FAQs
Why do I need a Will?
If you don’t have a Will, you have made a plan (of sorts) to let the Government, through law making, decide what happens with your assets.
The first ‘decision’ is who is in control of things for you when you die. In some situations (like those in the case studies), the person the law appoints to be in control is not the person you would want to be making choices about your funeral or personal belongings.
The next ‘decision’ you let the Government make for you if you don’t have a Will is how your assets are passed. The laws of intestacy outline how assets pass if you die without a Will. Even people who don’t have many assets in their personal name may be surprised to find out how much their estate is worth once superannuation and life insurance are paid out.
Making a Will, even a simple one, can give you confidence that the people you want are in control of the process after you die, and that any assets you have will pass the way you intend.
What is Probate?
“Probate” comes from the Latin word ‘provar’ which means “to prove”. It’s essentially the process of proving that the Will is valid, and that the person to whom Probate is granted is the appropriate person to be giving instructions in relation to an Estate.
Probate isn’t always needed. It is generally required by a financial institution when the deceased person held more than around $50,000.00. This is based on a risk assessment by the relevant institution.
Think about it – many people make more than one Will during their life. Let’s say Amy dies, and Bianca goes into the bank with a copy of Amy’s death certificate and Will. The Will names Bianca as the Executor, so the bank takes Bianca’s instructions to close Amy’s account and pays out the money from the account into Bianca’s nominated estate account. The next week, Charlie comes into the bank with a copy of Amy’s death certificate and a later Will, which names Charlie as the Executor. Charlie sues the bank for handing over Amy’s money to Bianca.
The process involved in Probate gives the bank an assurance that they are dealing with the right person – the person who has the latest Will.
When a person dies with minimal assets, the banks (or other financial institutions) will sometimes just take a risk that they are dealing with the right person. In this case, they are happy to accept a certified copy of the Will, Death Certificate and some forms (usually including a small estate indemnity). This can be a good reason to do a Will even when you have minimal assets – without a Will, even a small estate may sometimes require a Grant of Representation from the Court (Probate office) to confirm who has authority to sign the form and give instructions.
My Mum didn’t have a Will. The bank says that they just need a Letter of Administration. Who can write the letter?
Letters of Administration is a lot more than just a ‘letter’. The process is essentially the same as the process for a Probate application, but as there is no Will, the person in charge is not called an Executor (they are not ‘executing a Will’); they are called an Administrator (they are ‘administering an estate’).
What is the process for getting Probate or Letters of Administration? Why does it take so long?
The application for a Grant of Probate or Letters of Administration involves lodging certain documents with the Probate Office, which is part of the Supreme Court of Victoria. In both cases, the application needs to exhibit a certified copy of the death certificate, as well as a list (Inventory) of the assets and liabilities of the deceased at the date of their death. The application for a Grant of Probate needs to include the original Will, and an application for Letters of Administration includes an affidavit of the person who would be legally entitled to administer the Estate, outlining the basis upon which they believe the deceased did not have a Will, and any attempts they have made to try to find one.
In terms of timing, usually the first step is to wait for the death certificate. This is often applied for in collaboration with the funeral director, and may take 1-6 weeks to be issued. If there in an enquiry into the cause of death, it may be much longer.
Once the death certificate is issued, an advertisement is lodged with the Supreme Court to advertise your intention to apply for either Probate or Letters of Administration. You cannot lodge the application until at least 14 days after the advertisement.
The Probate Registrar then considers the application, and may ask additional questions to confirm the validity of the Will. In particular, if there are any elements about the signing of the Will that d not meet the formal requirements for a valid Will, an affidavit of due execution may be required. Or, if the person died shortly after signing the Will, or the death certificate indicates a mental impairment (such as dementia), the Probate Registrar may require an affidavit of testamentary capacity from a medical practitioner. These types of concerns may add to the timeframe for the Grant to be issued.
Once Probate or Letters of Administration are granted, there is a 6 month period during which an eligible person may lodge a claim for further provision from an Estate. If the Executor or Administrator of an Estate distribute assets during this time, they run a risk that they may end up personally paying out the claim. For this reason, many Executors/ Administrators choose not to distribute the assets from an Estate until this “risk period” is over. This may mean it is 9-12 months after the death before the assets are actually released to the beneficiaries.
I want to leave someone out of my Will. If I leave them a nominal amount, does this mean they can’t contest?
In short, no. Anyone who meets the eligibility criteria can claim provision or further provision from an Estate, regardless of how much they are left in the Will. The real question is what was the moral obligation to provide for them, and has this obligation been met by the provisions of the Will. This is different depending on the situation. A Will does not have to be “fair” or equal – it just has to make the appropriate provision for the circumstances. In many cases, it’s a bit of a balancing act – it may be a matter of balancing the interests of a current spouse/partner vs children from a previous relationship, or the interests of a child with a disability vs other more financially independent children.
In Victoria (and be careful, because this does not apply in all States!), if you are trying to leave someone out of a Will, sometimes the strategy may involve trying to minimize the assets that will be in your sole personal name when you die, by restructuring during your lifetime. It is important to get very clear advice about your options and the impact of these options, before making a decision. There can be very significant tax consequences, depending on the assets involved.
What is a testamentary trust?
A testamentary trust is, quite simply, a trust set up by a Will. There are lots of different types of testamentary trusts, but the most common is known as a ‘beneficiary controlled testamentary trust’ or it may also be called a ‘testamentary discretionary trust’. Essentially, this type of trust is very flexible, but still offers quite good asset protection and tax effectiveness to the intended beneficiaries. For more information about testamentary trusts, please contact our office.
If a Will can be contested, what’s the point of making one?
Most Wills are not contested, so it’s definitely better to have one, than to not. Even for those Wills that are contested, the Will is the starting point, and people who are claiming for additional provision need to demonstrate why the Will should be altered.
How much does it cost to make a Will?
Please check our pricing page, or contact our office. Sometimes, even where you think your Will is going to be simple, there are complexities (for example, if you have an interest in a private trust or company) that need to be considered and addressed. We generally operate on fixed pricing, but the best way to determine the cost for your documents will be to make an appointment for an initial strategy meeting. This is charged at a fixed rate of $220. The strategy meeting will provide us with all of the information we need to give you clarity around the costs involved in your estate plan.