In Hollywood movies, Wills are often portrayed as mysterious “treasure maps” that send the protagonist on the adventure of a lifetime. In The Ultimate Gift, for example, a deceased billionaire sets his adult grandson a series of unusual tasks before revealing his inheritance, with the grandson having no idea what the “ultimate gift” will be.

Entertaining? Absolutely.
Realistic? Not so much.

In reality, Wills are far less dramatic — but far more important.

So, What Does a Will Really Do?

At its core, a Will is a legal document that outlines what happens to the things you own after you pass away. This includes items such as:

• your bank accounts;
• your home or other property;
• your car;
• your shares and investments; and
• your personal belongings.

You can also include wishes about matters such as your funeral arrangements or who you would like to look after your children or pets. However, these instructions are not always legally binding and are usually treated as wishes rather than strict directions.

The Essential Elements of a Will

Although every Will is different, they all contain a few key components.

1. Appointment of Executor(s)

Your Will must appoint an executor to administer your estate. Your executor is responsible for applying for Probate, carrying out your wishes, collecting your assets, paying debts, and distributing your assets to the beneficiaries.

2. Nomination of Beneficiaries

Your Will must clearly state who will receive your assets, whether individuals or organisations.

3. Distribution of Assets

Your Will must outline how you want your assets to be divided and who should receive what.

At this point, you might be thinking: this sounds complicated — how am I supposed to distribute everything that I own?

Leaving Specific Gifts

One option is to make specific gifts (also known as specific bequests or legacies).

These are particular items or sums of money you leave to certain people — for example, your watch to your nephew, or a cash gift to a close friend. Specific gifts are useful for making sure sentimental or valuable items end up in the right hands.

What About Everything Else?

Of course, most of us do not know exactly how many assets we will have when we die, let alone how much loose change will be sitting in a drawer.

That is where the residual estate comes in.

The residual (or residuary) estate is everything left over after:

• debts are paid;
• funeral and administration costs are covered; and
• specific gifts have been distributed.

In many cases, this is the largest part of an estate and where most of the value sits.

By nominating one or more beneficiaries to receive your residual estate, you can ensure that all remaining assets will be distributed.

Are Wills Completely Safe From Challenges?

Unfortunately, the answer is no.

In Australia, eligible family members and dependants can, under certain circumstances, make a family provision claim (also known as a testator family maintenance claim) if they believe they have not been adequately provided for in a Will. This means even a carefully drafted Will can sometimes be challenged.

Eligibility varies slightly by state. In Victoria, the definition of an eligible person can be found under section 90 of the Administration and Probate Act 1958 (Vic), which includes, but is not limited to, the following people:

• spouses or domestic partners;
• children, adopted children, and stepchildren;
• former spouses or domestic partners in certain circumstances;
• registered caring partners;
• grandchildren; and
• members of the household who were treated as part of the family.

This makes obtaining proper legal advice for your Will particularly important.

The Bottom Line

Your Will may not send anyone on a cinematic treasure hunt, but it does something far more important: it gives you control.

It helps ensure your assets go to the right people, reduces confusion, and assists your loved ones in avoiding unnecessary stress during an already difficult time.

Contact the Wills and Estates team at Mahons for a confidential discussion about preparing or updating your Will and ensuring your estate planning reflects your wishes.

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