The top 10 myths and misconceptions about wills
Let this thought sink in for a moment: only about half of Australians have a legal will.
There are many reasons for this alarming statistic and it would appear that most of them are based on misunderstanding the critical importance of wills.
A will is the only proper way that you can determine how your assets are distributed the way you want after your death.
So why on earth do so many Australians not bother to have a will?
Our experience tells us that there are at least ten myths and misconceptions people have about wills:
Myth 1: “I don’t need a will”
This is the most common thing people say. Perhaps it is because they are young, don’t have significant assets, and have the belief that they will not die. Even if you have no bricks and mortar assets, the vast majority of Australians will have superannuation, and a will is still the most effective way in which you can predetermine whom you wish your superannuation death benefit to go to.
Myth 2: “I won’t be around so I don’t need to think about it”
People are sometimes too fatalistic about ordering their affairs in life and people don’t want to think about the prospect of dying. I call this “reckless optimism”. Imagine the dreadful mess you will leave behind for your loved ones if you don’t have a will! Dying without a will means that your assets are divided according to a statutory framework, meaning you and your family will have no legal say.
Myth 3: “Making a will is expensive”
Certainly, the more complex your personal and financial circumstances are, the more expensive will be your will and estate planning requirements. But for the average person, a will is not costly at all and likely to be a good deal cheaper than the cost of a year’s car insurance – about $300 – and it’s a one-off expense! In the scheme of things, given the critical importance of having a will, their cost is negligible.
Myth 4: “Making a will is tempting fate”
One of the craziest things people say about making a will is that it means that they are contemplating death or that it’s bad luck – somehow the mere fact of signing a will is like walking under a ladder or crossing the path of a black cat! People are often motivated to make their will if they are faced with a potentially life threatening operation or if they are going on an overseas trip. But making a will should be a routine thing that you need to review annually as with reviewing your insurances.
Myth 5: “I don’t need a will because I am married”
People think that if they’re married their assets will automatically go to their spouse on their death. Though this may be true in relation to joint assets, it will never be true in relation to assets you own solely. If you die without making a will any sole assets are divided between your spouse and children and if your children are under 18 their share will be controlled by Public Trustee. A disaster for some!
Myth 6: “What’s the point of making a will? It will be contested anyway”
There’s no way of guaranteeing that if you make a will it won’t be challenged on your death. But this is much less likely to happen in cases you make a legal will (as opposed to a will kit will or homemade will) which is based on careful consideration and expert advice. A lawyer will explain what you need to have in your will to avoid or reduce the risk of conflict in your family or loss to your estate.
Myth 7: “But I’ve already made a will”
Perhaps you have made a will years ago but have forgotten where you’ve put it or what exactly it says. You might think it will still be effective. But if it’s lost or out of date, it will be very difficult to have your will proven in Court as your last will, or may not serve the needs of your estate. There are certain circumstances in which a will ceases to have effect: e.g. on marriage. Thinking you made a will once but being careless about where will is or what actually says is courting disaster.
Myth 8: “I’ll just use a will kit when I’m ready”
Sure, will kits you can buy from the Government stationers are very inexpensive (about $30) but even if you are used with the utmost care in terms of their wording or execution there can be unexpected errors or complications which can potentially add thousands of dollars to your estate which could have been avoided if you had got your will done professionally.
Myth 9: “But I’ve got a Power of Attorney. That’s enough!”
Contrary to popular belief, a Power of Attorney has no legal operation once you die, so your Attorney cannot do anything about your estate. Having a Power of Attorney to deal with your affairs while you’re alive is an important element of your estate plan, but any estate plan is incomplete if you don’t have an up to date will which appoints an executor to deal with your affairs after you die.
Myth 10: “The Government will get it all”
If you don’t have a will, the Government will not get your estate, unless you have no relatives. But as explained above, if you don’t have a will the Government may have some role in managing part of your estate if you leave children under 18 to the extent that part of your estate will be managed by Public Trustee. Not an ideal situation which could have been avoided if you can have a say to ensure the Government does not have to get involved in your private affairs.
Still not convinced? If you haven’t made a will, or if you have made a will but it was some time ago, then you really need to seriously think about making a will and taking stock of your estate planning needs generally. Give us a call on 8237 0559 or email us at email@example.com.