The Will – Continued ….

Posted on 19 July 2012

What type of Will is Suitable for you?

There are 4 different options for you to choose from and these have been listed below. We have outlined some of the pro’s and con’s of each option below for your ease of reference.

1) The Will Kit

  • Cheap & easy - very rarely results in effective estate planning.
  • Prepared by a person who does not have any knowledge of the succession laws;
  • Comes with directions but not advice
  • Too many things can go wrong and for a saving of $100-$200 it’s not worth it.
  • In our opinion this type of will is not suitable for ANYONE.

It is important to invest in a properly drafted Will, while you may not see the value in paying for a will when you can get it done for free, your Estate will.

2) The Simple Will

  • Suitable for a number of people – NOT ALL.
  • Nominates the executor, guardians and beneficiaries.
  • Tax minimisation benefits are minimal.
  • Cost for preparing is low.
  • Not suitable for someone with an interest in a business, investment properties, large share portfolio, disabled beneficiary (including physical, mental, drug dependant etc); or a bankrupt beneficiary.
  • Is usually better than not having any will.

3) Complex or Testamentary Trust Will

  • Can be tax and asset protection effective.
  • The will itself sets up a trust to hold the estates assets – this means the beneficiaries have no direct title to the assets but can derive a benefit from them, often in a tax effective manner.
  • It can protect assets for many generations both from creditors of the beneficiaries and also limit amount available for the spendthrift beneficiary.
  • Income and assets can be applied for the benefit of disabled or bankrupt beneficiaries and away from them if they are drug addicts or gamblers. It can also protect assets from creditors where a beneficiary is bankrupt.
  • May remove the assets from the claws of any family relationship/property disputes.
  • Can create intergenerational wealth.

4) Will Creating a Life Estate

  • Possible for consideration for those in a second marriage or relationship with Children from a previous relationship.
  • A will may create a life estate for a spouse. This allows the spouse to continue living in a property for their life and on their death the assets pass to the children or beneficiary elected by the testator.
  • This ensures that the spouse (or other person) has a home and can continue to benefit from the estate without giving them the control to sell the property, dispose of the estate or will it to another person or new future spouse.
  • It can also protect assets from spendthrift beneficiaries while still adequately providing for their needs by providing them a home.

If you need assistance with your estate planning, contact Dooley & Associates Solicitors.