We have discussed aspects of testamentary Wills over the past couple of months and have received a few more queries in response to our articles on the issue.  In this edition we will answer two questions which platinum members have raised.

Question 1:
I’ve recently split up with my partner.  We lived together for 8 years, but thankfully never married.  We’re now going through the process of dividing up our things.  I have a Will which I made in happier times and which gives her everything.  What are my options to make sure she does not benefit from this Will now that we have split up?

Answer:
Your question essentially asks how you can effectively revoke a Will.  There are a number of ways you can revoke your Will – some are less appealing than others. 

The most immediate way of revoking your Will is to destroy it.  You can literally tear it up.  The document you destroy must be the original, that is, the Will you signed, not a copy of it.  Whilst this may at first sound appealing and  be a satisfying thing to do, it can create problems.  If you do not get around to making another Will or if you lose the capacity to make a valid Will, then you will die intestate.  If you die intestate then the government will use a legally determined formula to decide who gets your assets.

The best thing to do is to simply make another Will which includes a clause revoking all previous Wills.  Your options here are either to draft a Will up yourself or get one professionally drafted. 

Homemade Wills can create disputes and ambiguity.  It is possible that your homemade Will could be challenged and declared either totally or partially invalid on a variety of technicalities.  Reasons for invalidity include; that you have not made your intentions regarding the beneficiary or the gift itself clear enough,  that you have not met the formalities required by the legislation or that you lacked capacity to make a Will at the time you made it.  Platinum readers can read on.

Governments have tried to enable courts to recognise some Wills that do not meet all of the formal legal requirements, but this is not as straightforward as it sounds.  Formal legal requirements include that there be a document signed and dated by the testator in the presence of two witnesses.  For a court to dispense with all of the formal requirements of a will it must be certain that the deceased intended the document in question to embody their final testamentary wishes.  This can be very difficult to prove.  If it can’t be proved then the document will not be considered as the person’s Will.

A recent example from Queensland shows how difficult this is.  Two weeks before taking her own life, a woman saved a document as her ‘Will’ on her home computer’.  There was evidence that she had printed a document, signed it and showed it to another person saying it was her new Will.  When she died the signed document wasn’t able to be found.  Even though the court acknowledged that the electronic document was probably the same as the one she had signed - this was not enough.  The court concluded that she had intended the printed document containing her signature to be her Will – not the electronic copy! 

As a result of this, a previous Will made by her was admitted as her last valid Will.  This previous Will had been made whilst she was in a defacto relationship and gifted her house to her partner of the time.  The relationship had ended by the time of her death, but under the terms of the Will her ex received her house.  In the electronic version written two weeks before her death, her ex wasn’t named as a beneficiary at all!

In another example of a homemade Will being struck down by the courts a person had left his estate on trust to be administered by his executors.  The estate was worth approximately  $3.4 million.  The Will made some specific gifts (worth less than $1 million) and contained a clause that the executors could administer the residuary to the beneficiaries of the trust as they saw fit.  The court disallowed this clause about the residuary as it did not identify the beneficiaries with certainty and allowed the executors too much discretion in administering the trust.  The failed portion was declared a partial intestacy and was then subject to intestacy legislation which dictated how the estate was to be divided up.

It is also worth noting that courts can – and do- order that costs of legal action be met from the estate.  This depletes the worth of the estate and is another example of where homemade Wills can result in the beneficiaries receiving much less than they would otherwise have done.

If you decide to have your Will professionally drafted there are two options.  Firstly, for more complex matters, a lawyer should be engaged so they can give legal effect to your wishes.  Civic Legal’s resident expert is Greg Mohen.  He is happy to help and can be contacted by email or by calling 08 9460 5000. 

For more straightforward Wills, LawCentral offers a build your own document service which has been put together to take account of all the legal requirements and considerations that need to be made to make a valid Will. 

LawCentral has developed four types of Wills which are tailored to specific situations.  These are:

• Single Person with No Children
  With this type of Will you are not presumed to want to divide your assets in any particular way.  You will need to nominate who you want to benefit from your estate and the way in which you intend them to benefit.

• Married or Defacto No Children
  This type of Will presumes you intend to leave all of your assets to your spouse.  It, like other Wills, gives you the option of making specific gifts to others. 

• Married or Defacto With Children
  This Will typically leaves all of your assets to your spouse and also makes provisions for your estate to go to your children in equal shares if your spouse dies before you.  It covers additional issues such as the age your kids can access the estate, your recommendations guardianship and also provisions for unborn children.

• Single Person With Children
  With this type of Will, it is presumed that you will want your children to be the primary and equal beneficiaries of your estate.  You can nominate specific shares for each of your children as long as the total adds up to 100%.  You also have the ability to make specific gifts to specific persons (not necessarily your children).

  If you do make different shares for different children you will need to be mindful that the child/children with the lowest share may try to challenge the will.  All states have varying legislation which allows a court to alter a will if it determines that an ‘eligible person’ has not been adequately provided for in a will.

  For the sake of completeness on our discussion of revocation, it is worth noting that throughout most of Australia, a Will is revoked on marriage and on divorce.  There are exceptions to these general rules including that a Will can remain valid if it was made in contemplation of marriage of divorce.  It is best to seek advice from a professional if you are considering making a Will that you would like to survive a subsequent marriage or divorce.

Question 2:
What happens if I make a Will leaving certain things to certain people, but then give those things away during my lifetime?

Answer:
As a general rule, if an asset or gift has already been distributed prior to someone’s death, then it is no longer in their estate.  Even if a Will contains a description of the gift and the beneficiary,  the gift will fail because it has already been given away.

Giving assets away prior to death has been seen as a way to avoid family members challenging a will.  It can and does work in most states.  However it also has its own problems. 

Unless you have a terminal illness or are contemplating suicide, it is generally impossible to determine your date of death.  If you give away significant assets during your lifetime then you may become financially strained if you live a long life.  Additionally, the person you give the gift to may be liable to pay taxes on that gift or if they are on a pension, their pension may be reduced due to the gift.

It is also worth noting that this is not a certain way of defeating an inheritance claim in New South Wales.  NSW has legislation that allows a court to invalidate gifts made in the last two years of a person’s life if the intention was to defeat a potential inheritance claim.

• Will - Married or Defacto No Children
• Will – Married or Defacto With Children
• Will – Single No Children
• Will – Single With Children

• Issue 416:  Family loans, family favourites and family fallout!
• Issue 415:  Hey Dad, best buddy.  Can I borrow some money?
• Issue 414:  Time is ticking:  Make a minute or lose a pile
• Issue 413:  A win for common-sense
• Issue 412: SMSFs beware:  it’s only partly your money

A parting word
At LawCentral we like getting questions from our readers on issues we have written about.  Please don’t hesitate to contact us if you have a query about something we have written or a would like to suggest something we could write about in the future.