Components to consider when making a Will.

IMPORTANT COMPONENTS OF A WILL

1.   Executor

One of the most important decisions is who should be the executor of your Will.  The Executor is the person who oversees the estate and the legalities of your estate upon your passing.  They are responsible for things such as funeral, safeguarding and collating assets, payment of estate liabilities and possibly then administering the Will (distributing to beneficiaries or trusts).

It is important that your executor is rationale and has sound judgement as they have all the abilities of a natural person, including the ability to sell your assets.

Accordingly the appointment is important and can be made to anyone over 18, which is often a spouse or family member, or possibly in conjunction with a trusted professional advisor, such as your lawyer or accountant.

You can appoint more than one person to act as your executor.

2.   Guardians of minor children

If you have minor children, you will need to appoint a legal guardian for those children.  A guardian has the responsibility of making the health care and wellbeing of your child which includes their upbringing and education.  They will step into your shoes to continue to raise your child.

3.    Gifts

Typically this section is reserved for items of personal adornment, jewellery, specific items to give to children, grandchildren, family members or of your choosing.  If you do not have anything in particular from your estate you wish to give then your estate will fall into the residue.

4.  Assets / Liabilities

Inherit with giving a gift, follows its liabilities.  Therefore consideration needs to be given as to the net asset position of your estate. For example, if the house is mortgaged and cannot be serviced if you passed away and you give the house to your spouse, they may not be able to afford to remain there if the house was encumbered, even though you may have wished for them to. 

Accordingly relevant insurances should be in place to ensure that you haven’t given your beneficiaries a ‘poison chalice’ by also giving them an unserviceable debt level with the gift.

5.  Residue

The residue is everything left that isn’t specifically gifted.  This will include any and all of your remaining assets.  You need to give consideration as to who is entitled to receive benefit from your estate (ie your spouse and family) and decide in what proportions the estate will be given.

Residue can be given in a standard / simple format (ie upon turning a certain age), or by a testamentary trust.  Refer to the appropriately titled Practical Edge Testamentary Trust information sheet / article for more information in this regard.

6.  Superannuation / Life Insurance / Company / Discretionary Trust / SMSF

Any legal entities outside of your personal name are not automatically (and sometime not even able) to be dealt with via a Will. 

A Will can only deal with your personal estate.

If you own or operate any other entities then consideration needs to be given to the governing document of that entity or policy and are addressed separately to your Will.  Each entity has its own set of guidelines and its own way of being addressed.  Collectively they work in conjunction with your Will to ensure all your assets and estate are passed on correctly and in accordance with your wishes.

Want to know more?

This is a brief overview of considerations to a Will and by no means are legal advice or an exhaustive list of considerations. 

Estate planning is not a simple matter and is often complex, particularly if family dynamics are not straight forward, or you are in control of other entities such as companies, discretionary trusts or self-managed superannuation funds.

Consideration also needs to be given to enduring powers of attorney and enduring powers of guardianship (for more information on those see the relevantly titled Practical Edge information sheet / article on those documents).