Planning for your future is a scary but crucial part of life, ensuring your assets and loved ones are protected after passing. In Victoria, Australia, gaining a full comprehensive understanding of the fundamentals of wills and estates is essential for effective estate planning.
At Ebra Partners, proactive planning is the cornerstone of safeguarding your legacy.
Whether you’re drafting your first will or managing a complex estate, understanding the fundamentals of ‘what is a will’ and ‘what is the estate in a will’ is critical to ensuring your wishes are honoured. This article will delve into the basics of wills and estates, highlighting their significance and the legal frameworks governing them in Victoria.
What Is a Will?
A will is a legal document outlining how a person’s assets and affairs will be managed and distributed after their death. It allows for individuals to specify beneficiaries, appoint executors, and provide instructions for the care of dependents. In Victoria, the creation and validity of wills are governed by the Wills Act 1997. This Victorian legislation sets out the requirements for making a valid will, including the necessity for the will to be in writing, signed by the testator (the person making the will), and witnessed by at least two individuals who are over the age of 18.
Key requirements for the creation of a legitimate will also include:
- The testator (will-maker) must be at least 18 years old, though minors can create a will if married or authorised by a court order.
- Testamentary capacity: The person must understand the nature of the document, the extent of their assets, and the claims of potential beneficiaries.
- The will must be in writing, signed by the testator, and witnessed by two independent adults.
What Is the Estate in a Will?
The term “estate” refers to the totality of a person’s assets and liabilities at the time of their death. This includes real estate, personal property, bank accounts, investments, and any other assets.
In the context of a will, the estate encompasses all assets to be distributed to beneficiaries per the testator’s instructions. It’s important to note that certain assets, such as jointly owned properties or superannuation funds with nominated beneficiaries, may not form part of the estate and are instead transferred directly to the co-owner or nominated individual.
Administering an estate involves tasks like applying for probate, paying debts, and distributing assets. This process is typically managed by an executor, whose role underscores the importance of appointing a trusted individual or professional will estate lawyer to ensure compliance with legal obligations.
The Importance of Having a Will
Creating a valid will is the only way to guarantee your assets are disposed of exactly as you wish after you die. Yet, many people may never create one.
Without a valid will, the distribution of your estate will be determined by the laws of intestacy in Victoria. This may result in outcomes that do not align with your personal wishes. For instance, certain family members may inherit assets contrary to your intentions, or the process may become more complex and time-consuming for your loved ones, causing them distress all whilst grieving your death.
Common Pitfalls to Avoid
- Outdated Wills: Life changes—marriage, divorce, new children—require updates. A new will or codicil (amendment) ensures your wishes remain current. For example, getting married will generally revoke any existing will, unless it was specifically made in contemplation of that marriage..
- Informal Wills: While the Wills Act 1997 allows courts to validate informal documents, DIY wills risk errors in execution or ambiguous language, leading to disputes.
- Overlooking Family Provision Claims: Under Part IV of the Administration and Probate Act 1958, eligible individuals (e.g., spouses, children) can contest a will if they feel inadequately provided for. Proactive planning minimises such risks.
Updating and Changing a Will
Life circumstances change, and reviewing and updating your will is important. Significant events such as marriage, divorce, the birth of children, or acquiring substantial assets may necessitate revisions to your will. In Victoria, any alterations to a will must comply with the formal requirements set out in the Wills Act 1997 to be legally valid. This often involves creating a new will or adding a codicil, a supplementary document that modifies the original will.
The Role of the Executor
The executor plays a pivotal role in the administration of the estate. Their duties include applying for a grant of probate, managing and distributing assets, paying debts and taxes, and ensuring that the deceased’s wishes, as outlined in the will, are fulfilled. Given the complexity and responsibility associated with this role, it’s advisable to select a trustworthy and capable executor.
Recent Developments in Victorian Probate Fees
It’s noteworthy that the Victorian government has announced significant probate fee increases, with new rates up to 650% higher from 18 November 2024. Probate fees will shift from a fixed rate to a tiered system, with estates valued between $250,000 and $500,000 facing a rise from $68.60 to $514.40. Fees for more valuable estates will also see substantial hikes, peaking at $16,803.60 for estates over $7 million. These changes underscore the importance of effective estate planning to manage potential costs associated with estate administration.
How Ebra Partners Can Help
Navigating wills and estates requires precision and foresight—qualities defining our approach at Ebra Partners. We stand out thanks to our tailored solutions, holistic approach, focus on future-proofing, and commitment to diversity and inclusivity.
Whether you’re a business owner, expatriate, or part of a blended family, our estate lawyers create bespoke plans that address Victorian laws and global complexities. For instance, expats might pair estate planning with an immigration lawyer in Melbourne to align residency status with legacy goals. Beyond drafting wills, we assist with testamentary trusts, tax-efficient distributions, and contested estates, leveraging the Trustee Act 1958 and Corporations Act 2001 for seamless transitions.
A well-structured will is the gift of security for your loved ones. At Ebra Partners, we blend local expertise with innovative strategies to turn complex challenges into streamlined solutions.
Ready to start? Contact our will estate lawyers today—because your legacy deserves nothing less than excellence.