Few people enjoy making a Will. Perhaps you are thinking 'I'm too young' or 'I have few assets' or 'The law of intestacy will take care of the distribution of my estate if I die without making a Will'. Generally, if you are over 30 or if you are married, you should have a Will. If you die without a Will, your estate may not be distributed in the way you would have wanted. Also, much extra work and expenditure will be incurred by the person administering your estate in searching out all possible relatives and verifying their existence. More importantly, however, if you die without leaving a Will, your assets will be frozen until an administrator is appointed by the Court. Consequently, any persons dependant on you, like spouse, children, parents, will have no income to live on until the administrator is appointed.


You have a number of choices. You can have your Will drawn up by a lawyer. You can have it drawn up by a Government agency such as the Public Trustee. Or you can buy a blank Will form from stationers and do it yourself. Another alternative is to go to a Trustee company and have the Will drawn up by their lawyer. Some banks have affiliated Trustee companies. Generally, a lawyer will charge you about $100 for a straightforward Will. The Public Trustee will charge you about $35 for a similar Will. With a fee as low as this, it is hardly worth while drafting your own Will. If you really want to, you can draft your own Will but make sure you read the instructions that come with the blank Will. Home-made Wills are sometimes unclear or not property executed.

Let us assume that you phone up and make an appointment with a professional. What should you do next? First, you should make a list of all your assets and liabilities. Your assets will include houses and land, bank accounts, shares, motor vehicles, furniture, jewellery, life insurance policies, superannuation benefits etc. Your liabilities will include mortgage loans, personal loans, Bills of Sale, credit cards, child maintenance liabilities etc. You must next decide who is to be the executor of your estate when you die. The executor is the person who collects all your assets when you die, sells them (if necessary) and then hands over the proceeds to the beneficiaries that you have named in the Will. You can appoint a friend. But first of all, you need his assent to acting and also agree what remuneration he will be entitled to. However, very often, the organisation or firm that prepares the Will is also appointed executor. In other words, if the Public Trustee draws up the Will, you appoint the Public Trustee as executor. If a lawyer draws up the Will, then you appoint the firm of lawyers as executors.

When making a Will, most people only think of the cost of drafting the Will. They never consider the cost of administering the estate. Yet the cost of preparing the Will is minute when considered against the cost of administering the estate. Take a typical example. A surviving widow dies. She leaves the following assets. The estate is to be divided equally among her three children.

House and contents 150,000
Bank accounts     5,000
Car   10,000
less mortgage on house   20,000
NET ASSETS             $ 145,000

Suppose it took the executor one year to complete the administration of the estate and hand the assets over to the beneficiaries. During this year, the executor rented out the house and received $15,000 in rent. How much would a professional executor such as a bank or the Public Trustee charge in fees? Typically, a bank would charge 5% on the value of the net assets and 7.5% of the gross rent received. The bank would thus charge $8,375 in fees. This is made up as follows: 5% of $145,000 plus 7.5% of $15,000. Typical charges for the Public Trustee would be 4% of the value of the assets plus 6% of the rent received. This would amount to $6,700. A firm of solicitors would charge their normal professional costs for work done. They do not charge on a commission basis. It would be difficult to estimate their costs. You should, therefore, devote serious thought as to who you should appoint as executor.

When you arrive for your appointment with the person who is to draft your Will, you will give him your list of assets and liabilities. It is also a good idea to give him a copy of your latest Tax Return. You will tell him the names and addresses of the persons who are to inherit your estate. He will also ask you for some further information which will not appear in the Will but he will keep for further reference. He will ask you the name of your spouse, if any, the name of your accountant/tax agent, where your important documents are kept, have you made a previous Will. He will then draft the Will and ask you to sign it.

The first clause in the Will revokes all previous Wills made by you. The second clause appoints an executor.

Next come any specific legacies you wish to leave to any persons. For example, you might not want to see your jewellery sold but would wish to leave it to your daughter. You might have a vintage car which you want to leave to somebody in particular. When making these legacies, you should be aware that if the car, jewellery has been sold before you die and you have not changed your Will, then the persons to whom you willed these items will not get them. If the assets do not exist when you die, they will get nothing in compensation. If you are willing real estate with a mortgage attached, make sure that you say whether you want the person to take it with the mortgage attached or whether you want the mortgage paid out first of all.

You must now dispose of the residue of your estate. This is the amount left over after paying 1) funeral expenses, 2) all costs of administering the estate, 3) all debts due at death and 4) the specific legacies mentioned above. You should be aware that if any person mentioned as a beneficiary in your Will has died before you, then his or her share will form part of the residue. It will not go to that person's next of kin, with one exception. This exception is a child of yours. If one of your children has died before you, then his share will pass to his children and not form part of the residue.

Next comes the date and then the Will is signed by you. It is essential that you have two persons present to witness your signature. Both must be present at the same time and see you sign the Will. Next comes the Attestation clause. This simply says that both witnesses were present at the same time and saw you sign the Will. It gives the names and addresses of the witnesses. It is a good idea for both the person making the Will and the two witnesses to all sign with the same pen. Neither of the witnesses should be a beneficiary under the Will. If any witness is a beneficiary, he or his spouse will simply lose their share of the inheritance. But it will not invalidate the Will. The completed Will must now be stored in a safe place. If you have used a professional such as a lawyer, bank or Public Trustee to draft the Will, then they will usually keep it free-of-charge for you. If you have drafted the Will yourself, then a bank deposit box is probably the best place to keep it. In any case, make sure that your executor knows where to find the Will.


