Wills & Probate

Many people assume that family will naturally inherit their property, so there is no need to prepare a will. In reality, however, without a valid will an estate is not necessarily distributed in the way the deceased would have wished. The law decides who is entitled to inherit according to the relevant rules of succession, and those results may not reflect the person’s own wishes.

For people who own real estate, investment assets, a business, a family trust or who have complex family relationships, a lack of advance planning often makes administering the estate more complicated. Some families even end up in long-running disputes over how the estate is divided, increasing the cost of administration and straining family relationships.

The core purpose of wills and estate planning is not simply to deal with matters after death, but to arrange important issues that may arise in the future clearly and in advance, while you are still able to make decisions.

For this reason, most adults should think about how to arrange their property and affairs. Clear estate planning helps a person express their wishes in advance and reduces the uncertainty their family faces later when dealing with property, medical care, personal care and the distribution of the estate. For executors and beneficiaries, obtaining legal advice promptly also helps probate, estate administration and any estate disputes proceed more smoothly.

NS Legal can assist clients with wills and estates matters including will drafting, estate planning, powers of attorney, the appointment of enduring guardians, probate, estate administration, intestacy, will disputes and family provision claims.

Wills and estate legal services can usually be divided into three stages: lifetime planning, administration after death, and estate disputes.

Lifetime planning is about how a person arranges their property, legal affairs, medical care and family responsibilities while they still have decision-making capacity — for example, drafting a will, setting up a testamentary trust, arranging a power of attorney, appointing an enduring guardian, and dealing with superannuation, company shares, family trusts and business succession.

Administration after death is about how, once a person has died, the executor or administrator deals with the estate according to law — for example, applying for probate, collecting assets, paying debts, dealing with tax, selling or transferring property, and distributing the estate to beneficiaries in accordance with the will or the law.

Estate disputes usually arise between family members, beneficiaries, executors or other interested people — for example, where someone considers the will unfair, believes they have been left out of the estate, questions whether the will is valid, or considers that the executor has not properly administered the estate.

Why you need a valid will

A will is one of the most basic and most important documents in lifetime estate planning.

Through a will, you can specify who inherits the estate, who acts as executor, how particular assets are distributed, and, where there are minor children, who you would like to take on their care. For people with more complex family structures — for example, blended families, de facto relationships, stepchildren, overseas family members or children with special needs — the contents of a will usually need to be designed more carefully.

Without a valid will, the estate is dealt with under the rules of intestacy. The final distribution may not reflect the deceased’s wishes, and administering the estate may also be more complicated. For the family, having to deal with legal procedures and family disagreements while grieving and under stress often adds an unnecessary burden.

A valid will is not just a matter of writing down “who gets what”; it also needs to meet the signing and witnessing requirements and to match the person’s asset structure, family relationships and future plans. If the contents of a will are unclear, the signing is not done correctly, or it disposes of assets the will-maker does not actually own, disputes can arise later.

When a will needs updating

A will is not something you sign once and never look at again. When family relationships, assets or legal status change, an existing will may no longer reflect your current wishes.

Common situations where a will should be reviewed or updated include:

• marriage, divorce or entering a new partnership;
• the birth of a child or the death of a family member;
• buying or selling property;
• setting up a company or family trust, or running a business;
• changes to superannuation beneficiary arrangements;
• a significant change in your relationship with a beneficiary;
• moving overseas or holding overseas assets;
• wanting to change your executor;
• a will that has not been updated for many years.

Many estate disputes arise not because there was no will at all, but because the will was out of date — for example, it still named a former partner or a relative who has since died, or did not take into account children born later or newly acquired assets. If these issues are not dealt with during a person’s lifetime, they usually have to be faced by the family in the procedures after death.

A testamentary trust is a trust arrangement set up in a will that only begins to operate after the will-maker has died.

It is often used in more complex estate planning — for example, where you want to manage assets for minor children over the long term, protect a beneficiary who is at risk, build in more flexibility, or keep more structuring options for tax and the passing on of wealth.

A testamentary trust is not suitable for every family. Whether one is needed usually depends on the size of the assets, the age of the beneficiaries, family relationships, debt risk, business risk, tax arrangements and long-term succession goals. If the terms of a testamentary trust are not clearly designed, it can instead add to the difficulty of administration and to disputes within the family.

A will only takes effect after death. Where a person loses capacity during their lifetime, a will itself cannot resolve who is to manage finances, deal with legal documents, make medical decisions or arrange personal care. Complete estate planning therefore usually needs to consider other documents and arrangements as well.

Power of Attorney

A power of attorney lets you appoint a trusted person to deal with financial and legal affairs on your behalf in certain circumstances — for example, bank accounts, property transactions, contractual documents, investments and business matters.

If the document is an enduring power of attorney, the attorney can continue to deal with the relevant matters within the scope of the authority even if you later lose capacity.

Enduring Guardianship

An enduring guardianship lets you appoint a trusted person to make decisions about medical treatment, lifestyle, living arrangements and personal care if you lose capacity.

