It is widely accepted, that for the most part, preparing a valid will ensures that your testamentary wishes will be carried out upon your passing.
While of course that is the case in most instances, it is important to be aware that it is possible that sometimes the estate will not be distributed as intended, despite there being a valid will in place.
If you are the one that is making the will, or has passed, this perhaps offers little comfort. But by being aware and seeking individually tailored advice for your situation, there are steps that you can take to better protect your testamentary wishes.
For beneficiaries, it is worth noting that it may be possible to achieve the outcome that you seek.
Do What You Can To Protect your Wishes
Your testamentary wishes and intentions are most often contained within a document known as your will. As mentioned above, despite best laid plans, a simple and generally prepared will may not be enough to strongly protect your wishes. There are always legal avenues for beneficiaries to contest a will, but even without a formal contest, intricate details contained (or not contained) within your will document can impact how things play out once you are no longer around.
Beneficiaries May be Able to Change What Happens
It may not be widely known that in fact the beneficiaries of an estate may be able to take action to change the way that the assets of an estate are distributed (after the passing of the will maker).
Of course, there are some conditions that need to be met in order for this to happen. But the important thing to note, is that it is possible. Which also means that it is possible for a will maker to take steps to prevent, or at least make it more difficult, for this to occur.
It is worth mentioning that the course of action that we are discussing here is different to beneficiaries or other parties making a claim on the estate.
Conditions: How & Why it is Possible to Alter what the Will Has Set Out
Key things to know include:
- Once the executor takes control of the estate and all debts are paid, the remainder is held in trust.
- Any kind of trust, whether estate or otherwise, is governed by the establishing documentation. In the case of an estate, this documentation is the will.
- The important detail in this situation is that if the will does not dictate that the trust must exist for a set amount of time, the option to end the trust early (dissolve the trust) becomes a possibility.
- Essentially, provided the below conditions are met, beneficiaries can resolve to end the trust early and subsequently determine what happens to the assets of the trust.
Conditions for Beneficiaries to End the Trust Early
In order for the beneficiaries to be able to dissolve the trust, relevant preconditions include that all beneficiaries must:
- be aged 18 years or older
- have full legal capacity
- all agree to the decision
The Process to Dissolve the Estate Trust
In the event that the beneficiaries consent to dissolve the trust, the process requires:
- beneficiaries agree to dissolve the trust
- beneficiaries release the trustee
- trust property is distributed
- trust documents record what has happened
Since the trust is being dissolved, this is what gives way to the beneficiaries being able to settle on an alternative agreement for how the payment of the trust property will be carried out. There must be a deed signed by all beneficiaries to confirm their agreement and understanding that the decision, and subsequent actions and payments, is final.
Example: How Detail in a Will Can Affect or Protect your Assets
Let’s look at how this may be applicable in a real life scenario.
Dad wants to make sure that the family home stays “in the family”, not just in the short term after his passing, but for the generations that follow. In standard will execution or estate distribution, ownership of the family home would pass to Mum.
Dad’s intention is in protecting the asset from the possibility that upon his passing, Mum may go on to find a new partner and then potentially share her ownership of the property, or sell the property and share the proceeds, with her new partner.
In order to (supposedly) ensure that this does not happen, Dad nominates to give Mum a life estate in the property (which means that it is hers until she passes) and at that time her interest in the property will pass to their children.
After his passing, Mum proposes to their children that she will give up her life estate, allowing for early sale of the property, if she can have a quarter of the sale price.
They all agree and the process of dissolving the estate trust begins. The children are able to access their share of the estate much sooner that previously expected and Mum gets a nice kitty of money to enjoy.
Not at all what Dad had in mind. But all the beneficiaries are happy with the outcome.
Obviously, this is just one example and it may not always happen that amicably and easily. A lot of the success of dissolving an estate trust relies on all beneficiaries being in complete agreement, which can be a challenge.
There’s not really much that Dad can do at that stage. However, had he have sought more specific advice when preparing his will, he may have been able to insert some extra conditions into his will and estate plan to better secure his intentions.
Things You Can Do To Better Protect Your Testamentary Wishes
Obtain Professional Legal Advice
Seeking professional legal advice in the preparation of your will and estate plan can make all the difference.
Working with experienced wills & estate lawyers, such as the team at Quinn Lawyers can go a long way to ensuring that the contents of your will is closely aligned with your intentions and wishes.
Beware DIY Dangers
While low-cost, using a do it yourself (DIY) will tool to outline your wishes is not likely to work in your favour when it comes to protecting your intentions and safeguarding your estate.
Carefully Choose your Executor
It is crucial to appoint an executor who you trust and who you feel confident will uphold your intentions once you have passed away.
Structure your Assets Thoughtfully
You do not have to reference all of your assets in your will in order for them to be covered under it. For example, if you hold a property as joint tenants with someone after you die your share passes to the surviving joint tenant without reference to your will. This can be a good option for safeguarding assets and protecting your estate if you wish for certain assets to not be known to persons wishing to contest.
On the other hand, as highlighted above, relying on the general standard processes may have other implications for the distribution and future handling of assets in your estate. So it might not always be the best solution.
Be Aware of and Consider the Possibility of Claims
Being aware of potential claims against your estate is an important aspect of estate planning and preparing your will. If you have a feeling that someone may make a claim on your estate if they are not provided for or are left out of the will, you may wish to consider providing a small amount of your estate to them, in order to ‘keep them happy’ so to speak.
Expert Wills & Estates Advice
Don’t leave your testamentary wishes to chance. For professional and individual advice in relation to wills and estates, contact our team of experienced wills and estates lawyers. Get in touch by submitting an online enquiry form or calling our office on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.