Now that you have made your Will and stored it in a safe place, you should be aware that certain persons can challenge your Will after your death. Generally, if any persons were dependant on you before you died and it would have been reasonable that you should have provided for them in your Will and you have not done so, then those persons can apply to the Court and ask that they be given a share of your estate. The most obvious examples would be a spouse, children under the age of 18 or even dependant parents. A de facto spouse can apply. A person who nurses a person in his final illness without being paid would probably be entitled to a share of the estate. Even if a spouse was not a dependant but still lived with the deceased, he or she would probably be entitled to a share in the estate. Consequently, if someone is in the category of a dependant and you do not intend to leave that person anything in your Will, it would be best to state in the Will your reasons for so doing. Relatives have no right to challenge a Will just because they are relatives. In general, only dependants at date of death can challenge a Will.


If you die without making a Will, there are set rules about how your estate will be divided up. These rules differ from State to State but are broadly similar. Let us take New South Wales as an example.

Suppose that a person dies, has no Will but leaves a spouse and children. How will the estate be divided? The spouse receives all the household belongings plus the first $100,000 of the estate plus half of the remainder. The children (or their children) divide the remaining half among themselves. Consequently, where the total estate is less than $100,000 the surviving spouse takes everything. Suppose a person dies in NSW and leaves a spouse but no children. Who will inherit? The spouse takes everything. Suppose a person dies in NSW and leaves no wife or children. His two parents are still living, though. In this case, the whole estate is divided between the two parents. If there had been no parents living in this case, then the estate would have gone to any brother or sisters (or their children). If there had been no spouse, no children, no parents, no brothers or sisters, then the estate would have gone first to grandparents or next uncles and aunts. If none of the above were living, then the estate would have gone to the Crown i.e. the New South Wales Government.

As mentioned at the beginning of this article, a person should not rely on the intestacy rules. He or she should make a Will. Relying on the intestacy rules will only create additional trouble and expense.


You should review the contents of your Will about every five years. You may find that some beneficiaries have died in the meantime. Other beneficiaries may have been born or otherwise arrived on the scene. Some assets willed may no longer be owned by you. You should be aware that a Will is revoked by subsequent marriage in most States. Consequently, you should make a new Will if you have got married. If you have been divorced, any legacies left to your ex-wife might be invalidated, depending on what State you live in. You can alter your Will by making a supplementary Will called a codicil. However, it is far better to make a new Will instead.

Wives normally outlive husbands by about seven or eight years. The property, therefore, normally passes from the wife to the children. The husband should consider whether he wants the wife to be able to will all property to whom she pleases and especially if she remarries.

When you die, your executor obtains probate of your Will by going to the office of the Supreme Court and producing to them the following documents: 1) the Will, 2) death certificate, 3) list of assets and liabilities, 4) executor's oath and 5) copy of advertisement placed in local paper stating that probate is being applied for.


There are a number of steps that you can take to reduce the cost of administration. You will thereby leave more to your beneficiaries.

The first thing to do is to put assets in joint names. This is especially useful for married couples. When an asset is placed in joint names, the survivor becomes sole owner automatically. There is no need for probate to be obtained or letters of administration. Assets that can be put in joint names include land and buildings, bank accounts and shares. Suppose that a husband and wife have a bank account in joint names. The husband dies. The bank account is now the wife's. She can continue to operate the bank account. She does not have to wait for probate. She has immediate access to funds. There is no commission payable to an executor for joint assets. This can be a big saving where the family home is concerned. Stamp duty may be saved by having real property in joint names.

Another way of decreasing costs is to choose your executor with care. Shop around for the lowest fees. If possible, appoint a knowledgeable friend as executor. His charges could be much less than a professional executor.

You should also consider giving away some of your assets before you die. Again, in this case, there will be no executor commission on the assets given away. If assets are given by Will, the Will may be challenged.

When taking out a life insurance policy, you are allowed to nominate a beneficiary in case you die. This is optional. If you do not nominate a beneficiary, then the insurance policy proceeds will form part of your estate at date of death and you will pay executor's commission on it. On the other hand, if you nominate a beneficiary, the beneficiary will be paid the proceeds of the policy directly by the insurance company on your death. There will be virtually no waiting period and the money will not form part of your estate. Obviously, there are big advantages here. If you have Friendly Society bonds or insurance company bonds, you can nominate a beneficiary in the same manner. Often, you can do the same with superannuation benefits.

You should also be aware of the taxation situation regarding assets left by a deceased. There are now no Death Duties imposed by any State or the Commonwealth. However, capital gains tax may have to be paid if a beneficiary sells an asset which he has inherited. The rules are as follows. If the testator (i.e. the person who made the Will) bought the asset prior to 20th September 1985, then the beneficiary will be deemed to have acquired the asset at date of death at its then market value. When the beneficiary subsequently sells the asset, he will pay capital gains tax on any increase over the market value, adjusting for the CPI increase.

For example, John Smith leaves an investment property to his son Bill. John bought the property in 1981. He died in November 1989. The market value of the property in November 1989 was $100,000. Bill sold the property for $150,000 in November 1991. The CPI index increased form 200.7 in November 1989 to 217.7 in November 1991. Allowing for the increase in the CPI index, the real profit on sale was $41,530. Bill would pay tax on $41,530 at his top rate of tax. Assume that rate to be 39.5%. Tax payable would then be $16,404.

Now, assume the same facts except that John, the deceased, bought the property for $80,000 in January 1987. The CPI index in January 1987 was 164.7 and was 200.7 in November 1989 at John's death. Bill will be deemed to have acquired the property at a value of $97,486 at date of death. When he sells it in November 1991 for $150,000, he will be deemed to have made a profit of $44,256 allowing for inflation in the meantime. He will pay tax on the profit of $44,256.

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Copyright 1994.