Is a simple will enough to protect your wishes? People often approach us wondering whether it would be sufficient for them to use an off the shelf, or very simple will. “After all”, they say,
“ my asset situation is very simple”.
In this thought-provoking article, Senior Associate Anne Goodrick identifies some of the reasons why sometimes a more detailed will may be necessary.
“Keep it simple”-is a popular mantra but is it appropriate for willmakers? Life is not always simple, and planning for your family’s future without you will sometimes need more than a “simple will”.
It’s not an exact term – but a “simple will” usually means one where assets are left directly to beneficiaries so that they receive them following administration of the will in their personal name and capacity and those assets are then theirs to hold, give away, lose, pay tax on and so on. In many cases that is all that is required and so such a will is relatively straightforward to draft and to administer.
But what if your affairs are somewhat more complex, or there is the possibility of complexity in the future? If any of the following points below need to be considered in your will, a more complex will may be required:
- you have young children whose long-term care and expenses need to be catered for,
- you have children from more than one relationship,
- you have more than one spouse (you may be legally married to one, and in a de facto relationship with another),
- you have concerns about a beneficiary’s personal relationships including possible separation from a partner or spouse,
- you have beneficiaries with disabilities,
- you have concerns about beneficiaries who are not able to manage their finances and may fritter away an inheritance,
- you have concerns about beneficiaries who may be inappropriately influenced by others or who may be incapable of making decisions due to drug or alcohol dependency,
- you have assets that may attract capital gains tax on realisation, or
- you’ve given loans to some beneficiaries and wish to equalise arrangements between beneficiaries in your will.
If any of those considerations are relevant then a more complex will may be required, and in many cases such a will may incorporate provisions such as-
- appointing guardians for infant children and making financial arrangements for their care until they come of age (or perhaps for longer),
- utilising specific assets for specific beneficiaries to achieve better tax outcomes,
- permitting certain beneficiaries to live in properties either for a specific time or for life and dealing with the arrangements necessary to maintain such properties,
- giving a second or later spouse a residence right but preserving the underlying capital value of a home for children from an earlier relationship;
- allowing an income stream to certain beneficiaries whilst maintaining the capital for others, or
- holding beneficiaries inheritances in a discretionary or protective trust structure so as to provide asset protection for high-risk individuals, income streaming and some tax benefits for beneficiaries with minor children.
Talk to one of our estate planning lawyers and they’ll make the complex simple!