DIY Will Kit
Should you use a DIY Will kit?
Should you use a DIY Will kit? If you currently have some form of Will, congratulations! You are already ahead of around half the population, who don’t have one at all. While having a Will might be better than nothing, the harsh reality is that many Wills are inadequate, out of date, and not very effective documents for giving proper and fair direction over your assets when you’re gone.
It is very easy to make simple mistakes on a Will, which can have far reaching effects in how your assets are divided. Add complicated issues such as estranged spouses, step children, family conflict, or unresolved property settlements, can leave your estate open to all sorts of unwanted outcomes.
What happens if you die without a Will?
If you don’t have a Will, your estate will have a standard formula applied to it with prescribed percentages of assets being directed toward your spouse and children. This formula varies from state to state.
For those who don’t want the state to distribute their inheritance — or who don’t want to leave things to chance — a Will is essential, but it needs to be properly structured and accurately drafted to take care of all contingencies.
Will a DIY Will kit do the job?
Making your own Will using a DIY kit from the local post office may seem like a quick and easy way to take care of your situation. After all, you know best about what you want to do with your assets, so why not just do it yourself? While this may seem like the obvious choice, the problem is that translating your wishes accurately can be complicated.
A DIY kit may be a suitable option in the most simple of cases, but the reality is that your situation may not be as simple as you think.
What are the traps to watch out for?
- Debts you have, don’t die with you. Your estate is responsible for paying them and if you haven’t made provision in your Will for their payment, this can cause problems. This is especially true if you have left different assets to different beneficiaries but you haven’t accounted for a debt that may exist over one of those assets (such as a mortgage on a property). This can end up throwing your intended bequests out of balance.
- Taxation is another factor that often gets ignored with a DIY approach. In particular, capital gains tax can have an impact when asset values are realised by whoever is receiving the asset.
- If you bequest assets that you don’t actually own outright or which are subject to other legal constraints, such as family trusts or property jointly owned with an estranged partner, complications can arise.
- Superannuation is distributed at the discretion of your super fund trustee. They may take your Will into account but there will be other factors they will need to consider such as adequately providing for your dependents.
Choosing an executor
The natural inclination for many people is to appoint a close, trusted friend or family member as the executor of their Will. This may seem logical in terms of making sure your wishes are carried out faithfully, but can have some unintended repercussions. A person may be trustworthy, but may not possess the required financial understanding or skills if things get complicated — or challenges to the Will are made.
To avoid such a problem and to remove any potential conflict of interest, it may be preferable to appoint an independent and objective executor.
Advice can be vital
All these issues add up to a considerable risk if you pursue a DIY Will option. The best alternative is to get some expert advice. Qualified professionals can pre-empt family and financial issues to help you build a Will that is resilient and robust enough to take care of any contingencies, threats, and disputes.
A solicitor can take care of the legal side of things, and a financial planner can offer invaluable advice on the financial aspects of how your Will deals with your investments and superannuation.
Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.
This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.
Examples are illustrative only and are subject to the assumptions and qualifications disclosed.
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In referring customers to Bridges, Maleny Credit Union (MCU Ltd trading as) does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.