If you’re like most people with a family, chances are you’re doing all you can to make sure your spouse and children will be financially secure when you pass on; you work hard, you save, you invest – but you might have overlooked one very important tool in the process of securing your loved ones’ future: a Will.
Assuming that everything you earned throughout your life will automatically be inherited by your family members is a common mistake; if you die without leaving a will (or ‘intestate’) the law will decide how your assets should be distributed. By simply writing a will, you’ll ensure your belongings are divided among your chosen beneficiaries. The estate administration process will also be accelerated if you nominate an executor in your Will; if left to the high court to appoint an executor it could take months, possibly leaving vulnerable family members without income.
Besides certainty and convenience, there are number of other advantages to having a Will:
Wills limit family disputes: A clear, well-written Will can ensure that family arguments over your estate are avoided. In rare cases, the courts may allow a Will to be contested, but there must be reason to believe that the Will is not valid.
Wills clearly state preferences: As well as indicating who will receive what, a Will can also outline how you would like certain assets to be used. For instance, you could leave your antique car to your son, stating that you’d like him to sell it to pay for his education. However, such indications are not legally binding.
Children’s guardians are named in Wills: Unless you name who you want to take care of your children in your Will, the state will determine who will have guardianship.
You can provide for heirs with special needs: If you pass away when your beneficiaries are too young or immature to manage their inheritance, a Will can insist on assets being placed in a trust that limits their access until they are a certain age. Provisions can also be made for elderly relatives and those with special needs.
What happens if I die without leaving a will?
As mentioned, your assets will be distributed among your blood relations in terms of legislation. Also, the appointed guardians of minor children may not be who you would have chosen, or your children may be taken into the care of the state.
The good news is that all this can be easily avoided by drafting a clear and precise Will. But since a Will is a legal document, it’s worth consulting your bank or financial advisor to make sure that your spouse, children, relatives and other loved ones are well taken care of in the event of your death, and that you enjoy peace of mind.