Are you one of the 54%?

Posted: December 22, 2009

Whilst you may not like to talk about death, making decisions about what happens to your assets when you die is an important first step. The second step is to complete the documentation - such as having a Will and arranging an executor - to make sure your wishes are followed when you die.

Having a Will is the most basic requirement of estate planning. You can arrange your own Will with a DIY kit or use the services of a professional. There are special rules to be followed to ensure that a Will is valid and properly completed and witnessed. We recommend that our clients seek expert advice.

If you do not have a Will or your Will is invalid or incomplete, your assets will be distributed under the intestacy rules. Each state of Australia has their own legislation but gradually the laws are being ‘harmonised'. Recent changes in NSW updated the Succession Act and the Family Provision Act.

The Succession Act sets out what happens if you die without a will. A Law Commission survey showed that 75% of people leave their estate to their spouse and the new Act adopts that principle. A spouse can include someone who lived with you in a domestic relationship. If you have a spouse and children from that relationship, all your estate will pass to your spouse. The rules get more complicated where you have multiple relationships and children from different relationships.

The Family Provision Act allows someone to contest your Will if they believe you have not provided adequately for them. To be eligible the person must have been a dependant at the time of your death or someone who lived in a close personal relationship with you. The new Act requires any claim to be made within 12 months from the date of death and requires the claimant to enter into mediation.

Of course, if you have an effective estate plan and have discussed it with your family and dependants, this new legislation will not affect your family.