A legally-binding Will or a DIY Will
Do you have a WILL at all?
If you don’t have a legally-binding Will is it because you say:
- I don’t want to face my mortality.
- My ‘affairs’ are straight forward I don’t need a Will.
- No-one in my family will dispute my wishes – they won’t fight and will sort it out themselves.
- I don’t want to spend the money.
- I don’t have the time to organise one.
- I am too young to need one.
- A trustee Company will do it for free.
- I have a DIY Will – I’ll be fine. NO. NO YOU WON”T!!!!
Here are a few facts I ask you to bear in mind when reconsidering not having a Will:
P.S. If these facts aren’t enough to convince you that you need a legally-binding Will to protect your family and assets make sure you read the horror stories below. They aren’t pretty but they drive the point home.
Here are some simple facts:
- DIY Wills are not legally-binding. They’re cheap to buy, however, can be very expensive in the long run. As my dad would say “pay peanuts and get monkeys” Did you know: Lawyers make more money sorting out the mess left behind with DIY Wills than they do from drawing up legally-binding Wills?
- If you don’t have a legally-binding Will the government decides who gets your money. They’ll divide your assets according to their legal formulas and not according to your wishes. In extreme cases they also decide who will be appointed as guardian of your minor children.
- If you don’t have a legally-binding Will and there are no close relatives the government may keep the entire estate.
- Supreme Court Probate Registries go over DIY Wills with a fine tooth comb. If there is a mistake in the wording, signing process or if the signature looks shaky they investigate it further – at your cost.
- Court cases regarding deceased estates are rising. Your family could spend $20,000 – $40,000 fighting someone’s claim against your estate. More often the courts now favour the claimant. (The person you didn’t want to leave money to)
- A legal-binding Will allows you control over who you include or exclude. Making it difficult for anyone to claim you were mentally incapacitated when writing your Will.
- Your legal-binding Will is one of the most important financial planning documents you have. If you have Super, a car, a job or any assets you need to make financial plans.
- It is not difficult to put a legal-binding Will in place. In fact, the TWC Legal team process is a user friendly method.
- Your Super is not automatically covered in a Will. It must be dealt with separately.
- “Free’ Wills are run by companies who are in business to make money. See the “The true cost of ‘Free Wills” story below for how much this is likely to cost your family. (insert link to Free Will horror story)
- It is recommend you don’t use a DIY Will if:
- You have young children or children with special needs
- You own a Business/Company/Trust or Self-managed super fund
- You’re separated but not yet divorced
- you have multiple marriages., living as defacto couple or you are getting in the near future
- You have blended families or children from a former relationship
- any of your beneficiaries live overseas
- you want to exclude any immediate family members
- you have any assets / pensions overseas or
- If you won’t be around to clarify the wishes that are being disputed by people you have purposely left out of your DIY Will (which will be 100% of you!)
As you can see all these points add the compelling case for having a legally-binding Will in place.
With The Wealth Centre it can be done simply and you will have a great peace of mind when it is done.
Simply email or call today to arrange a time where your needs can be discussed.
ianbarr@thewealthcentre.com.au
Then rest assured your family won’t become one of the horror stories below.
Sad but true horror stories
The true cost of ‘Free Wills”
‘Free wills are offered by Estate companies. The usual condition is that you appoint them as Executor of your Will.
This means they administer your deceased estate for a fee.
Sounds ideal doesn’t it – removing the stress from your family?
But wait until you see how they make their money – the fees!
Estate companies generally charge on a commission basis. Up to 6.6% on the total value of all assets in the estate – including your home.
To put that in perspective:
- An average estate of $500,000 immediately attracts fees minimum fees of $17,000+. This means if you leave your children the family home valued at $500,000 they will have to find $17,000+ in cash to pay the fee to the company who you appointed as executor to your ‘Free’ Will.
This often results in the children having to sell the family home to pay the debt.
- Additional charges such as Probate Court Fees will cost your family another $650 to $1,000.
- If your estate has assets earning an income (assets you leave in trusts – waiting for your kids to turn 18yrs) then you will pay a further commission of up to 8.25% per year.
Not really ‘Free’ Wills are they?
Interstate relatives
A middle age man slid into coma due to illness.
Although he had a Will he did not have a Power of Attorney or Power of Guardianship.
All his well-meaning relatives lived interstate and therefore had no legal authority to deal with his affairs.
This resulted in issues with instructions to the doctors and financial institutions.
In order for someone to be allowed the authority to act on behalf of the incapacitated man the hospital had to make Application to the Guardianship Board seeking some form of financial administration order as well as a Guardianship Order.
Guardians appointed to children
A couple died leaving behind two young children.
Each had a Will. Each parent had appointed Guardians for children.
Unfortunately, they had appointed different Guardians for the children.
This caused a mountain of legal issues and a great deal of emotional trauma for all involved.
Sadly, it gets worse… The parents had set up Trusts to look after the estate until the children were 18yrs old. However they did not appoint the Guardians as the people responsible for handling the money in the Trusts.
This once again caused a terrible situation for all concerned.
Your partner has a stroke
A too common scenario is you co-own a house with your partner.
Sadly they have a stroke and are no longer considered legally capable of making decisions for themselves.
Because of their incapacity you’re required to care for them full-time and need to sell the family home, down size and use the equity to support the two of you.
Because you don’t have the correct documents in place you are not authorized to sell the home on their behalf. And because you cannot prove they have given you permission to sell. You now have to apply to the Government for permission to sell the home.
The Government department will look into the case to determine if have your partner’s best interests at heart.
Half the cash from the sale will be put into a Trust and administered by the same Government department.
If you want to access the cash to pay bills and buy medical supplies you’ll have to provide receipts of purchases and proof of need.
You are not able to use the cash in the manner that you had both planned to do over the years – EG holidays, renovations, purchasing a boat etc.
All this simply because you didn’t have the correct Power of Attorney or Power of Guardianships in place.
These are just three stories of the 100’s that happen each day.
Please don’t make the mistake of exposing your family to the trauma associated with these types of issues.
Remember at The Wealth Centre we can help you secure your legally-binding Will with a few simple steps. This will protect your family and your assets against unjust claims in the future.
Simply email or call today to arrange a time where your needs can be discussed.
ianbarr@thewealthcentre.com.au
