An up-to-date Will is not a luxury, it is an absolute necessity. However, many young people may not realise how necessary a will actually is, even filing this away into the “too hard basket”. In this post we discuss the importance of a will from the perspective of one of our young lawyers.
As a person in my mid-twenties, until now, the thought of having a Will or a Power of Attorney never crossed my mind. Like many people of my age, I thought that I would live until at least 80 and Wills and Powers of Attorney were for the older generations. I didn’t appreciate what would happen to my car and bank account should I die. I also had no idea where my superannuation fund would end up.
Sadly, just recently, two of my high school friends died at the age of 23 in a motor vehicle accident. They were young, healthy and never expected to die at that age. This made me realise that life can be gone in an instant and I started to wonder what would happen to my assets if I died or was badly injured. Would my estate assets go to my nephews as I wished them to? Who would be the one dealing with my assets if I died or lost capacity? What would happen to my superannuation fund?
Drafting a Will and Power of Attorney
I am sure most people of my age have heard of a Will or Power of Attorney, but they may not really understand what they are supposed to do.
A Will sets out who will be your Executor, the person who will deal with your estate on your death and distribute your assets to your chosen beneficiaries. The Will also sets out who you want to be the beneficiaries of your estate and what you want them to receive on your death.
An Enduring Power of Attorney appoints someone to manage your assets and make your financial decisions if you are incapacitated, or otherwise unable to do this for yourself. I have found out that having a properly drafted Will ensures that your assets will be left to people of your choosing, not to people set out in a statutory formula in the Administration Act (WA). Also, having a valid Will ensures that your estate is managed by an Executor of your choice and not by an Administrator appointed by the Supreme Court of WA.
Similarly, having an Enduring Power of Attorney means that someone of your choice will manage your assets and financial affairs if you can’t do this for yourself at any time, rather than having the State Administrative Tribunal in WA appoint someone to do this work for you.
Your Superannuation Fund
Your superannuation fund does not automatically form part of your estate on your death, so your Will may not have any influence over who takes your super fund on your death. Unless you have a Binding Death Benefit Nomination in place setting out who is to receive your superannuation death benefits on your death, the trustee of your superannuation fund will have the discretion to distribute your superannuation death benefits to certain people within the guidelines of the superannuation laws. However, the super fund trustee can decide how much and to whom, within this group of people.
A Binding Death Benefit Nomination will allow you to nominate a person or persons of your choice, or your estate, to receive your superannuation death benefits on your death. These people must be beneficiaries permitted by the superannuation laws.
A person appointed by your Enduring Power of Attorney can also manage your superannuation fund for you if you lose capacity.
Because the laws dealing with Wills, Enduring Powers of Attorney and Superannuation can be quite complex – it is always a good idea to seek good legal advice from people who are experienced in Wills and Estate Planning.
The Wills and Estate Planning team at HHG Legal Group have years of experience in dealing with a range of situations, from the young singles, to the older generations and will be very happy to guide you through the process of preparing your Will, Enduring Power of Attorney and your Binding Death Benefit Nomination in a way that is simple to understand and cost effective.