Modern estate planning can be quite complex due to the increase of blended family cases. As a result, we’re seeing the incidence of estate disputes increase in direct proportion. Often we find that people think they have good estate planning in place, but the sheer complexity of their situation means that mistakes are being made. This is especially true where people make their own wills without a thorough understanding of the law involved. As a result, the wills are being contested in court, which is a time-consuming and costly exercise for all parties concerned.
In each of the states of Australia, the law casts an obligation upon a will maker to make adequate provision for certain persons. The definition of ‘certain persons’ differs from state to state. In Queensland, a will maker ought to make adequate provision for the following persons:
· Spouse;
· Former spouse (in limited circumstances);
· Child;
· Step-child;
· A dependent (in limited circumstances).
Examples of cases where people can make a claim include:
- You are the spouse of the person who passed away and believe that the will did not provide for you. You have the right to make a claim to the court asking for fair provision from the
will. - You are the child of the person passed away, and believe that the will did not provide for you. You have the right to make a claim to the court asking for fair provision from the will.
- The estate of the person who passed away is smaller than you remember. Disputes can arise if a person believes that some assets have been removed from the estate.
- When the person made the will, they may have been influenced by another person, and have changed the will suddenly.
- The deceased person made certain promises to you about the will that failed to eventuate.
- At the time the Will was drafted, the deceased may have been incapacitated. The presence of a cognitive decline, such as dementia, can lead to estate disputes because the will has been amended or lost.
- The will was a do-it-yourself will and doesn’t make sense.
- The executor is not meeting his or her obligations.
Tips for Effective Modern Estate Planning
The first and most important step would be to get specialist legal advice to create a will. A specialist in wills and estates know this area of complex law thoroughly, and will be able to ensure that you don’t make any mistakes, that you have adequate flexibility and that the taxation is minimised. A specialist will also be able to identify any cognitive decline or flag any potential abuse of a will-maker, which may make any will written invalid.
Communication is always key in modern estate planning. It’s always best to arrange a meeting with your family so they all feel as if they have a say in your estate plan. It is far better to have any potential conflict while you’re still alive that for your family to battle it out in court after your death. Your family will then feel prepared in knowing what will happen when you pass away. This could also reduce the risk of your estate being contested in court as they have now had a say in what they believe should happen. You could also invite your lawyer along to this meeting to take notes and better help you plan your will.
Modern estate planning has financial implications, which is why we recommend that you see a specialist in this area of the law. A specialist can help you decide how to best financially set up your will. There may be some tax effective strategies to ensure that your beneficiaries don’t get taxed on their assets of income. You may also wish to consider a testamentary trust for added flexibility.
When creating your will, ensure that you have carefully chosen an executor and power of attorney. Executors of an estate have an obligation to engage in the due administration of the estate. Enormous obligations are cast upon an executor to gather in the estate, pay all testamentary debts and expenses and to distribute the estate in a correct and legal way. It is not an easy role. A power of attorney can be someone who will make decisions on your behalf if you ever become unable to due to a decline in mental capacity. This can be your spouse or whoever you prefer. Nominating this person will ensure that you are best taken care in case of an accident or unforeseen situation.
Another important element is to start considering your super. Your super does not initially form a part of your estate and you cannot plan for it in your will. To name a beneficiary for your super, you must have a death benefit nomination. These are highly important and you should immediately contact your super to ensure it will go to the right person on death. Estate planning can be difficult, so it is best that you seek legal advice to better ensure you have a solid plan for when you pass away. The last thing you want is for your estate to go to plan because the right steps were not followed.
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