determine how the process of transferring control of the trust will operate on your death.

We can also prepare the documents required to ensure that control of the trust is transferred in accordance with your wishes following your death. Depending on the terms of the trust deed, you may be able to appoint a successor trustee and/or appointor by your will. If this is not provided for in the trust deed, then it may be necessary to execute a deed of variation.

For assistance regarding these and other estate planning issues please contact Clayton Hellen of our office on 07 3009 8458 or c.hellen@rclaw.com.au.

Clayton Hellen
Senior Associate

supervising partners

Gavin McInnes

Partner
Office 07 3009 8444
Email g.mcinnes@rclaw.com.au

lawyers

Clayton Hellen

Senior Associate
Office 07 3009 8444
Email c.hellen@rclaw.com.au