You may believe that Wills are just for the elderly and that you do not need one but this could not be further from the truth.
Almost every person whether young or old has there own “estate”. Your estate can include real estate, shares, investments, money in the bank, jewellery, vehicles, personal items like furniture and even includes your digital assets like Facebook and email accounts. The value of your estate does not matter; the important thing to consider is what happens to your assets when you die.
If you die without a legal Will, the distribution of your assets or your “estate” is determined by the provisions of the Administration and Probate Act 1919. This means that the family and/or friends who you wanted to receive your assets may not if you have not provided for this in a legal Will.
The Administration and Probate Act 1919 specifies that if your net estate (that is the portion of your estate that is left once all debts are paid) is $100,000 or less, the estate goes to any surviving spouse or domestic partner. If your net estate is $100,000 of more, the first $100,000 will go to your surviving spouse or domestic partner and the balance of your estate over that $100,000 threshold will be split equally between your surviving spouse or domestic partner and any child or children.
In the absence of a Will, this can create difficulty, stress and upheaval for your family, for example in the scenario below.
You die intestate (without a legal Will). Your estate is worth around $400,000 which consists almost solely of the family home. You have a surviving spouse and dependant children. The family home, for whatever reason, is in your sole name (for instance, you bought it before you met your spouse and had children and never bothered to change the ownership to include your spouse).
Your estate will, in this instance, be distributed pursuant to the Administration and Probate Act 1919. This means that the first $100,000 will go to your surviving spouse as will half of the remaining $300,000. Of the total value of your estate, $150,000 will be paid to your children. In this particular scenario, this would result in your spouse having to take out a mortgage for the amount of $150,000 to pay the children’s share of your estate which she may not be able to manage financially, or in the alternative, your spouse would be forced to sell your family home. This could cause considerable upset, stress, disruption and upheaval for your family.
Another example where dying without a Will is problematic is when a husband and wife die together; for example in a car accident and there are no children. It will need to be determined who died first.
If the husband dies instantly, for instance, and the wife dies later in hospital, then pursuant to the Administration and Probate Act 1919 the husband’s estate will pass to his wife. As the wife has also died, her assets and those of her husband will pass to her next of kin. This means the family of the husband will not inherit any of his estate, despite this potentially being his intention.
The Administration and Probate Act 1919 has attempted to deal with this situation by allowing the husband’s family to receive a benefit if the spouses die within 28 days of each other. This does not allow, however, for the situation where the wife dies later in hospital but outside of that 28 day period.
Having a legal Will drawn up by a solicitor is in the most part a simple and straightforward exercise which takes little time but could have untold value to your family when you die.