About Wills

A will is a written legal document that sets out how the testator wishes their property to be distributed after death.

In our traditional thinking, the topic of wills tends to be taboo. In reality, however, making a will does not mean giving up on life, nor should will-making be something that only happens at the very end of one’s life.

Making a will is itself a positive process. In it, the testator formally designates the people who matter to them (the beneficiaries) and the specific property they wish to leave them; nominates the person who will carry out the will (the executor); and sets out any other directions (for example, whether the testator wishes to be buried or cremated).

Today we will discuss wills in Australia and look at how to make a valid will that complies with the law.

Why Make a Will?

A will is the only way to ensure your property is distributed the way you want. Without a will, the estate may pass to people the deceased would not have wanted to inherit — for example, estranged parents, or a separated but not-yet-divorced spouse. For more on this, see our earlier article on intestate succession.

A will makes life easier for the deceased’s family and friends. When a person dies, any existing arrangements made by or on behalf of that person — such as withdrawals from accounts or transactions conducted under a power of attorney — generally stop. Apart from paying funeral expenses, personal accounts are usually frozen after death. If there is a will in place, beneficiaries can access the estate more easily and avoid a lot of red tape.

Who Can Make a Will?

Anyone aged 18 or over can make a will. Generally, a will made by a minor (a person under 18) is invalid, unless one of the special exceptions set out in the legislation applies.

Capacity to Make a Will

The testator must have the capacity to make a will — in other words, the testator must have legal capacity. At the time of making the will, the testator must be of sound mind, memory and understanding. Put simply, the testator must:

know what a will is;

understand the amount and nature of their property;

be able to weigh up the “moral claims” they ought to consider when deciding whom to leave their property to;

and the testator must also know and approve the contents of the will.

Elderly or Unwell Testators

A will can be challenged on the basis that the person making it lacked sufficient capacity to do so — for example, if the testator was unwell or elderly and did not meet the capacity requirements set out above. The most effective way to avoid this is to make a will as early as possible, or, where the testator is elderly or unwell, to obtain a medical certificate from a doctor confirming testamentary capacity before making the will.

People with Intellectual Disability

For a person with an intellectual disability who clearly lacks the necessary testamentary capacity, the court may, on the application of any person, authorise a will to be made, altered, or wholly or partly revoked on behalf of a person who lacks capacity because they are a minor (under 18) or otherwise lack capacity.

Things to Consider When Making a Will

Before starting to draft your will, you should think about the following:

What property do you have?

Who do you want to leave your property to?

Who is a suitable executor?

Do you want to leave instructions about debts and funeral expenses?

Should you set up a trust, or leave the property outright?

Is there anything to consider about who will be the guardian of your children?

What kind of funeral arrangements do you want — burial or cremation?

What digital assets do you have — for example, social media accounts, Bitcoin?

How to Make a Valid Will

A will must comply with the relevant legislation. A valid will must satisfy each of the following requirements. If these requirements are not met, the will is taken to be invalid and the property will be dealt with as an intestate estate. The requirements for a valid will are:

(1) the will must be in writing, either typed or handwritten;

(2) the will must be signed by the testator, or signed by someone else in the testator’s presence and at the testator’s direction;

(3) the testator’s signature must be witnessed by two or more witnesses together;

(4) at least two of those witnesses must sign the will as witnesses in the presence of the testator;

(5) everyone who signs the will must have the intention to execute the will.

Who Can Be a Witness?

As a general rule, a beneficiary should not act as a witness — that is, a person who receives a gift under the will cannot sign the will as a witness. The spouse of a beneficiary can act as a witness. A beneficiary may act as a witness to the will in any of the following situations:

(1) there are at least two other witnesses who are not beneficiaries;

(2) all the beneficiaries consent in writing to that beneficiary acting as a witness;

(3) the court is satisfied that the beneficiary may act as a witness.

Residuary Clause

Every will should include a residuary clause. The residuary clause deals with any remaining estate that has not been specifically dealt with. Without this clause, part of the estate may end up being administered under the rules of intestacy.

Debts

Any debts must be paid before beneficiaries receive any part of the estate. In other words, the estate is used first to pay debts, and the remainder is distributed to the beneficiaries. There are specific rules about which assets can be used to pay debts. If you want to specify which asset your debts should be paid from, you should seek professional advice.

Overseas Wills

A will made overseas is generally also valid in New South Wales if it is valid in the country where it was made. However, this can involve complex legal issues, and if you have to make a will overseas, it is advisable to seek professional legal advice.

Informal Wills

Since 1989, the court has been able to treat a document as an “informal will” even where it has not been executed in accordance with the formal legal requirements. Many different types of documents have been accepted by the courts as informal wills, including audio recordings, unsent text messages, files on a computer, videos, and USB sticks. The document must purport to state the deceased’s testamentary intentions, where those intentions have not been given effect through a formal will. In other words, if the deceased leaves behind a document of a testamentary nature, it may be recognised by the court as an “informal will”, and the estate may be distributed in accordance with its contents.

Testamentary Trusts

Under a testamentary trust, the estate is not left directly to the beneficiaries. Instead, the will appoints a third party as trustee to hold the estate for the “ultimate beneficiaries” on the conditions set out in the will. If you wish to set up a testamentary trust, we strongly recommend that you engage a specialist lawyer to draft the will.

Reasons for setting up a testamentary trust include:

tax considerations;

where a beneficiary has an intellectual disability;

where a beneficiary has harmful habits, such as alcohol abuse, drug abuse or gambling;

where a beneficiary is under 18;

where the testator has more than one family.

The will can provide that the trust is to end on a specific date (for example, the death of a beneficiary) and can set out exactly who will inherit that beneficiary’s share in the trust. Alternatively, the trustee may be given the power to decide when the trust ends (in accordance with the law) and which beneficiaries will inherit the estate. In other words, if the testator is concerned about leaving the estate directly to a beneficiary who may not use it wisely, they may consider setting up a testamentary trust — a trusted trustee manages the estate and, through carefully drafted trust terms, the “ultimate beneficiaries” can continue to benefit from the estate over time.

Changing or Revoking a Will

A will remains valid until the testator formally changes or revokes it. A change in the testator’s circumstances does not mean the will has changed as well. The only exceptions are where the testator marries or divorces. Once a will has been signed, it cannot be changed by crossing things out or writing in new clauses. Changes made to the document have no effect. However, you can alter the text of the will before signing it. If you do, the testator and the witnesses must sign or initial next to the alteration or in the margin of the will. If this is not done, the court will treat the alterations as having been made after the will was signed, and they will not be effective.

Wills Revoked by Marriage

When the testator marries, the will is automatically revoked, unless the will was made in contemplation of (in anticipation of) that marriage. If you marry after making a will and that will was not made in contemplation of marriage, you should make a new will to ensure your testamentary wishes take effect.

When the testator divorces, the entire will is not automatically revoked; instead, only the provisions relating to the former spouse are partly revoked. Accordingly, if the testator divorces, they should make a new will rather than relying on partial revocation.

Conclusion

The above covers the key points about making a will in NSW. Although, traditionally, the topic of making a will can feel taboo, making a will should be seen as a routine legal step.

A properly made, valid will allows your property to be distributed according to your wishes, and helps avoid disputes and more complex legal procedures down the track.