This kind of document is particularly important for older people, people living alone, people with a chronic illness, and anyone who wants to arrange their future care in advance.

Advance Care Directive

An advance care directive can help a person set out their wishes for future medical care in advance, providing guidance for family and medical staff, especially where the person is later unable to make decisions themselves.

Different documents address different issues. A will deals with the distribution of property after death; a power of attorney deals with financial and legal affairs during a person’s lifetime; and an enduring guardianship deals with medical, lifestyle and care decisions during their lifetime.

For people who have a family trust, company shares, a business or superannuation, estate planning usually cannot rely on a will alone.

Superannuation does not necessarily flow automatically into the estate; it usually needs to be arranged together with a beneficiary nomination (for example, a person’s will may say that their whole estate is to go to their children, but they may previously have nominated their spouse as the beneficiary of their superannuation — so the house, savings and so on pass to the children under the will, while the superannuation goes to the spouse under the beneficiary nomination). Assets in a family trust do not necessarily belong directly to a person’s estate either; this has to be assessed together with the trust deed, control arrangements and the trustee structure. Company shares, business operating rights and business assets may involve shareholders’ agreements, company constitutions, business loans, personal guarantees and succession arrangements.

If these matters are not dealt with in advance, you can end up in a situation where the will is written very clearly, but the actual assets cannot be distributed directly in accordance with it. For clients who run a business, hold investment property, have a complex family asset structure or want to protect the interests of the next generation, estate planning usually needs to be considered together with asset protection, testamentary trusts and business succession arrangements.

When a person dies, the executor is usually responsible for dealing with the estate. If the estate includes real estate, larger bank accounts, investment assets or other assets where an institution requires formal confirmation of authority, it will usually be necessary to apply for probate.

The function of probate is for the court to confirm that the will is valid and that the executor has authority to administer the estate.

If the deceased did not leave a valid will, the relevant people may need to apply for letters of administration, by which the court authorises a suitable person to administer and distribute the estate.

Estate administration usually includes confirming assets and debts, contacting banks and financial institutions, dealing with property, paying expenses and tax liabilities, dealing with superannuation or insurance proceeds, and finally distributing the estate to the beneficiaries. For an executor, this process carries both legal responsibility and the practical pressures of management.

If a person dies without a valid will, they are usually treated as having died intestate. The estate is distributed according to the order of succession set out in the law, rather than according to what the family afterwards believes “the deceased might have wanted”.

Where there is no will, who is entitled to apply to administer the estate, who is entitled to inherit, and how much each person receives all have to be determined under the relevant law. The more complex the family structure, the more difficult this usually is to deal with.

For example, blended families, de facto relationships, minor children, overseas relatives, or families where the relationship has broken down but still exists in law, are often more likely to give rise to disputes. Having no will does not mean the estate has no one to inherit it, but it usually adds to the cost and uncertainty of the process.

Estate disputes can arise before a will is signed, during the administration of the estate, or at the stage of distributing the estate.

Common disputes include:

• family members who consider they have been unfairly left out of the estate;
• beneficiaries who consider their share is insufficient;
• someone questioning whether the will-maker had capacity when the will was signed;
• someone considering that the will was the result of undue influence or pressure;
• disagreement over how the terms of the will should be interpreted;
• an executor considered to be delaying, showing favouritism or not properly administering the estate;
• disputes over the distribution of superannuation, insurance or trust assets.

Estate disputes often involve not only money but also long-standing family relationships, contributions to care, financial dependence and emotional conflict. Such matters therefore usually need to be considered with regard to the legal basis, the evidence and a practical path to resolution at the same time.

Two common types of issue in will disputes are family provision claims and disputes over the validity of a will.

A family provision claim usually arises where an eligible person considers that they have not received adequate provision from the estate. For example, a spouse, de facto partner or child, or in certain circumstances a person who was in a close relationship with the deceased and was dependent on them, may be entitled to apply to the court for further provision.

A dispute over validity usually focuses on whether the will itself is valid — for example, whether the person had testamentary capacity when signing, whether they understood the contents of the will, whether there was undue influence, or whether there were problems with the signing and witnessing of the will.

These two types of dispute have different legal bases and require different evidence. Whether it is appropriate to bring a claim, how to respond to the other side’s assertions, and whether to resolve matters through negotiation or mediation all need to be assessed on the specific facts.

NS Legal can provide wills and estates legal services according to the stage the client is at.

We can help clients to:

• draft, review and update wills;
• develop an estate planning strategy;
• draft powers of attorney;
• draft enduring guardianship appointments;
• assist with arrangements relating to advance care directives;
• set up or review testamentary trusts;
• advise on superannuation beneficiaries, family trusts and business succession;
• assist executors to apply for probate;
• assist with letters of administration where there is no will;
• assist executors to administer and distribute the estate;
• help beneficiaries understand their entitlements;
• deal with challenges to a will, family provision claims and estate administration disputes;
• help resolve estate disputes through negotiation, mediation or litigation.