A Will is a legal document setting out to whom and how your assets pass on your death. You can also nominate an Executor in your Will. This is the person who will be responsible for carrying out your wishes as set out in your Will.
Formally, a Will must be:
- in writing
- signed by you (Testator), and
- witnessed by two adults in your presence and in the presence of each other.
When drafting your Will, there are a number of considerations to address.
Appointing an Executor
Your Executor will be responsible for ensuring that your wishes, as expressed in your Will, are carried out.
An Executor’s duties generally include:
- making funeral arrangements
- securing assets such as valuables and other property
- paying any outstanding debts or taxes
- selling or transferring any property that is to be distributed such as your home, and
- distributing assets in accordance with your Will.
As these are important responsibilities, you should nominate somebody with whom you trust and have a close relationship.
Learn more about the Executor’s responsibilities.
What assets should I include?
You will also need to consider what assets will be distributed by your Will. Generally, these will be:
- any assets that you personally own
- any assets that you own jointly with another person if that person dies before you. Your family home may be an example of property you own as a joint tenant.
- any assets that you may personally inherit in the future.
Some assets may not be distributed by your Will. For example, superannuation and life insurance will only be distributed by your Will if they are paid into your estate on your death. Superannuation will not be distributed by your Will if the trustee of your fund pays it directly to a beneficiary.
You can control whether your superannuation is paid into your estate and distributed by your Will or paid directly to a beneficiary by putting in place a binding death benefit nomination (the ‘Will’ for your superannuation). There can be significant tax and asset protection consequences as a result of where you elect to pay your superannuation when you die.
What is the best way to distribute my assets?
Once you have determined which assets to distribute to each intended beneficiary, you should consider the best way to distribute those assets. Testamentary trusts, for example, can provide a tax effective way to distribute your assets to your loved ones.
Testamentary trusts also provide other advantages. For example, if you leave assets to minors, young people, or to family members who may not use their inheritance responsibly, you can use a testamentary trust to control how the inheritance is spent.
Learn more about testamentary trusts.